Restaurant Owners Push Back Against Raising Tip Wage

Date: January 27, 2014

President, Some Democrats Look to Raise Minimum Tip Wage

President Obama and a group of senators are proposing to raise the overall minimum wage to $10.10 an hour, while also backing an increase of the tip wage. In particular, Iowa Sen. Tom Harkin (D) and Illinois Sen. Dick Durbin (D) are pushing for a tip minimum wage increase to about $7 an hour. Restaurant owners are strongly opposed – they argue that it would mean higher prices for customers and fewer waiters serving them. In addition, some restaurant owners argue that the increase could make the difference between staying open and closing. The federal government sets a lower minimum wage for restaurant workers who make a significant portion of their income in tips. Currently, the tipped minimum wage is $2.13 per hour.

What’s Next:

The President and Senate Democrats strongly support the measure, but would need several Senate Republicans to cross over and vote with them for the measure to pass. The GOP-controlled House has not signaled a willingness to bring up the measure.

More Reading:

The New York Times runs a good overview piece on the debate, while WICS-TV interviews the owner of Ray’s Route 66 Family Diner in Illinois, who says she fears she would have to close her business if Sen. Durbin’s bill is enacted.

This news article is intended to keep small business owners apprised of current events that may affect them. It does not necessarily reflect NFIB’s policy position on such issues.

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