Before new New Mexico Gov. Michelle Lujan Grisham even gave her inaugural address, Democrats in the state House prefiled two bills that would increase the state’s minimum wage.
While there will be much debate over which is the right hourly wage for the state — the current $7.50 rate, $12 or even $15 an hour — both bills include language that would cut pay and reduce opportunities for New Mexico’s tipped employees by eliminating the tip credit.
For those unfamiliar with the term, the tip credit allows employers to pay tipped employees a lower hourly base rate, as long as our total income (base plus tips) reaches the standard hourly minimum wage. If tips and the base tipped wage do not add up to the full minimum wage, employers are required to make up the rest. This guarantees that all workers make the minimum wage.
So why not pay all employees one minimum wage rate and be done with it? Because most servers and bartenders earn well over the minimum wage. Many of us see ourselves as professional, commission-based salespeople. A minimum wage without a tip credit would effectively turn career servers — the most experienced of whom can earn up to $24 an hour or more — into entry-level employees.
If legislators had consulted with tipped workers, they would learn that we have no appetite for one unfair wage. Unfortunately, the rhetoric used by politicians sounds awfully familiar to that of the organization pushing to eliminate the tip credit, the Restaurant Opportunities Center.
While the center traffics in catchy slogans like “tips on top,” it demonizes tipping. Last year at a Restaurant Opportunities Center press event in Minnesota, one attendee said that “eliminating the tip credit is the first step to getting to no tips.” A board member was even caught on video saying that if the tip credit were eliminated, “restaurants will close,” and “people will lose their jobs.”
Across the country, servers and bartenders are begging for policymakers to hear them out. In Maine, where I work, thousands of servers successfully campaigned to restore the tip credit after seeing their tips begin to dry up (I was one of them). Similar efforts have been underway in Michigan, New York and Washington, D.C.
Meanwhile, Restaurant Opportunities Center’s lack of actual employee support in D.C. was so apparent that City Council Chairman Phil Mendelson, a Democrat, referred to the organization as “silent grassroots.”
New Mexicans need to be aware of the unintended consequences of compromising the tip credit. Harvard economists found that in the San Francisco Bay Area, which does not allow a tip credit, each $1 increase in tipped employees’ minimum wage led to a 14 percent increase in median-rated restaurant closures.
As a Democrat myself, it’s frustrating to see that eliminating the tip credit has become some kind of “progressive ideology.” This ideology has either not considered what the workers want or ignored them entirely.
A legislator once said to me, “Ya know what gets me about this tip credit fight? If any group of workers came before us Democrats, nurses or ironworkers or any group, we would listen to what they need. And as proud Democrats, we would have their back. But hundreds of servers and bartenders are telling us what they want and need, and we somehow turn a blind eye because we think we know better than the workers.”
I am hopeful that the governor will listen to servers and bartenders and refrain from signing any minimum wage hike that threatens the livelihood of tipped employees.
Joshua Chaisson is a co-founder of Restaurant Workers of America.