Minimum wage reform worries waitstaff and bosses alike

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Hundreds of servers from across Michigan gathered at the Capitol in September to protest the changes. Lana Face, a 26-year server who works at Buffalo Wild Wings in Delta Township, was among them.

“If we were to eliminate tipped wages, I’m going to be making about half the amount of money I am right now,” Face said.

The mother of four said she typically makes somewhere between $25 to $30 an hour working fewer than 40 hours a week. She believes serving is the only way she can make a living wage and still have enough time to care for her children.

“If it changes, I don’t know where else I’m going to go. There’s really no other job out there where I can make this kind of money,” she said.

Restaurant servers have traditionally made far less than the minimum wage, but they tend to make up or even surpass the difference after counting their tips.

However, a 4-3 Michigan Supreme Court ruling last summer, will gradually increase waitstaff wages over five years. The changes begin Feb. 21, when restaurant owners are required to increase their hourly payroll for servers from $4.01 to $5.99. From there, it will grow 10% each year until it matches the state’s standard minimum wage at the end of the — at least $14.97 an hour.

In response to the pushback, legislators have started taking steps to reverse the decision. On Jan. 14, the House Select Committee on Protecting Michigan Employees and Small Businesses held a public hearing where Face and 32 others spoke for keeping the tipped wage system as is.

Only two spoke for retaining the phase-out plan. Michigan AFL-CIO government affairs director Ryan Sebolt, who is also an Ingham County commissioner, stressed that the change would not end tipping altogether. He noted that California, where servers make a minimum wage of $16.50 an hour, still leads the country in the average amount of tips at 22.69%. According to a recent study from the tech company, Square, Michiganders tip an average of 16%.

Detroiter Sam Taub was the only server who spoke for the proposed changes. Taub, who represents One Fair Wage, a New York-based nonprofit that’s become a national advocate for increasing the server minimum wage, cited the inconsistency of the system, under which he said servers often put up with sexual or racial harassment out of fear of losing their tips.

Following the hearing, the committee sent House Bill 4001, which would repeal the Supreme Court’s decision and retain the existing tipped wage structure, to the full House late last week. The House is expected to vote on it in the next week or so.

Alac McCann, a restaurant server of 17 years who’s spent the last five at the People’s Kitchen on Lansing’s east side, is concerned that the changes would also harm kitchen staff, who she said may also see their wages go down as restaurateurs try to balance their new payroll structure.

“If everybody in the front of the house is making minimum wage, that’s going to eliminate higher wages for the kitchen staff. Our livelihoods are based on tips, but they deserve a fair wage, too,” she said.

On a good night, McCann said she pulls in more than $35 an hour.

“The majority of servers I know wouldn’t be in this industry if they were only making minimum wage. The system works well as it is, and if you implement something like this, you could have small restaurants close their doors. That’s really scary,” McCann said. 

One sixth-year Lansing server, who asked City Pulse not to publish her name, echoed McCann’s fears that a higher minimum wage would encourage customers to tip far less, or perhaps even forego tips altogether.

“Another thing I think people don’t really consider is that we’re going to get taxed more because we’d be getting more hourly. I think at least 95% of servers would probably agree with me,” she said.

Tate Skiba, general manager at Old Town’s MEAT BBQ, anticipates a mass exodus from the industry if Feb. 21 rolls around without any action from the Legislature.

“I think you’ll start seeing a lot more quick counter-service places and a lot fewer full-service-style restaurants,” he said. “That’s going to kill you, because if your payroll goes up 300%, you also can’t raise prices too much or you’ll lose customers. You have to find ways to shave off the top in other areas.”

Michael Krueger, owner of Crunchy’s and the Peanut Barrel in downtown East Lansing, doesn’t expect the Legislature to alter the plan right away.

“I think it probably is initially going to go into play because I can’t imagine that they’re going to get anything done before then. Ultimately, before we make any major changes to turn Peanut Barrel into a quick-service restaurant, we’ll have to cut down on some staffing and raise some prices to help make up that difference. We’re already barely making any money as it is, and to be able to absorb that kind of a cost is just not realistic,” Krueger said.

He added that, on slow nights, he’ll already make up the difference on his servers’ paychecks.

“If they don’t make up the difference in tips, we already cover that for them,” he said.

“It’s going to be a trickle effect. It’s definitely going to hurt our economy very badly, especially smaller restaurants,” Face said.

Face is preparing for the worst, but hoping for the best.

“If it does go through, we’re going to see a trickle effect across our entire economy. Distributors will be impacted, and smaller restaurants, in particular, will have to close,” she said. “Right now, I don’t have any other option but to be hopeful.”

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