Feb. 1, 2021

National Restaurant Association, NFIB Warn Minimum Wage Increase Would Harm Recovery

The National Restaurant Association has released a statement opposing the Raise the Wage Act, which would increase the federal minimum wage from $7.25 per hour to $15 per hour in phases over the next five years and eliminate tipped credit for servers.

“The Raise the Wage Act imposes an impossible challenge for the restaurant industry,” said Sean Kennedy, executive vice president of public affairs for the National Restaurant Association. “While other businesses on Main Street are starting to see a recovery, restaurants across the country are struggling to stay open amidst indoor dining bans or limits that have been in place for ten months. The industry has laid off 2.5 million workers as a result of the pandemic, and one-in-six restaurants have shuttered. 

“Our industry runs on a 3-5 percent pre-tax profit margin in a good year – during a pandemic is not the time to impose a triple-digit increase in labor costs. Far too many restaurants will respond by laying off even more workers or closing their doors for good. As the pandemic has highlighted, the economic realities of each state are very different. A nationwide increase in the minimum wage will create insurmountable costs for many operators in states where restaurant jobs are most needed for recovery.

The National Restaurant Association’s complete statement can be found here.

Other organizations, including FEDA, have joined the National Restaurant Association‘s stance against raising the minimum wage. The National Federation of Independent Business (NFIB) is circulating a letter urging Sen. Bernie Sanders (I-VT), chair of the Senate Budget Committee, and Rep. Bobby Scott (D-VA), chair of the House Committee of Education and Labor to reconsider the proposal.

The letter explains how the proposed minimum wage hike would harm businesses, result in job losses, and reduce total real family income by $9 billion by 2025. “More than doubling the federal minimum wage while small businesses across America are barely surviving shutdowns due to an unprecedented pandemic is a recipe for more shuttered businesses and millions more job losses,” the letter stated.

The full letter is available here.