By Carrie deKubber and Kerri Lonergan-Dreke / For The Herald
There are two initiatives on the November ballot to raise Everett’s minimum wage to $20.24 per hour. How are Everett voters who want to raise the minimum wage to decide between the two?
Here’s some helpful clarification. While both initiatives would raise Everett’s minimum wage to just five pennies under the highest citywide minimum wage in the nation, Initiative 24-01 will harm small businesses and our local economy; Initiative 24-02 will not.
Initiative 24-02 is the responsible way to raise the minimum wage for local workers, small businesses, and the Everett community.
We are local small business owners. We care about our team members. We pay their paychecks, and we support providing Everett workers with higher wages. We also care about our community, and we need to raise the wage in a way that will not negatively impact local residents.
Initiative 24-02 ensures all workers earn at least $20.24 an hour, while recognizing all forms of compensation; including tips and benefits.
Everett tipped employees are already making well above the minimum wage. A recent survey of Everett restaurants shows tipped employees earn an average of $15.94 per hour. In other words, tipped employees earn nearly as much as the state minimum wage (currently $16.28 per hour) in tips alone.
Under 24-02, these employees — who already earn nearly twice the state’s minimum wage — will continue to do so. No employee would earn less than $20.24 an hour. No employer would pay less than the state minimum wage. If an employee earns tips, that employer can count up to $3.96 per hour of those tips to meet the $20.24 wage. No employee is dependent upon tips to make the minimum wage. Every employee has certainty of their minimum compensation. If an employee does not earn tips, their employer pays the full $20.24 per hour.
This model has been used successfully in other Washington cities that have raised their local minimum wage and in progressive cities across the nation.
Why is this the best and most responsible and sustainable way to raise Everett’s minimum wage?
First, a $4 per hour wage increase for employees represents a 25 percent cost increase for local small businesses. If employers were to bear this cost burden themselves, it would very likely force many to raise prices, among other bad options.
Everett voters have no doubt noticed the increased cost of goods and services across our local economy, such as food, groceries, and child care. Adding large costs to local small businesses and non-profits will only accelerate this trend.
Second, tips are considered wages by the federal government; employees who receive tips pay taxes on them with the IRS and employers pay payroll taxes on these tips. It’s not unreasonable or unfair for a small portion of this tipped income to be factored into an employee’s overall compensation calculation.
Doing so doesn’t make employees reliant on tips; 24-02 neither requires employees to receive tips nor penalizes them if they don’t.
Third, increasing the minimum wage without the flexibility provided by 24-02 would harm restaurants in particular; and fundamentally alter the hospitality experience we aim to provide to our guests.
People love and rely on restaurants, but it’s never been harder to operate a restaurant in Washington. Recent industry data about Washington’s restaurants is sobering for anyone in the state for whom dining out is an essential part of their weekly meal plan.
After paying out all costs required to operate their business, your local restaurant owner takes home just 1.5 percent of revenues coming in. This is 60 percent lower than the national average, and the lowest we’ve seen at any point in history.
Nearly 40 percent of our costs are labor costs — which is 10 percent higher than the national average — even though we employ 20 percent fewer workers. A 25 percent increase on top of this would be unsustainable.
You favorite local restaurant can’t absorb this increase and would be left with few places to go to manage it. They could reduce their hours of operation or cut staff, but that means reduced paychecks for employees or fewer paychecks altogether.
They could increase menu prices, but Washington menu prices are already 12 percent higher than the national average; and higher menu prices hurts working families, who rely on restaurants an average of 6.3 meals per week.
They could move away from a tipping model and institute a service charge instead, but that would also dramatically cut the paychecks of employees who currently rely on tips as wages.
They could do all of the above. Speaking again from first-hand experience, restaurant operators don’t want to do any of the above.
The good news is, there’s another option. We can ensure that Everett workers receive a higher wage, without picking winners and losers.
Vote yes on 24-02 to support workers, local small businesses and non-profits, and the whole Everett community.
Carrie deKubber is the owner of Bob’s Burgers and Brew in Everett. Kerri Lonergan-Dreke is the co-owner of Lombardi’s Italian Restaurant & Wine Bar.
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