Restaurants Sound Warning About Proposed Minimum Wage Bill

Restaurants Sound Warning About Proposed Minimum Wage Bill


>>RAISING THE MINIMUM WAGE IS
A RALLYING CRY FOR DEMOCRATS ACROSS THE COUNTRY. A BOOST IN BASE PAY WAS A
CAMPAIGN PROMISE OF GOVERNOR LUJAN GRISHAM AS WELL. THERE ARE A HANDFUL OF
PROPOSALS TO RAISE THAT MINIMUM WAGE FROM 7.50 TO 10,
12 OR EVEN 15 AN HOUR OVER THE COURSE OF THE NEXT FEW YEARS. A 12 AN HOUR PROPOSAL JUST
PASSED THE HOUSE OF REPRESENTATIVES. IT NOT ONLY RAISES THE MINIMUM
WAGE BUT DOES AWAY WITH A PART OF STATE LAW THAT LETS
RESTAURANT OWNERS COUNT TIPS AS PART OF THE WAGE FOR
SERVERS. NEW MEXICO IN FOCUS PRODUCER
MATT GRUBS WENT OUT TO SANTA FE THIS WEEK TO LEARN WHY THE
RESTAURANT INDUSTRY SAYS IT COULD DRAMATICALLY CHANGE THE
EXPERIENCE FOR MOST OF US WHEN WE GO OUT TO EAT.>>EXPLAIN TO ME THE TIP
CREDIT. WHAT IS THAT?>>THAT BASICALLY MEANS THE
MINIMUM WAGE IS CALCULATED USING BOTH THE HOURLY WAGE THE
RESTAURANT PAYS AND THE TIPS. SO, BASICALLY, THE RESTAURANT
OWNER GETS CREDIT FOR THE TIPS THAT THE WORKER EARNS TOWARDS
THE MINIMUM WAGE.>>OKAY. AND THAT IS WHY SERVERS,
PEOPLE WHO ARE TIP DEPENDENT. MAKE 2.13 AN HOUR, 3 DOLLARS
AN HOUR, THEY CAN MAKE DOWN TO THAT LEVEL.>>CORRECT. SO, THEY ARE PAID THAT MUCH BY
THE OWNER, BUT THEY OF COURSE MAKE MUCH MORE. AND IF FOR SOME REASON THEY
DON’T EARN THE MINIMUM WAGE IN TIPS PLUS THE HOURLY, THEN THE
OWNER IS RESPONSIBLE TO COVER THE DIFFERENCE AND ALWAYS
ENSURE THEY ALWAYS MAKE MINIMUM WAGE.>>DO YOU EVER HAVE TO STEP IN
AND DO THAT AND MAKE SOMEONE WHOLE?>>IN THE 10 YEARS I HAVE BEEN
DOING THIS WE HAVE NEVER HAD TO DO THAT.>>THE BILL IN FRONT OF THE
LEGISLATURE WOULD GET RID OF THE TIP CREDIT. WHAT DOES THAT LOOK LIKE FOR
RESTAURANT OWNERS.>>IT REQUIRES US TO PAY ALL
TIPPED EMPLOYEES MINIMUM WAGE OUT OF THE SALES OF THE
RESTAURANT. SO, WHAT THAT WOULD MEAN
THEORETICALLY, IT WOULD INCREASE OUR COSTS A LOT, SO
THAT WE WOULD — IF WE WERE TO STAY WITH THE TIPPING MODEL,
WE WOULD NEED TO INCREASE OUR COSTS BY, IN MY CASE, ABOUT
25% OF MY LABOR COST.>>AND THEN ON THE MENU, WHAT
WOULD THAT LOOK LIKE?>>WELL, THEORETICALLY IT
WOULD BE LIKE A 10 TO 15% PRICE INCREASE ACROSS THE
BOARD.>>I CAN ENVISION FOLKS
SAYING, THAT IS NOT TOO MUCH TO ENSURE THAT THESE PEOPLE
ARE MAKING A GREAT WAGE. WHAT IS THE REALITY OF THAT?>>REALITY IS TIPPED EMPLOYEES
ARE ALREADY THE HIGHEST PAID EMPLOYEES IN THE RESTAURANTS,
SOMETIMES MAKING MORE THAN THE MANAGERS. SO THE WAITERS IN REALITY,
WAITERS WOULD BE THE FOLKS THAT WOULD BE MAKING THE 2.50
