Restaurant association says the industry will suffer from a minimum wage increase

The National Restaurant Association is urging Congress against implementing the Raise the Wage Act, which would raise the federal minimum wage to $15 an hour.

The association wrote a letter to congressional leadership Tuesday requesting Congress remove the act from the $1.9 trillion stimulus plan. They warned that restaurants would suffer from a wage boost amid the coronavirus pandemic and cited results from a February survey polling 2,000 restaurant operators, who said that the increase would lead to job losses, higher menu prices and restaurant closures.

The survey found that 82% of restaurant operations say the initial wage increase would negatively impact the ability of the restaurant to recover from the coronavirus pandemic.

“The survey results make it crystal clear that the restaurant industry and our workforce will suffer from a fast-tracked wage increase and elimination of the tip credit,” Sean Kennedy, Executive Vice President of Public Affairs for the National Restaurant Association, wrote in the letter. “Restaurant jobs will be critical to every local community recovering from the pandemic, but the Raise the Wage Act will negate the stimulative impact of a worthy plan.”

Kennedy continued, “Passage of this bill this year would lead to job losses and higher use of labor-reducing equipment and technology. Nearly all restaurant operators say they will increase menu prices. But what is clear is that raising prices for consumers will not be enough for restaurants to absorb higher labor costs.”

The Raise the Wage Act, which Sen. Bernie Sanders (I-Vt.) introduced last month, would also eliminate the tipped minimum wage for restaurant service workers.

“Eliminating the tip credit will hurt millions of servers who rely on the current system where they earn between $19-$25 an hour with tips,” Kennedy wrote.

Kennedy understands the minimum wage issue in America, but thinks the Raise the Wage Act is “the wrong bill at the wrong time.”

“We share your view that a national discussion of wage issues for working Americans is needed,” Kennedy said, “but the Raise the Wage Act is the wrong bill at the wrong time for our nation’s restaurants.”

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