Bills could increase wages for local tipped workers

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By Andrew Damstedt
The Sentinel (Maryland), Mar 16 2011
A job creator or a job killer is the debate circling two bills that would raise the minimum wage.

A bill backed by Rep. Donna Edwards, D-Fort Washington, in Congress would raise the minimum wage for tipped employees, while a bill facing debate in Annapolis would raise the minimum wage for tipped employees and the regular minimum wage.

The bill before the General Assembly would increase Maryland’s minimum wage from $7.25 per hour to $9.75 per hour by 2013. Tipped employees would see their minimum wage rise to $6.19 in July from $3.63.

“The average tipped employee in a casual dining restaurant earns $12 to $15 dollars per hour and an average tipped employee in an upscale restaurant can earn upward of $18 dollars an hour,” said Melvin Thompson, Restaurant Association of Maryland senior vice president of government affairs and public policy, March 8 during a Maryland legislative hearing.

He said even in situations when a tipped employee does not make enough in tips to reach the minimum wage, the employer is required by law to make up the difference.

“There is never any situation where a tipped employee is earning less than the minimum wage,” Thompson said.

During that same hearing, Walt Clocker of Angel’s Food Market said he would have to cut hours as he has done in the past when the minimum wage was increased.

“This bill is a job killer,” he said, calling minimum wage jobs the ones that “teach people how to work.”

Mike Franklin of Franklin’s Restaurant in Hyattsville said in a telephone interview that he was opposed to the increase. Franklin said tipped employees at his establishment earn between $15 and $20 an hour after adding in tips, and an increase in the minimum wage would hurt his business profits.

However, some employers see merit in the proposed minimum wage hike.

“When we pay a higher starting wage, we tend not to lose good people we’ve hired and trained because they went out and found another job,” said John Shepley, owner of Emory Knolls Farms during the legislative hearing.

The bill in Congress seeks to raise the federal minimum wage for tipped employees from $2.13 to $5.50 in two years in increments.

Jose Oliva, Restaurant Opportunities Center United policy coordinator in Chicago, said the Congressional bill is not a job killer and pointed to California, where there is no tipped minimum wage.

“The argument that this will kill businesses or it will slow down the economy or small businesses can’t afford to pay more than what they are paying, it all falls apart when you look at California,” Oliva told The Sentinel. “It’s literally the fastest growing restaurant industry in the country, and I’m not talking about just L.A. or San Francisco. I’m talking about all over California. There’s no market in California where the restaurant industry is not growing.”

He said it would be ideal if no state had a separation between tipped minimum wage and the regular minimum wage. However, he said that is not possible in today’s political climate.

Edwards acknowledged during an interview with The Sentinel that it was an uphill battle to get her legislation approved a couple weeks after she introduced the bill Feb. 10. The bill has been referred to the House Committee on Education and the Workforce.

Edwards said she proposed the bill to raise the tipped minimum wage because more than 17 percent of wait staff live below the poverty level.
“People who work at the bottom of the rung are suffering the most in this economy,” she said.

Although tipped employees make up their wages with tips, Edwards said the minimum wage for tipped employees has not been raised since 1991. In contrast, the federal minimum wage was raised most recently in 2007 to $7.25.

“We need to make people aware that there is a gap,” Edwards said.

Some lawmakers, she said, had thought when they raised the federal minimum wage to $7.25 per hour that they also raised the minimum wage for tipped employees. However, that had not happened, and a bill to raise the tipped minimum wage in the last Congress failed.

Edwards’ bill would increase the tipped minimum wage in increments, starting with a raise to $3.75 per hour three months after enactment. The raise would go to $5 per hour one year later and $5.50 per hour two years later.

Matt Burchell, Progressive Maryland community organizer, described to the Maryland Economic Matters Committee the various minimum wage jobs he had to support himself including a stint at the Cracker Barrel in Bel Air.

“I had pay periods where my pay check was less than $50,” Burchell said. “This January I worked over 100 hours and made less than $700 for the entire month, which is less than $7 per hour. To survive, I drained my savings, put off credit card payments as well as putting more debt on my credit cards, and I had to borrow money once again from my parents and my friends. I’m lucky I’m now making more than minimum wage and have excellent benefits at my job.”

Delegate Aisha Braveboy, D-Prince George’s, said increasing the minimum wage is an issue of fairness and equity to working men and women.

“And as we look at enhancing our revenues and tax proposals, we have to make sure we are including those who are earning at the bottom of the system,” Braveboy said.