A new law was on the table, and the hospitality industry marched to Augusta.
Waiters and bartenders pleaded with lawmakers not to upset a system that was working for them. Owners of establishments warned that the changes could drive many of them out of business. Industry representatives argued that the Legislature should not interfere with a consumer’s free choice.
But in the end, the Legislature stood fast. The year was 1999; the issue was whether to ban smoking in restaurants.
Clearly, none of the negative predictions came true. Smokers learned to smoke outside. Nonsmokers were happy to find that they could spend an evening out with friends and not come home smelling like an ashtray. Everyone adapted to the new rules and restaurant and bar business has exploded over the last 18 years.
Now we are hearing some of the same arguments over a different issue: the seven-year phase-out of the subminimum wage for tipped workers, established by referendum last year.
Like the smoking issue a generation ago, this change has fueled anxiety in the hospitality industry, which, until Jan. 1, had been able to pay workers who received tips just $3.75 an hour, relying on the generosity of customers to pay the rest. The new law increases the minimum for tipped workers to $5 an hour. Although it’s been in place only for three months, we are already hearing predictions of dire economic consequences.
Bills before the Legislature, including L.D. 673, would restore the old system, but it’s far too early for lawmakers to overrule the voters, especially since they have little information about the impact of the increase.
There is a better option. Sen. Troy Jackson of Allagash, the Democratic floor leader, has proposed a one-year study of the tipped wage and the impact of gradually increasing the hourly rate over time (L.D. 1117). The study would be designed and overseen by a range of people affected by the new wage. They would report back to the Legislature with real data to inform any changes that legislators may consider making.
Lawmakers owe this type of careful consideration to the voters, who approved the minimum-wage referendum in November by a large margin. It was by far the most popular item on the ballot, getting more votes in Maine than any of the presidential candidates. This decision should not be pushed aside without a good reason.
With Question 4, voters changed the minimum wage in three ways: The regular minimum went from $7.50 an hour to $9 on Jan. 1, and is slated to go up $1 per hour a year until it reaches $12 in 2020. The tipped minimum wage went from $3.75 to $5, and it too is scheduled to increase by $1 per hour, per year until it’s the same as the regular minimum, no sooner than 2024. After 2020, the minimum wage increases with inflation as measured by the Consumer Price Index.
Now some lawmakers and industry lobbyists, including those who have opposed all previous attempts to raise the minimum wage, claim that tipped workers should be carved out of the increase. They say paying a higher base wage would drive up prices, scare away customers and eliminate jobs. They are supported by a group of tipped employees who say that they are making a good living under the old system and they don’t want to risk changing it.
But the old system was not a good deal for everyone. Most servers don’t work in a high-end eatery, where their tips are calculated as a percentage of $30 entrées. An employee only needed to make $30 a month in tips — just under $7 a week — to qualify for the $3.75-per-hour base.
If their total wages for the hours they worked, including tips, didn’t add up to the full minimum wage, their employer was required to make good. But what if the employer refused? Making a sub-minimum wage worker pursue a complaint at the state Department of Labor is asking a lot, especially if the employee is trying to keep his job. We should not read too much into the fact that there are few such complaints on record.
QUESTION AT HAND
But designing the fairest wage structure for the restaurant industry is not the question that stands before the Legislature right now.
A citizen-initiated law is in effect: The only question is whether the Legislature is going to respect the will of the voters, or if it will ignore it and take money away from some of the state’s lowest-paid workers.
Just as with the smoking ban, lawmakers are hearing horror stories about what might happen, but not much about what the law’s real effects on real people will be. The only way to get that information would be to monitor the law that the voters have already put in place and propose evidence-based changes, if necessary. If there are negative consequences for restaurant employees, of course the law should be changed. But it seems as though some people are determined to change it quickly, before anyone can find out whether the new law is an improvement.
Jackson’s bill is the right compromise for this contentious issue. Lawmakers on both sides should take this opportunity to respect the voters while doing what’s best for tipped workers.