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Latest Data Confirms Restaurant Industry Growth During Minimum Wage Increase Without a Tip Penalty

Is raising the minimum wage bad for the restaurant industry?

If you read last week’s City Pages, you might think so. The headline “Whiskey Junction calls it quits, blames minimum wage” points directly at Minneapolis’ $15 minimum wage ordinance as the “murderer” of the bar and music venue.

But even a cursory investigation of this so-called murder shows no evidence that the minimum wage ordinance was even at the scene of the crime, let alone holding the weapon. All the evidence actually shows that raising the minimum wage does not negatively impact the local restaurant industry. In fact, evidence confirms the opposite: raising the minimum wage without tip penalties or carve-outs stimulates job creation in the local restaurant industry.

Restaurant job openings in the Twin Cities Metro region have increased from 6,900 to 12,000 in the past year, according to the JOBS NOW Coalition and the Minnesota Job Vacancy Survey. That means restaurant industry jobs openings increased 75% while the state raised its minimum wage to $9.50 without a tip penalty.

This is consistent with data from across the country confirming that higher pay for tipped workers goes hand in hand with strong growth in the restaurant industry. As the National Employment Law Project reports:

Each time a raise in the tipped minimum wage is proposed, business groups, in particular the restaurant industry, argue that it would cause economic harm, but no serious observer believes that restaurant industry job growth is affected in any significant way by how low or high a state keeps its tipped minimum wage.

For all their naysaying, the National Restaurant Industry itself can’t deny the numbers, projecting that states with and without tip penalties will experience nearly identical growth in the industry over the next ten years.

The Restaurant Association’s lobbying efforts to block minimum wage increases across the country-- whether for minimum wage preemption in Minnesota or gutting the minimum wage for tipped workers in Maine-- is motivated by profits, not facts.

If raising the minimum wage with no tip penalty or carve-outs really were as toxic as the restaurant lobbyists claim, how could Minneapolis have developed such a robust industry to earn the Wall Street Journal’s pick as one of the world’s top 10 travel destinations for foodies?

All the data shows that the Twin Cities restaurant industry is thriving. But profits are a powerful motivator, and the Minnesota Restaurant Association has shown they’ll pull out all the stops to block minimum wage increases. In Minneapolis, their “Pathway to 15” front group pushed for a tip penalty while the Restaurant Association Lobbyists at the statehouse worked to make it illegal for Minneapolis to raise the wage all together.

But Minneapolis workers and community supporters successfully beat back the Restaurant Association’s corporate agenda and won $15 for all workers with no tip penalty. How? By building a movement! The restaurant lobbyists can pour millions of dollars into lawsuits, but by relentlessly organizing strikes, protests, rallies, and public meetings, we forced our elected officials to pass a policy that represents the needs of the many, not the corporate elite.

It’s clear that the facts alone are not enough to win victories like $15. We need to mobilize again and again to rallies, protests, and meetings with our representatives. We need to talk to our neighbors and families about the issue; call, email, and visit our representatives. If we build a movement around the facts, we can win $15 for all workers-- and more.

 

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