Restaurant franchisee Larry Fox is pushing back against Democrats’ plan for $15 minimum wage.
“A lot of my employees are young, they’re going to school and they use this as flexible work hours to earn up to 20, 25, 28 dollars an hour. It gives them the ability to work and stay in school, but if I lose the tip credit that will increase my labor cost 100%,” Fox said.
The franchise owner wrote in his opinion piece for the Wall Street Journal Friday that his employees make upwards of $18 to $28 an hour, which is more than the living wage for working adults in Alabama where his restaurants are located. He said:
Unfortunately, some well-meaning members of Congress are trying to pass a minimum-wage bill that would destroy my business model. Tipped employees are currently paid a lower base wage and are legally guaranteed to earn at least the minimum wage with tips included. My employees average roughly three times the relevant minimum wage when tips are accounted for.
Fox accused Rep. Terri Sewell (D-AL) of introducing several bills that would prevent this system from continuing. He said if these bills are passed, his employees will be forced to make at least minimum wage before tips.
“A handful of states—Alaska, California, Minnesota, Montana, Nevada, Oregon and Washington—have adopted this approach,” Sewell said. “Were it to take effect in Alabama, it would represent as much as a 600% increase in the hourly cost of paying a tipped employee to work for me.”
The Independent Women’s Forum argued in a post Monday that no matter the good intentions, forcing employers to implement a $15 minimum wage could potentially sink businesses.
According to the post:
The reality is that small, mid-sized, and regional employers often take the brunt of these costly mandates. They care about their customers and their workers and will try to keep both happy. When cost-cutting and price increases aren’t enough, some go out of business.
A recent study conducted by the Employment Policies Institute states that 83 percent of respondents believe the federal minimum wage mandate would harm youth employment levels. The study also said that 67 percent of respondents are concerned that the mandate would make it difficult for small businesses to stay afloat.