OPINION | It’s Time to End the Sub-Minimum Wage

by Sean Case

Restaurant workers and other tipped workers in Seattle are expecting a significant and much-needed raise on Jan. 1. Ten years ago, the 15 NOW movement won passage of Seattle’s historic minimum wage law, a victory later replicated in cities across the country. In negotiations for that law, City Hall appeased business lobbyists by granting a 10-year phase-in period for “small businesses” (defined as businesses employing fewer than 500 workers), as well as a tip penalty, which has allowed businesses whose workers make tips to pay their workers less than the full minimum wage.

Now the 10 years are up, and it’s time for all businesses to pay up. The coming raise will give around 200,000 tipped workers in Seattle relief as we struggle to pay rent, buy groceries, and afford health care.

But not if the local restaurant lobby has anything to say about it. The Seattle Restaurant Alliance (SRA), one of the same business groups City Hall appeased in 2015, is now lobbying to make the sub-minimum wage permanent in Seattle in an attempt to preemptively rob the workers who power their industry.

In early August, District 3 Councilmember Joy Hollingsworth drafted legislation that would have allowed restaurant owners to continue to underpay their employees indefinitely. Hollingsworth then caved to pressure from restaurant workers, organized labor, and supportive members of the public and withdrew her bill.

But the fight over the sub-minimum wage isn’t over, and if business lobbyists are successful in their attack in Seattle, it will send signals to their counterparts across the country that it’s open season on low-wage workers.

The SRA is now pressuring Mayor Bruce Harrell as he prepares to oversee a “stakeholdering process” to reach a compromise. But tipped workers’ wages were already compromised 10 years ago, and we’re not going back. We need to fight back against this preemptive wage theft by getting ourselves organized.

Who Are the SRA?

The people leading the charge to undermine Seattle’s minimum wage law are the board members of the SRA, a local chapter of the National Restaurant Association, which spends hundreds of thousands of dollars every year lobbying Congress to keep the sub-minimum wage in place at the national level. In a July 26 Seattle Times article, SRA vice president and Portage Bay owner Amy Fair Gunnar complained about how much it would cost her to pay her workers a living wage and says the pandemic and inflation justify making a tiered wage system permanent.

Portage Bay received $2.7 million in COVID relief money in 2020 and 2021. Restaurant workers risked their lives to get Seattle restaurants like Portage Bay through the pandemic, and the restaurant just opened a fifth location this year.

The SRA claims to have the best interest of restaurant workers at heart as they plot to prevent raising their pay. They wring their hands about layoffs and restaurants going under en masse, leaving workers with nowhere left to work. But this is a familiar tune.

The SRA raised the same specters in 2014 in response to the 15 NOW campaign. They made the same claims that restaurants wouldn’t be able to survive Seattle’s paid sick leave law in 2011 and a 48 cent raise to the state minimum wage in 2008. Hell, they even clutched their pearls about the costs of Seattle’s composting laws. And yet the restaurant industry has apparently survived all these world-ending scenarios.

The SRA will also tell you that eliminating the sub-minimum wage will somehow mean tipped workers will make less money. But research shows that tipped workers in states that have ended the sub-minimum wage haven’t experienced a decrease in the tips they earn (this includes almost all of Washington State outside of Seattle).

As for the fearmongering about mass restaurant closures, it’s not based in reality. Restaurants in localities without a sub-minimum wage experience higher sales growth. Eliminating the sub-minimum wage could also help small businesses cut down on employee turnover, a problem that plagues the restaurant industry in particular.

What a Raise Would Mean for Tipped Workers

The recent walkout action by employees at Cherry Street Coffee House helped expose the SRA’s lies. Immediately after the walkout, Cherry Street Coffee owner Ali Ghambari, who was one of the business owners lobbying to make Seattle’s sub-minimum wage permanent, offered the workers a $1 raise and summer bonuses, and agreed to pay his workers the full minimum wage at the beginning of next year. If his cafés are really in such hot water, how could he possibly offer such a raise to his entire staff? What the fight over the sub-minimum wage is really about is business owners trying to maintain a system that benefits them at the expense of their workers and the broader public.

Tipped workers experience poverty at more than twice the rate of non-tipped workers. Restaurant servers rely on food stamps at more than one-and-a-half times the rate of other workers. Despite rhetoric propagated by the restaurant lobby, tipping is neither a reliable nor lucrative model for workers who rely on tips. Eliminating the sub-minimum wage would be a huge step in improving the lives of some of the lowest paid workers in Seattle.

A higher minimum wage for tipped workers, with tips on top, will allow us more breathing room as we bear the brunt of inflation. Our time off work, whether for enjoyment or illness, would be less stressful. Currently, when workers who are paid the sub-minimum wage take time off, we are only paid our base hourly wage, not our full wage. This encourages workers not only to work more overall, but also to come into work while sick.

Eliminating the sub-minimum wage would also generate more solidarity among tipped workers. By raising and equalizing the wage floor, we can begin to equalize and demystify tip pools, which in many businesses are opaque and lopsided. By generating equity in our workplaces, we can begin to dismantle the long history of worker divisions in the industry, from back-of-house/front-of-house resentments to infighting among servers over the best shifts and sections. This can generate better relationships with our co-workers and better service for the public.

