Flawed “Dining Guide” Recommendations from ROC-United Would Hurt Restaurant Employees
New Research Finds ROC’s Proposed Wage Hike Would Result in 12 Million Lost Work Hours
Publication Date: December 2011
Topics: Minimum Wage
Today, the Employment Policies Institute (EPI) responded to Restaurant Opportunities Centers United’s (ROC) new dining guide. Though ROC claims to help restaurant employees, new research from economists at Miami and Trinity Universities demonstrates that their policy proposal on tipped income will actually hurt those they intend to help.
ROC assigns poor scores to any establishment paying less than $5 an hour to tipped employees as a supplement to their tipped income. Yet the ROC report omits a crucial fact: an analysis of Bureau of Labor Statistics data shows the average hourly wage for these employees, with tips included, is already $10.95.
According to new research from labor economists at Miami and Trinity Universities, an increase in the federal tipped wage to $5 an hour—as ROC proposes in its new report—would leave restaurant workers with fewer hours and jobs. Specifically, the result would be the loss of approximately 12 million hours of work for tipped employees – the equivalent of nearly 300,000 full-time tipped jobs.
“Full-service restaurants keep three cents for each dollar in food sales, and every increase in labor costs has to be offset elsewhere when cost-conscious customers aren’t willing to pay higher prices,” said Michael Saltsman, research fellow at the Employment Policies Institute. “The research is clear: ROC’s attempt to help waiters and waitresses through government mandates will only result in fewer hours and fewer jobs.”