Restaurant employees raise again

Waitress Karissa Medina delivers breakfast to Dan Folkner on the first day of the reopening of Granny’s Pantry restaurant to the public in Atwater, Calif. on May 27, 2020. (Genaro Molina/Los Angeles Times/TNS)

By Shane Madden

Michigan service staff rejoiced, collectively celebrating what would be the only raise they had ever received as a food service employee.

After the COVID-19 pandemic wreaked havoc on the industry, putting millions out of work, millions more wondered where they could possibly get a $5 margarita. Inflation and gasoline prices crushed sales as customers tightened their belts to ride out the storm. There was finally a glimmer of hope, if only for a moment.

As of July 29, 2022, Michigan Court of Claims Judge Douglas Shapiro granted a delay on the court’s decision to strike down the state’s tip credit law, which allows employers to pay as little only $2.13 an hour to tip employees and credit the rest to gratuity. . The result is that a majority of service employees receive no paychecks, as any accrued hourly income is charged against taxes.

Shapiro wrote in her decision that the stay would give restaurants “more time to adapt” to the new changes, which will now be pushed back to February 19, 2023 (at least).

This seems quite reasonable, at first glance. However, it does not tell the whole story.

This decision has already been in the making for four years. See, The Michiganders garnered enough signatures in 2018 to put a $12 universal minimum wage and paid sick leave on the ballot in November. Quickly realizing that they could not stop these initiatives from passing due to their immense public support, the state legislature used a settlement to pass the initiatives outright. It was a great victory for the labor movement and the middle class!

Except those aren’t the laws they passed.

On July 19, 2022, a state judge ruled that the Michigan State Legislature violated the Michigan Constitution in 2018, when it passed the proposed initiatives and immediately started modifying them. This dropped the salary from $12 to $10.10, removed annual inflation adjustments as well as language specific to tipped employees.

By the judge“the process effectively thwarted the intent of the people and denied them the opportunity to vote on whether they preferred the voter-initiated proposal or whether the legislatures suggested changes.”

So, do they still need more time? Let’s talk about the time they spent and what they did with it.

The tip credit was codified in 1966 under the Free Labor Standard Agreement (FSLA), and in 1991 was reset to $2.13 per hour, tied to 50% of the then minimum wage of $4.25, and although this wage has now increased to $7.25 nationally, the tip credit limit remains at $2.13.

That’s 56 years without having to pay service employees. These profits make the industry explode and grow.

Learn about the long history of American tipping here.

In 1990, manufacturing jobs (objectively better paying jobs with benefits and union protections) outnumbered restaurant jobs 3-1. These numbers stabilized in 2020, as 25% of manufacturing jobs disappeared due to automation, and the restaurant sector grew by 50%, becoming the largest and fastest growing industry in the United States. . operating.

In addition to not being paid by the hour, servers and bartenders are subject to the confiscation of 3-5% of their sales as “tips” for other employees. When you take money out of the hands of an employee to subsidize another, it should be taken as an admission by an establishment that it is not paying enough for the work required.

There are those who consider this a complete non-issue. They say these are jobs for high schoolers, and “if you don’t like the pay then quit”. But according to, the average age of a restaurant worker in the United States is 35 with an average “salary” – or tip accumulation – of $27,000 (note that this number is entirely at the mercy of the generosity client). If this is the largest and fastest growing industry in the United States, occupied by a large percentage of adults, that means these are the jobs that are available to Americans.

We either have to decide that these jobs are worthy of a living wage, or accept that our favorite restaurants will always be short-staffed. This may mean accepting small price increases and/or acknowledging that tipping is part of the experience. It could also mean realizing that maybe the United States doesn’t need a million restaurants and that we should let the bad ones close.

Either way, if paying workers a fair wage means a restaurant has to raise prices or die, so be it. That’s the whole point of the free market. It is high time for an establishment to take responsibility for paying its employees and not pass the responsibility on to the customer, or worse, leave its employees empty-handed.


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