Cuomo’s restaurant pay issue a contentious one

Gov. Andrew Cuomo’s plan to increase tipped restaurant workers’ wages to the same minimums as other workers will likely result in quite a public battle.

Restaurant owners are already gearing up to testify against the proposal. And some workers are ready to demonstrate in support of it.

Cuomo, in announcing that he will include the measure in his State of the State address, had said a single minimum wage for all workers, including restaurant workers, would help elevate working conditions and counter discrimination for a workforce that is disproportionately female and minority.

A representative of restaurant companies, however, predicted the measure would increase costs of consumers as restaurant owners raise prices to cover the difference between the current minimum of $7.50 an hour and the increased rate of $10 upstate and $11 in New York City. In addition, she said, many restaurant owners would institute a no-tip policy in order to compensate consumers for the higher menu prices. And workers will be paid less in the long run, she said, because tips can be lucrative.

“This is bad for everybody. Bad for the restaurants, bad for the employees, bad for the customer,” said Melissa Fleischut, president and CEO of the 2,000-member New York Restaurant Association.

“People like tipping and like to decide how much to pay. I’m not sure they’re prepared to pay 15, 18, 20 percent more on all menu items,” Fleischut said. “We’re talking about a huge increase if (serving staff are) going to get paid what they’re currently earning. It would turn the industry on its head.”

Mohini Sharma, a former restaurant worker who now works as an organizer of restaurant workers for Metro Justice, painted a much different picture.

“No, it is not bad for workers,” she said. “In the seven other states in which there is one fair wage, tips either increased or stayed the same. There was no negative impact on tips in states that increased the minimum.”

She cited a study that found tipped restaurant workers are more likely to be sexually harassed than any other kind of worker because the pay situation sets up a culture in which customers feel they can comment on server’s sexual appeal and workers feel they must put up with it or risk starving.

The same study found local businesses thrived rather than suffered when restaurant workers made at least the same minimum wage as other workers, Sharma said.

“When most of your population can afford to consume, they go out. When restaurant workers made a living wage, in addition to their tips, they went out more,” she said.

Both groups intend to speak out about the governor’s proposal, which must undergo hearings before it can be enacted.

Members of the restaurant association will testify on the change’s impacts, Fleischut said. She said some have raised prices, reduced portion sizes, substituted technology for servers, and eliminated price-included extras.  More changes will come if the proposal goes ahead, she said.

“It’s not a dramatic impact yet, but if this goes through, it will be,” she said.

Sharma said restaurant workers will demonstrate, as they did in September, in Rochester and Albany to support the “One Fair Wage” initiative.

“We’re going to make sure restaurant workers voices are first and foremost because this is their lives we’re talking about,” Sharma said.

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