Q: "Do they [the restaurant industry] have a point when they say that an increase in the minimum wage will mean a cut in service and higher costs?"
A: "Well, these are their two primary arguments: one, that it will kill jobs, two, that it will make the cost of food go up. So on that first one, killing jobs. There are actually seven states in the United States that have the same wage for tipped and non-tipped workers. They range from somewhere around $8.00 and $9.50 an hour. You can go to California, Oregon, Washington, Alaska, Montana, Nevada, Minnesota. All seven states have faster industry growth rates than the restaurant industry nationally. And in fact, we recently did a regression, looked at the states with the higher minimum wages for tipped workers, we found that they have higher sales per capita in the restaurant industry.
"So we would argue that evidence shows that you could actually do better as an industry, faster industry growth, more jobs, if you treat your workers better. On that second argument that the cost of food will go up. We used USDA methodology. And we applied the current bill that's moving through Congress to every worker along the food chain, from farm workers, to meat and poultry processing workers, to restaurant workers. And we assume that every employer along the food chain would pass on 100 percent of the cost of the wage increase to their purchaser. The title of the report is “A Dime a Day", because it would cost the average American household at most $0.10 more for all food bought outside the home. That's groceries and restaurants alike. So we're talking pennies more on your hamburger when you eat out, for 30 million workers to come out of poverty.
Q: "But what do you say to the small-business owner, who says “Gee I run a very small place, we-- our waiters depend upon the tips at the counter. We just can't afford it. We'd go out of business if you require us to raise their wages."
A: "I would say a couple of things. First of all, you as a small business, you are actually being cheated by these very large corporations that are running the show, setting the standards, raking in millions of profits and screwing you by getting away with very-- you know-- very, very large, high-volume business and setting standards that require you to have to pay for very high rates of turnover. Our industry has the highest rates of employee turnover of any industry in the United States. I would say-- I can point you to plenty of small businesses around the country that actually pay their workers a livable wage and have managed to cut their turnover in half, in some cases, completely out, because they treat their workers well.
"I would also say that nobody's expecting you to change your wages overnight. We're talking about policies that would phase in a minimum wage increase. A minimum wage increase for both your servers and the back of the house. But the last and most important thing I would say is this: no customer in America believes when they leave a tip that they are leaving a wage for a worker. Nobody believes that they're paying a wage. People think they're paying a tip on top of a wage. We don't think about this in any other context except restaurants. We believe somehow that because they're getting tips, they shouldn't get a wage. It's not true in any other context. And that is because of the power of this industry."