Less than two months ago I became president of the Maine Restaurant Association. Like most Mainers, I was aware that there was a minimum wage referendum (Question 4), but I did not understand the details buried within the question itself, nor the negative impact it would bring to small business restaurant owners and, more importantly, to their employees and customers.
Talking with folks across the state, I have now learned the most damaging part of Question 4 is its elimination of the tip credit — the part of the present law that allows the base pay of waiters and waitresses to be at half the prevailing wage. As most folks understand, the bulk of server compensation is earned from customer tipping. Passage of Question 4 will fundamentally change how restaurants in Maine operate. The negative consequences will be felt by us all.
The Maine Restaurant Association does not oppose a measured increase in the minimum wage. It’s part of our strategy to develop good jobs and grow Maine’s restaurant sector — one of the state’s most important industries. Restaurants are vital to local farms, the seafood industry and many other supporting businesses and suppliers. As a gathering spot for residents and visitors alike, local restaurants help to improve the quality of life in cities and towns throughout Maine.
We believe that a successful year-round restaurant industry has a profound economic impact on state tax revenues, as well as producing careers and employment at all levels of staffing.
But the ill-conceived Question 4 removes the long-standing tip credit, which is fundamental to restaurant finances and server compensation. Passage of Question 4 would damage the strength of the industry and change it forever.
Years ago, I worked my way through college as a waiter, earning more money in less hours than my counterparts in other summer jobs. I also learned about customer service and sales at a very young age and it helped steer me to a successful career in hospitality.
My fear is that if Question 4 passes, restaurant owners, who operate on very thin margins already, will be forced into one of 3 paths: raise menu prices, reduce the hours of their staff or simply go out of business. I can envision a sad future where waiters and waitresses are replaced by iPad ordering systems, or by service fee schemes that could eliminate tipping altogether. Therefore it is both traditional servers and the restaurant businesses themselves that are at risk.
No restaurant — from counter service to full service — can absorb such an increase in the tipped wage without making these hard decisions. No state east of the Mississippi even has such a law.
Unfortunately, Question 4 does not give voters the opportunity to support a minimum wage increase while still retaining the tip credit. So, only a “no” vote on Question 4 will show support for Maine’s restaurants and the proud tradition of hospitality in Maine.
Steve Hewins is president of the Maine Restaurant Association, Augusta.
Send questions/comments to the editors.
