March 19, 2014

Maria Myotte, National Communications Coordinator

New Research Reveals States Without Subminimum Wage Have Higher Restaurant Sales Per Capita than Rest of US

As Senate Prepares for Vote on Proposed Minimum Wage Increase, ROC United Highlights Importance of Unfreezing Subminimum Wage for Tipped Workers

New York, NY — Today, Restaurant Opportunities Centers United (ROC United) released new data demonstrating that eliminating the subminimum wage increases restaurant sales and strengthens the restaurant industry. In the coming weeks, the Senate is expected to vote on a proposed increase to both the regular and tipped minimum wage that, if passed, would raise the tipped minimum wage to 70% of $10.10, relink it to rise along with the regular minimum wage, and peg both to inflation. The federal subminimum wage for tipped workers has been $2.13/hour since 1991.

Key findings include:

? Above-average employment growth occurs in the seven states that have already abolished the subminimum wage (Alaska, Montana, Nevada, Minnesota, California, Oregon, and Washington)

? Per capita restaurant sales increase as the tipped minimum wage increases. Growth in tipped restaurant worker as a percentage of total state employment tends to be higher in the states that pay tipped workers above $5 per hour, and is higher still in states that have abolished the subminimum wage.

? Eliminating subminimum wage does not decrease employment. In fact, the restaurant industry projects employment growth over the next decade of 10.5% in the seven states without a tipped subminimum wage, compared to 9.1% in states with a subminimum wage

? Since 2009, tipped restaurant workers have grown in importance as a percentage of total employed workers in $2.13 states, states where tipped worker wages are higher than $5.00, and states without subminimum wage—but growth of tipped restaurant workers as a percentage of total employment is highest in states without subminimum wage.

Eliminating the subminimum wage is picking up steam at the state level. Michigan’s gubernatorial candidate, Marc Schauer, and candidate for Senate, Gary Peters, are both supportive of Michigan’s ballot initiative to eliminate the subminimum wage. Kate McGinty, PA gubernatorial candidate, has been a strong advocate for eliminating the subminimum wage. Philadelphia State Senators, Daylin Leach and Mike Stack and Florida State Senator Dwight Bullard recently introduced legislation to eliminate the subminimum wage.

Despite findings that raising the subminimum wage does not adversely affect the restaurant industry, the National Restaurant Association has been staunchly opposed to the proposal and claims that raising wages would reduce jobs and sales. Last week, the New York Times revealed that the Restaurant Association and Darden Restaurants Inc. orchestrated a high-profile statement against the minimum wage increase.

Find “Impact of Raising the Subminimum Wage on Restaurant Sales and Employment” here.


Co-founded by labor rights leader Saru Jayaraman (“One of the top 50 most influential people in the restaurant industry” – Nation’s Restaurant News) ROC United has grown to over 13,000 members across 26 cities in the US, winning 13 worker-led campaigns, totaling $7 million in stolen tips and wages.