Food biz at crux of wage battle
The restaurant business is one of close margins, where even small increases in costs can make the difference between success and failure. This makes the industry ground zero for the debate over an increase in the minimum wage. Restaurant owners worry that a hike will cut into their profits, while more and more employees and advocacy groups are rallying for a living wage.
Supporters of an increase in the minimum wage frame it as a human rights issue, not just an economic issue. They refute claims by industry groups and conservatives that hikes would cause runaway inflation and unemployment.
In New Mexico, State Rep. for District 14 Miguel P. Garcia (D-Albuquerque) sponsored House Joint Resolution 9 in the most recent legislative session. The resolution would have amended New Mexico’s Constitution to establish a statewide minimum wage that would increase annually based on the cost of living as measured by the Consumer Price Index. The legislation did not pass the house vote, and a similar measure approved by the senate died in the house as well.
Every Republican in the house voted against HJR 9, but Garcia said he will continue to work for the passage of a state minimum wage.
“We got 33 for and 29 against,” he said. “We needed 36. It’s not just an economic decision — it’s a human rights issue,”
CEO of the New Mexico Restaurant Association Carol Wight said her organization opposes any amendment to the state constitution because such a measure would make it difficult to alleviate any unintended effects.
“If the minimum wage goes up, prices go up,” she said. “Tying it to CPI is irresponsible.”
Wight said she is concerned that such an irreversible action could lead to unemployment or inflation.
“How much do you want to pay for a burger?” she said.
The association helped to craft language for legislation on measures to increase the minimum wage in local municipalities, she said. She called the Bernalillo County minimum wage increase “easy to comply with” and a “model ordinance for other communities.” The county raised the minimum wage to $8 per hour on July 1, 2013 and to $8.50 the first day of 2014.
She said the Bernalillo County increase would be easy for restaurant owners to take into consideration when preparing their budgets.
“Those people did their homework,” she said.
On the other hand, she said, the Albuquerque minimum wage hike was not well thought out and is unfair to restaurant owners and kitchen employees alike. The city measure, enacted in 2012, increased back-of-the-house (line cooks, prep cooks and dishwashers) wages by only about 15 percent, while front-of-the-house employees (tipped employees such as wait staff) got a 143 percent raise, she said. This would force owners to cut hours or raise prices, she said.
“Servers often make $16 to $22 an hour on top of the hourly pay,” she said.
She said the association would support an incremental increase in hourly minimum wage for restaurant workers if it was done at a reasonable pace.
“Our mantra for right now is ‘Let’s be reasonable,’” Wight said.
Measures across the country that increased local minimum wages to above the national rate seem to be working, despite dire predictions from industry groups. In 1998 Washington State raised the minimum wage and tied it to the cost of living. Since then, the state minimum wage has increased to $9.32, according to the Washington Department of Labor.
According to an article on Moneynews.com, job growth in Washington averaged 0.8 percent per year. Over that same time, the national job growth rate was 0.5 percent. The poverty level in Washington has been lower than the national average for more than seven years.
The average payroll for bars and restaurants in Washington increased by 21 percent, despite fears that the hospitality industry would suffer from loss of jobs and employee hours.
Jared Ames is the director of New Mexico’s branch of Working America, an organization affiliated with the AFL-CIO that supports workers not represented by unions. The group has been involved in the effort to increase the minimum wage since 2007.
“We worked on the ballot initiatives in Albuquerque, Santa Fe County, Bernalillo County and now the state,” he said. “We represent 110,000 New Mexicans and are working for a positive change.”
The group will continue to work toward a living wage, he said.
Members of another advocacy group, Americans United for Change, focused on addressing income inequality, and have been traveling the country on the “Give America a Raise” bus tour, raising support for a $10.10 national minimum wage.
Originally scheduled for 11 states, the tour is now scheduled to stop in 20 or more, said Jimmy Donofrio, digital director of the organization. On April 22 the group held a press conference at Focus Ink in Albuquerque.
Nancy Denker, the owner of Focus Ink, said it was fortuitous that the event coincided with Earth Day. She said Earth Day is about sustainability, and the tour supports economic sustainability. Denker said she pays all of her employees a living wage.
Congresswoman Michelle Lujan Grisham (D-NM) also spoke at the gathering. She said she is happy that Albuquerque raised the minimum wage, and added that now it is time for Congress to do the same for America. An increase in the national minimum wage would put $35 billion into the hands of the families that need it most, she said.
“When people make a living wage, local economies thrive,” she said. “This is a moral issue for New Mexico families and families across the U.S. We must make sure our families don’t fall further behind.”