Restaurant association warns Congress on minimum wage hike

The restaurant industry is urging Congress against increasing the federal minimum wage, warning that restaurants would suffer from a fast-tracked wage boost amid the coronavirus pandemic.

The National Restaurant Association wrote a letter to congressional leadership on Tuesday, arguing that raising the federal minimum wage would push more employees off of payroll, raise menu prices and force more restaurants to close. 

Senate Democrats are debating whether to keep a minimum wage increase in President Biden’s COVID-19 relief package. The provision would boost the minimum wage from $7.25, where it has stood since 2009, to $15 an hour by 2025.

“Passage of this bill this year would lead to job losses and higher use of labor-reducing equipment and technology,” said Sean Kennedy, executive vice president for public affairs for the National Restaurant Association. “Nearly all restaurant operators say they will increase menu prices. But what is clear is that raising prices for consumers will not be enough for restaurants to absorb higher labor costs.” 

The Raise the Wage Act, which Sen. Bernie Sanders (I-Vt.) introduced last month, would also phase out the tipped minimum wage for restaurant service workers.

“Eliminating the tip credit will hurt millions of servers who rely on the current system where they earn between $19-$25 an hour with tips,” Kennedy wrote to Congress. 

The National Restaurant Association conducted a survey that found that 82 percent of restaurant operations say the initial wage increase would negatively impact the ability of the restaurant to recover from the pandemic.

The survey also found that 98 percent of restaurant operations said raising the federal minimum wage and eliminating the tip credit would lead to increasing menu prices.

The association surveyed 2,000 restaurant operators from Feb. 2-9.