Why don't fast food places lobby for an increase in tipped minimum wage?

May 27, 2014 11:33 PM

It seems like fast food places are at a huge disadvantage compared to tipping restaurants since they have to pay their staff so much more (around $5 per hour).

The cost to eat at a casual tipped restaurant is very similar to fast food until you add the tip in and people don't really count the tip when price comparing, at least in my personal experience. Why don't they try to level the playing field by calling for an increase in the tipped minimum wage? It seems like a publicity win by saying servers should be paid a reasonable wage and it would raise restaurant prices so the fast food places would be more competitive.

Is there some secret restaurant/fast food non-interference pact I don't know about, do all the fast food places also own tipping restaurants or some other reason? I know this isn't the most earth shattering question but it really gets stuck in my head every time a discussion about tipping comes up. Theories are fine but if you can back it up with links to reputable sources, that would be the most helpful.

posted by stray thoughts to Work & Money (9 answers total)

Because even after tips, most waiters at casual restaurants make more than your typical fast food worker. Calling for a raise in the tipped minimum wage would only draw attention to that.

Additionally, most people view fast food as different in kind from casual restaurants and are unlikely to substitute one for the other.
posted by matildatakesovertheworld at 11:45 PM on May 27, 2014

There are quite a few states that don't count tips as part of minimum wage. (And the whole tip amounts are *supposed* to be reported - but rarely are.) A minimum wage fast food worker in my area gets paid the same amount that a minimum wage server does, though the server probably gets tips. (Some individual, some tip-share; it's up to the business.)

That said, the cheapest sit-down restaurants (NOT counting tips) are priced approximately the same as the most expensive fast food places, at least around here. (And we have above-average restaurants per capita, almost ridiculously so. Grumble-grumble tourists.

That said, if you're going to get minimum wage anyway, and you want the most $'s in tips, you barista or bartend. (It's the Pacific Northwest; we have coffee and microbrews everywhere.)
posted by stormyteal at 12:01 AM on May 28, 2014 [1 favorite]

I was surprised by how many states have a lower minimum wage for tipped employees. In Oregon, there was a big push in the 90s, from business owners, to go to the lower wage for servers but it didn't move forward (PNW FTW).

I am not sure that increasing the wage of the tipped employees is exactly what they want to see. I was thinking they'd push for all 'servers' (fast food or other) to have the sub wage and accept tips. Although, I have to agree with Matildatakesovertheworld, that tipping restaurants and fast food are not really seen as the same thing. I think the relationship is maybe more like a convenient store to a grocery store. Different pieces of the market and not necessarily true competitors in this regards.

In the end I think the businesses probably see themselves as winning with the sub wage and an increase in wage just for publicity doesn't seem likely (assuming that business owners are 'they' in your original question).
posted by W.S (disambiguation) at 12:31 AM on May 28, 2014 [1 favorite]

In practice, as someone who's done payroll, I'm almost positive that the "minimum wage" does not exist for the usual labor protection purposes for tipped workers. It exists to make sure that employers are keeping their serving staff in the payroll system and actually doing withholding and remitting of payroll taxes. That amount per hour gives a wage base that can be deducted against, I assume there was probably some calculation that the current amounts provide roughly enough that even if an employee's making a reasonable wage in cash tips, there's usually enough in the actual paycheck to cover their tax withholding, so that they don't end up seriously under-withheld at the end of the year.
posted by Sequence at 4:12 AM on May 28, 2014 [2 favorites]

Best answer: Are you sure they don't? You might be right, but just because you don't hear about it doesn't mean that they are not lobbying for it behind the scenes.

It seems like the big restaurant lobby is the National Restaurant Association, which includes fast food (QSR, or quick-service restaurants, in industry lingo). Naturally the NRA doesn't want any increase in the minimum wage, either tipped or untipped. And the QSR industry might not want to anger their fellow restaurant owners by publicly lobbying for a higher tipped minimum.
posted by Mr.Know-it-some at 6:11 AM on May 28, 2014 [1 favorite]

Raising any minimum wage will almost certainly lead to raising all of the minimum wages. No one who has to pay one will advocate for raising another, because the conversation will inevitably lead to "Well, while we're at it, let's raise this other one too."
posted by Etrigan at 6:40 AM on May 28, 2014 [1 favorite]

Jobs in a regular restaurant are pretty specific, cook, dishwasher, server, hostess. Jobs in fast food aren't. When I was a kid I did the drive-thru, I flipped the burgers, I assembled the tacos, cleaned the bathrooms, swept the parking lot and prepped veggies in the back. Whatever needed doing, the kid in the brown paper hat did it. It doesn't lend itself to a tipping model.
posted by Ruthless Bunny at 9:43 AM on May 28, 2014 [2 favorites]

The difference between fast food workers and tipped workers hourly wages is nonexistent or very, very tiny.

In Canada. What jurisdiction are you talking about?
posted by ethnomethodologist at 11:05 AM on May 28, 2014

Response by poster: The "they" I was talking about was fast food places who pay the higher minimum wage. They could benefit by talking about the unfairness of paying fast food employees over $5.00 more an hour compared to restaurants with tipped employees.

I'm in the U.S. in Indiana. Tipped minimum wage is $2.13 and regular minimum wage is $7.25 so there's a big difference. Part of what brought this question up was my sister wanting to go to a Mexican restaurant because the price difference compared to McDonald's meal deal (quarter pounder, fries, drink) wasn't that much. It's probably cheaper to get the lunch special at the Mexican place until you add in the tip. Qdoba is probably more expensive than the real Mexican restaurant. That might even include the tip if you're eating lunch.

I've signed a couple petitions for raising the tipped minimum wage so there are at least some servers who'd like it raised. I could understand servers at the more expensive places being okay with the status quo.

I'm very open to the idea that minimum wage for servers is to make sure employers are withholding enough to pay taxes instead of protecting workers. I'm kind of cynical so it makes this rings true to me.

I think fast food places wanting to pay a sub wage too and getting people to tip would be a hard sell for the public but the pizza places around here have quit paying minimum wage and pay $4.00 to $6.00 an hour with tips making up the rest so who knows.

Lobbying behind the scene or not wanting or not wanting to anger other restaurant owners makes a lot of sense.

Thanks to all for your answers! It's given me some things to think over.
posted by stray thoughts at 5:34 PM on May 28, 2014