AN HOUR, WHATEVER THEY WOULD GET PAID BUT THEY ARE TAKING
HOME 15, 20, 25, SOMETIMES 40 AN HOUR IN TIPS. SO THEY ARE ALREADY THE
HIGHEST PAID SERVERS, EMPLOYEES IN THE RESTAURANT. REALLY WHAT THEY ARE, THEY ARE
LIKE COMMISSIONED EMPLOYEES, SO THEY ARE COMPENSATED BASED
ON THE SALES THEY MAKE FOR THE RESTAURANT.>>OKAY. IF YOU’RE PAYING A SERVER
11.80 AN HOUR WHICH IN MARCH WILL BE THE MINIMUM WAGE IN
TOWN, IF YOU’RE PAYING A SERVER THAT, ARE THEY STILL
GETTING TIPPED? WHAT AM I, AS A CUSTOMER, WHAT
I DO WHEN I LOOK AT THE BILL?>>THAT IS THE PROBLEM. WE DON’T KNOW. I THINK EVERY RESTAURANT IS
GOING TO RESPOND TO THIS DIFFERENTLY. SOME FOLKS — THEY HAVE
ELIMINATED THE TIP CREDIT IN SEVEN STATES. WHAT YOU SEE IS YOU SEE THAT
RESTAURANTS WILL PUT A SERVICE CHARGE SO THERE WILL BE
AUTOMATIC TIP, IF YOU WILL, ON EVERY TICKET. SOMETIMES, RESTAURANTS JUST
GET RID OF SERVERS AND GO TO A MORE COUNTER SERVICE OR SELF
SERVICE MODEL. THAT IS WHAT YOU SEE MORE IN
THE MODERATELY PRICED RESTAURANTS.>>ATRISCO’S MORE FAMOUS
SISTER RESTAURANT, TOMASITA’S, WAS FOUNDED BY GEORGE’S
MOTHER, GEORGIA MARYOL.>>FOR YOU IT COMES DOWN TO
THE EXPERIENCE THAT THE CUSTOMER IS GOING TO HAVE IN
TERMS OF THE IMPACT OF WHAT –>>I THINK IT WILL DRASTICALLY
CHANGE THE MODEL OF THE MODERATE RESTAURANT. A LOT OF PATRONS ARE SENIOR
CITIZENS ON A LIMITED BUDGET, FAMILIES, THEY LOVE THE
EXPERIENCE OF COMING IN AND DINING IN A RESTAURANT AND
BEING SERVED AND HAVING ATTENTION PAID TO THEM AND ALL
OF THEIR QUESTIONS ANSWERED. THIS WILL GO AWAY.>>BARTENDER CARLOS HAS BEEN
WORKING AT ATRISCO’S FOR TWO YEARS AND GETS PAID A HIGHER
WAGE THAN SERVERS BUT SAYS HE LIVES OFF HIS TIPS.>>MY HOURLY BASICALLY GOES TO
PAY TAXES AND THAT IS IT. I LIVE ON MY TIPS.>>WHAT DO YOU THINK HAPPENS
IF STATE LAW CHANGES TO REQUIRE THEM TO PAY YOU, 10,
11, 12 AN HOUR.>>IT IS GOING TO BE A HUGE
CHANGE FOR ME. LIKE, RIGHT NOW I PAY MY
HOUSE, MY BILLS, WITH THE TIPS, BUT IF THAT HAPPENS, I
AM NOT GOING TO BE ABLE TO DO THAT. IT WILL BE WAY LESS THAN I AM
GETTING NOW.>>YOU ARE THINKING PEOPLE
WILL TIP YOU LESS BECAUSE THEY KNOW YOU ARE BEING PAID MORE?>>EXACTLY. I MEAN, NOT ALL THE PEOPLE BUT
PERCENTAGE OF THAT, THEY ARE NOT GOING TO TIP. THEY USED TO TIP 10 BUCKS,
THEY WILL DO A DOLLAR, TWO DOLLARS.>>WHAT WOULD YOU LIKE TO SEE
COMING OUT OF THE LEGISLATURE?>>I WOULDN’T BE OPPOSED TO
MINIMUM WAGE THAT REACHES 15 AN HOUR IN NEW MEXICO. I’M NOT OPPOSED TO MINIMUM
WAGE INCREASE. HERE IN SANTA FE IT IS VERY