Perhaps most important in the long-term, abolishing the sub-minimum wage is a serious step toward restructuring the tipping system as a whole. By relying less on tips, workers will feel more comfortable pushing back against endemic harassment in the industry. The restaurant industry is disproportionately staffed by women (who make up two-thirds of the industry) and People of Color. And it’s well documented that tipped workers of color, especially Black workers, make less in tips than their white counterparts.

How to Help Struggling Small Businesses Without Punishing Workers

Tipped workers refuse to be sacrificed on the altar of small business. It’s true that some small businesses are having trouble making ends meet and that labor is a large percentage of their costs. But it’s telling that the business owners at the forefront of the push to give a pay cut to tipped workers are actually doing quite well for themselves. Several own multi-million-dollar homes and run several restaurants. It’s also telling that their only policy prescription for helping small businesses comes at the expense of the workers who make those businesses run.

If City Hall and the SRA are serious about helping struggling small businesses, there are myriad ways for them to do so that not only don’t punish workers, but actually help them as well:

The rent is too damn high.

Commercial rent is soaring just the same as residential rent. Commercial rent control is an obvious demand to take some pressure off small businesses.

City Hall should also make funding Seattle’s social housing developer a top priority to begin putting downward pressure on the price of residential rents.

Level the playing field for small businesses.

City Hall should pass laws that give priority to local small businesses in commercial leasing agreements. Currently, large companies have a huge advantage in this arena and gobble up most available properties.

Let’s establish a publicly owned municipal bank that can issue low-interest loans to small businesses.

Portable retirement plans for small business workers.

Part of the high employee turnover problem for restaurants and other small businesses is the lack of benefits offered at those jobs. City Hall can design a public pension plan that would stay with workers even if they switch jobs, and which small businesses could easily contribute to in order to attract and retain workers. This would also save small businesses the costs of running their own retirement plans and help them compete with larger companies who do offer benefits packages.

Safety and accessibility in the industry.

Let’s expand late-night public transit. A 24-hour, frequent transit system will create a safer, more bustling nightlife and entertainment industry for Seattle.

We need to dramatically expand social services for the homeless and people suffering from mental illness and addiction. Service workers and the businesses they work at are often on the front lines of dealing with this social crisis. We deserve a city that takes a serious and humane approach to ending homelessness by getting people into housing and providing well-funded treatment centered in dignity and harm reduction to those who need it.

We need to fight to tax the rich and big business to win all these things and more. The COVID-19 pandemic showed the government can step in to support small businesses and workers in a time of crisis; many of the restaurant owners pushing to maintain the tip penalty received huge sums in PPP loans — money that they (rightfully) never had to repay. There’s enough wealth in Seattle to address our cost of living crisis and allow workers and small businesses to thrive.

Call to Action

We cannot allow City Hall’s and the SRA’s attack on the minimum wage to succeed. They say small businesses can’t afford to pay higher wages, but the tipped workers who run those businesses can’t afford not to get a raise. And we need much more than that. Restaurant workers and other tipped workers need to organize to defend our minimum wage and then go on the offensive.

Ultimately, it’s on us as workers to generate the change we need. If we get organized and stay organized, we can win reforms like secure scheduling and more funding for the city’s Office of Labor Standards to pursue labor violations like break denial and other forms of wage theft. We can organize across shops to fight for the above reforms. We can also organize our individual workplaces to enforce our own rights and win unions in our restaurants, bars, and cafés.

Restaurant Workers United is currently organizing restaurant workers to fight back against City Hall’s attack on our wages. We’re doing direct worker outreach to get people educated, agitated, and organized. If you want to get involved with these efforts or if you want help organizing your workplace, reach out to RestaurantWorkersUnited@gmail.com.

Signed,

Sean Case, line cook at Saint Bread, VP Restaurant Workers United

Liv Kennemer, barista

Korinna Knapp, barista/server

Cleo Gallagher, barback

Adeline Braverman, line cook at Saint Bread

Kane Manning, cook

Molly Boyce, baker at Saint Bread

Melissa Brown, barista/server 

Avelyn Ihyll, busser

Brianna Martinez, bartender

Rachel Ybarra, barista at Starbucks

Mari Cosgrove, barista at Starbucks

Sarah Dealy, cook

Kai Ortiz, shift lead at Homegrown

Clio Jensen, sandwich partner at Homegrown

Zane Smith, keyholder at Homegrown

Sydney Lankford, shift lead at Homegrown

Eva Whited, line cook at Volunteer Park Cafe

Jo Duvall, barista

Venus Peek, barista

Amira Macey, barista 

Conor Dolan, barista

Michael Pablo, barista

Aeron Wicks, cook at Saint Bread

Séamus Loftus, cook

Damon Kauhola, security/barback at Saint John’s

Alexis Modula, line cook at Bait Shop

Seth Pacleb, member-owner at Pidgin Cooperative

Zachary Pacleb, member-owner at Pidgin Cooperative

T.R., member-owner at Pidgin Cooperative

A.M., member-owner at Pidgin Cooperative

Celina Walker, server/barista at Saint Bread 

Kristi Yamamoto, server at Sophon 

Iago Noya, server at Terra Plata

Editors' Note: This op-ed was updated on 09/23/2024 to correct a typographical error.

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