Question 4 has too many unintended consequences
To the editor:
In light of the fact that Question 4 on the Citizens Initiative to raise the minimum wage has been overshadowed by the passion many feel about Question 3 (the gun issue) I feel it necessary to explain our stance on Question 4.
We believe Question 4 has a lot of unintended consequences that will hurt our employees, a great many of our customers and ultimately our business along with the restaurant industry in Maine as a whole.
So before we get labeled as a greedy businesspeople let me say firstly that we agree that there should be a minimum wage increase. Currently none of our hourly non-tipped employees are making minimum wage so this component of the referendum will not impact us greatly. For full service restaurants the overwhelming concern is the component of the referendum that takes away tip credits.
Unfortunately deadlock in our state government has caused this situation to occur by not passing a reasonable minimum wage increase. While there is plenty of blame to go around we are now faced with this extreme measure which not only increases minimum wage, but eventually eliminates tip credits which we believe will eliminate tipping altogether.
This measure will incrementally move the minimum wage for tipped employees to the full minimum wage. The math shows us that by year five and six this would increase hourly wages by 200 percent. This changes our business model so drastically that we feel we would have to eliminate tipping so that our customers will be able to absorb the increase in menu prices. Menu prices will have to increase anywhere from 25-50 percent.
Right now the law allows us to pay tipped employees half of minimum wage which is $3.75 per hour. We pay taxes on that as well as on all the tips that they claim. Presently servers have the potential to make $20-plus per hour.
If you ask the vast majority of servers they will tell you that they would rather make half of minimum plus tips as opposed to $12 per hour. These servers presently take ownership by managing their tables in a manner that gives the customers the best possible service in order to maximize their income. Essentially it is like running their own business.
Another unintended consequence would be the decrease in the hiring of part-time high school and college students. We believe it will hurt their chances of getting some valuable work experience and the opportunity to make a few bucks while going to school. We believe grocery and fast food prices will have to rise as well. Larger corporations will find ways to automate and reduce minimum wage employees.
Also this measure eventually ties in future minimum wage increases to the CPI (Consumer Price Index). This is a government generated percentage based on the price of all goods and services produced. This failed in the early 1980’s because of the massive increase in fuel prices.
We have a lot of customers on fixed income who eat here and at other eating establishments sometimes as many as six times per week. This measure will not give them any more income and will make it difficult for them to handle these increases in menu prices.
In conclusion we feel this is a bad idea for our servers, our customers and ultimately our business. Please consider voting “No” and ask our legislators and Governor to go back to the drawing board and come up with something that works for everybody. Please don’t penalize the people you are trying help by passing this measure.
Tony and Sherry Sullivan
Governor’s Restaurant
