OPINION | Proposed Wage Ordinance Would Help Bosses, Hinder Workers

by Jesse Kennemer

After years of advocacy, Seattle locked in a new minimum wage in 2014 to be phased in over the course of many years. As part of a compromise with business owners, the City established two separate minimum wages. Companies with 501 or more employees worldwide would pay one wage, and companies with fewer than 500 employees would pay a lower wage, provided the difference between the two wages was made up in tips from customers or contributions toward medical benefits by the employer.

Each year since 2015, a new higher wage, tied to inflation, has been established on Jan. 1 as planned. As of Jan. 1, 2024, the minimum wage stands at $19.97 for companies with 501 or more employees and $17.25 for tipped employees of companies with 500 or fewer employees. This compromise was always intended to be temporary. On Jan. 1, 2025, there will no longer be a second lower wage. All workers, regardless of how much they make in tips or how small their company may be, will be entitled to the same minimum wage. That is, unless the Seattle City Council or the Mayor's Office manage to scuttle the agreement.

On July 30, Councilmember Joy Hollingsworth introduced a bill calling for a permanent extension of the sub-minimum wage for tipped employees of companies with 500 or fewer employees. The proposal represented an intensely pro-business element of the Council moving to appease the panic of a small number of business owners with no regard for the negative impact it would have on a much larger number of minimum wage service workers. The negative response to this proposal was swift and powerful, and within three days, Hollingsworth had pulled the bill.

Hollingsworth's ordinance specifically cited the pandemic and "unexpected and significant inflation in food prices and in other goods and services" and claimed that no longer being allowed to count tips toward minimum compensation "will create a financial hardship for small food-service businesses and their customers." It is obviously true that the pandemic and inflation have been a hardship for businesses, especially restaurants, but these catastrophes have not skipped over the workers to make a beeline for our bosses. We pay inflated food prices and ballooning rent with the wages that this ordinance claimed cannot increase as planned.

The councilmembers who drafted this ordinance were not satisfied with making permanent the two-wage model from the last decade. They planned to go further. The bill from 10 years ago counted "payments toward the employee's medical benefits and/or customer tips paid to the employee" as part of the required total hourly minimum compensation. This ordinance would have allowed employers to count commissions, piece-rate pay, and bonuses in addition to tips and medical benefits. The idea that my hourly wage should go down because my boss gives me a holiday bonus is completely absurd. A bonus is meant to come as an addition to wages, an extra show of appreciation for an employee's dedication and hard work. Not a cynical investment toward lower monthly payrolls down the line.

While this particular piece of legislation was essentially dead on arrival, it seems likely the Council or the Mayor's Office will make another attempt at pacifying the Seattle Restaurant Alliance and restaurant owners like Amy Fair Gunnar of Portage Bay Caf and Gary Szeredy of Queen Anne Beer Hall, who spoke in favor of the failed bill in front of the Council. Hollingsworth has said she will seek a "new approach" to getting the sub-minimum wage extended, and the Council will have one last stretch in the fall to try to make it happen.

Rendering the sub-minimum wage permanent at the eleventh hour of a 10-year process is a regressive panic move. Seattle's workers deserve better, and frankly, I believe Seattleites deserve better as well. Tipping has, since its inception, been a flawed system that calls for customers to subsidize the wages of workers on behalf of their employers. While some restaurant workers, classically bartenders and fine-dining servers, depend on high tips to command much higher total compensation than they could ever hope to command from their employers in wages, many other food-service workers, like cooks, dishwashers, food runners, and bussers, are often still tipped out but make only a few extra dollars per hour on top of their hourly wage. These workers deserve the raise they were promised by the City Council a decade ago.

Ten years should be enough time to wean companies with fewer than 500 employees off of paying a sub-minimum wage and relying on customers to pick up the difference. I'm happy to have cooked for small independent restaurants and bars for my entire career, and I respect the differences between my boss and the CEO of a massive company. If the City would like to subsidize small-time bosses like mine so they can have some help competing with mega-chains, I'm all for it. Punishing workers for choosing to stick with those small, independent employers by allowing them to be paid a lower minimum wage is not the way to do it.

Of course, tipping won't be abolished in the city on Jan. 1, 2025, even if the tip credit ends as originally promised. But we will at least be moving one step closer to employers themselves paying service workers a fair wage. When a customer stiffs a pizza delivery driver on a big order, they will have a more solid wage to fall back on. When a server is forced to call in sick knowing it means losing out on the day's tips and settling for the day's wages in paid sick leave, that calculation will be a little less dire.

In this city, where even one of the nation's highest minimum wages is nowhere near enough to cover the cost of living, workers will take any help we can get. We know we are not the only ones struggling. We know that running a restaurant or other business has not been easy these past few years, and as customers ourselves, we understand what it's like to be on the other side of the counter while prices spike faster than wages. The tip credit must be allowed to expire as decided 10 years ago. Throwing minimum-wage workers under the bus to make things a little easier for our bosses is not a sustainable path forward for our city.

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Jesse Kennemer is a line cook and writer living in Seattle, Washington. They enjoy cooking for a community meal program in Capitol Hill, studying food history, and growing vegetables in their alley.

Featured image via Lucky Business/Shutterstock.com.