$15.00 Minimum Not Understood by Congress In Tip Oriented Environments – #53

Here’s what’s facing Mr. Fox, owner of numerous restaurants in Florida and Alabama where he employs 600+ employees. He’s currently paying a living wage to all his employees, but his servers who make $3.00 per hour – average from $17.00 to $28.00 salary when you add in tips. He will have to look at a possible 600% hourly wage increase to Servers plus increases to $15.00 to a large number of support personnel.

This feeling that a majority of Restaurant owners are making many times more than their employees is a myth that will be supported with the following facts. Mr. Fox sells a plate of chicken wings for $10.00. Customers assume that we keep $6.00 – $7.00 in profits from that sale. The actual profit is between $.50 -$.75 after paying for the food product, labor costs, rent, overhead and other expenses. His employees make more than he does (5%-7.5%), when they get to keep their tips (15%+salary). How could he face cost increases that would negatively impact his marginal profit model. If it works for the Servers, leave it alone – it seems to be working as good as it can be. I hope these facts are supporting Mr. Fox’s position, and clearly identify the lack of industry knowledge of our politicians at the City, State and Federal Government Congress) level. My recommendation would be for the Restaurant Industry to be allowed to have exemptions in key areas to make sure that we have a realistic environment. You just can’t have a universal law applicable to to all industry segments. If a bill is passed at the Federal level which makes it mandatory to implement these laws, Mr. Fox will be left facing the following options:

  1. Challenge all employees to exercise their innovativeness by letting their Managers know what their suggestions would be. Your employees make the “Best” Consultants.
  2. Close all or as many Restaurants as required which will result in the firing of existing employees.
  3. All employees go up to $15.00.
  4. Can’t pass along total cost increases through prices for meals to Customers. Increases in prices of meals will definitely change casual dining habits of existing diners.
  5. Prices for everything will go up.
  6. Job opportunities eliminated for young people, with special emphasis on Students, trying to cover interest payments on College loans, as well as those folks that enjoy the flexibility of work hours that the industry provide (days, daytime, evening).
  7. Relocate restaurants if law can be avoided in certain States or Cities.
  8. Fewer people will open new Businesses – translates to losses in job opportunities.
  9. Close restaurants and look for another line of work.
  10. Please become an ambassador for conveying this key info to everyone affected plus your Local, County, State, and Federal government officials.

I take a very special interest in this absolute travesty againsft the people in this industry due to my Authoring of a book SUPERSIZING YOUR TIPS that addresses the opportunities that exist in this industry.. Here is a perfect example of losers expecting working Servers to take a pay-cut from $20.00+ per hour to $15.00. If tips are to be distributed by the owner on an equal basis, the tips will be lower because every Customer is not about to pay for another Server, let alone require the administration of this clumsy process which in most cases will require the expense of another employee.

Basic Management Rule – If it works, leave it alone – IF IT DOESN’T WORK, FIX IT. – IT’S WORKING. Seven out of ten NEW Restaurant Owners are former industry workers – what an opportunity in a free country, that is about to become a violation versus an opportunity.