Report: Restaurant Sales Increase with Tipped Wages
by Jessica Schieder, 3/20/2014
Restaurant sales per capita (per population) increase as the tipped minimum wage increases, according to a new report by the Restaurant Opportunities Centers United.
The new research contradicts claims by the National Restaurant Association and other organizations, which have fought against increasing the minimum wage for tipped workers for years. Opponents have warned that increasing the minimum wage for tipped workers – as is currently being proposed by leading Democrats and the White House – would negatively impact the restaurant industry.
The study examined employment growth, restaurant sales, and the growth in restaurant workers as a percentage of total employed workers across states.
“Across the country, restaurant sales and restaurant employment per capita increase as the tipped minimum wage increases because workers stay at their jobs longer, increase productivity, focus on customer service, and spend their own income to support the industry,” according to the report.
The report also found, “Eliminating subminimum wage does not decrease employment. In fact, the restaurant industry projects employment growth over the next decade of 10.5% in the seven states without a tipped subminimum wage, compared to 9.1% in states with a subminimum wage.”
The current Harkin-Miller minimum wage proposal would raise the minimum wage to $10.10 per hour, and it would peg the minimum wage for tipped workers to 70 percent of the regular minimum wage. It is expected to increase the wages of 30 million employees and create as many as 140,000 net new jobs, according to the Economic Policy Institute.