EXPENSIVE. THE LIVING WAGE IS STILL
REASONABLE. BUT, YOU KNOW, $15 AN HOUR FOR
ANY BUSINESS UP IN MORA, THEY JUST CAN’T AFFORD TO PAY IT. SO YOU’RE GOING TO SEE
ELIMINATION OF JOBS. I THINK THAT THE BILL AS IT
STANDS IS NOT THAT BAD IF IT JUST DIDN’T HAVE THIS TIP
CREDIT ELIMINATION. RAISING THE MINIMUM WAGE IS
NOT A BIG PROBLEM.>>THE BILL WILL SET A FIRM
WAGE FLOOR FOR TIP WORKERS, MANY OF THEM EARN AT THAT
LOWER WAGE OF A LITTLE MORE THAN $2 AN HOUR. LAS CRUCES DEMOCRAT JOANN
FERRARY IS ONE OF THE BILLS’ SPONSORS.>>WHAT DO YOU ANTICIPATE THE
IMMEDIATE IMPACT OF THIS BEING?>>WELL, FIRST OF ALL, IT IS
GOING TO MAKE SURE THAT PEOPLE WHO ARE WORKING AS TIP WORKERS
SEE AN INCREASE IN THEIR TIP WAGES FOR THE MINIMUM WAGE AND
THEN ALSO A GRADUAL INCREMENTAL INCREASE IN WHAT
THAT MEANS AS FAR AS THEIR GUARANTEE TIP CREDIT, AS THEY
CALL IT. SO, IT IS GOING TO MEAN THAT
PEOPLE ARE PAYING FOR NOT ONLY THEIR MEALS BUT ALSO FOR THE
TIPS THAT ARE FOR THEIR GREAT SERVICE THEY ARE GETTING.>>DO YOU EXPECT FOLKS TO BE
TIPPING LESS, MORE OR WILL THAT COST GET ABSORBED BY THE
RESTAURANT?>>I AM NOT SURE WHAT IS GOING
TO HAPPEN WITH THAT. WE ARE HOPING THAT PEOPLE WILL
STILL BE TIPPING GENEROUSLY. BECAUSE, THAT IS HOW WE VALUE
THE SERVICE THAT YOU GET. BUT, THIS WAY, WE ARE MAKING
SURE THAT TIP WAGE EARNERS AND PEOPLE WHO ARE WORKING HARD
GET THAT INCREASE TO A HIGHER MINIMUM WAGE AND WE BELIEVE
THAT HARD WORKING FAMILIES DESERVE TO HAVE HIGHER MINIMUM
WAGES.>>REPRESENTATIVE FERRARY
POINTS OUT THE CITY OF LAS CRUCES HAS ALREADY BOOSTED NOT
JUST ITS MINIMUM WAGE BUT ALSO THE LOWER WAGE FOR TIPPED
EMPLOYEES.>>LAS CRUCES HAS GONE UP TO
10.10 AND A PORTION OF THAT HAS GONE FROM THE 2:13
INCREMENTALLY UP TO, I THINK, 4.60 AS THEIR BASE FOR THEIR
TIPS. A TIP CREDIT. AND SO, YES, WE HAVEN’T SEEN
ANY CHANGES, YOU KNOW, OR COMPLAINTS FROM PEOPLE THAT
YOU KNOW, WE STILL ARE PAYING FOR THEM TO RECEIVE THE
MINIMUM WAGE BUT THEN ALSO TIPS ON TOP OF THAT, SO, YES,
THIS IN LAS CRUCES AS WELL AS OTHER STATES, CALIFORNIA,
WASHINGTON AND OREGON, THEY HAVE ALL MADE THIS TRANSITION
AND IT REALLY DOES HELP SUPPORT HARD WORKING
EMPLOYEES TO RECEIVE HIGHER MINIMUM WAGE.>>DEPENDING ON THE RESTAURANT
A LOT OF TIPS CAN COME IN CASH AND WHEN YOU HAVE DO SOMETHING
LIKE PROVE EVERYONE IS MAKING THE MINIMUM WAGE OR DEDUCT
PAYROLL TAXES IT CAN BE TRICKY TO TRACK DOWN. FERRARY’S BILL WOULD TAKE A
LOT OF THAT GRAY AREA OUT OF IT. THE SENATE WILL DECIDE IF THAT
IS THE RIGHT MOVE.

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