I’d like to start an educational discussion focused on improving Charlottesville and Central Virginia. Improving Charlottesville is our entire mission at I Love CVille. So, here goes:
Am I the only person who thinks it is a contradiction when the Virginia House Of Delegates says it is prioritizing equity among citizens, affordable housing and narrowing the wealth gap yet this same group is considering raising the restaurant minimum wage to $15 per hour and the tipped employee wage to $5-$7 per hour?
Raising the restaurant minimum wage and the tipped employee wage will do THE OPPOSITE of making Charlottesville, Central Virginia and the Commonwealth more affordable and more equitable.
Here’s why:
(1). Increasing the restaurant and tip wages will negatively impact our most impoverished citizens and also our locally-owned restaurants (i.e. small business owners) first. If these wages increase, menu prices will significantly increase across the board. That means it will cost more money to patronize these restaurants, especially the restaurants that are owned by small business owners who do not have the economies of scale of chain/corporate restaurants.
As a result, locally-owned restaurants will be more expensive, less approachable and will lose market share to chain/corporate restaurants.
(2). We are not even three years removed from August 12, 2017. We should make Charlottesville, Albemarle County and Central Virginia more approachable and welcoming to people of all races and socioeconomic levels. When you increase the cost of enjoying restaurants, you are creating a financial barrier of entry and a financial barrier of enjoying the opportunities present in localities.
(3). In a recent survey, 44% of African Americans, Latinos and people of color said they did not feel welcomed on The Downtown Mall. If the Virginia House Of Delegates increases the restaurant and tip wages, this will undoubtedly make the restaurants on the Charlottesville Downtown Mall less welcoming. As we know, the restaurant scene is one of the primary attractions for citizens in the Charlottesville, Albemarle County and Central Virginia communities. Let’s keep restaurants as financially welcoming as possible so as many people can enjoy them as possible.
(4). Increasing the restaurant and tip wages will further transform our 10.27-mile city into an epicenter of wealthy individuals who can afford to live here.
(5). When The Virginia House Of Delegates discusses increasing the restaurant minimum wage to $15 per hour and the tipped employee wage to $5-$7 per hour, the local media will cover these discussions. As a result, these discussions generate front-page stories, 60-second sound bytes on TV newscasts and topic points for talk radio. This media attention creates an impression that restaurants are more expensive, which will keep our citizens from patronizing these establishments. Perception is reality, unfortunately.
(6). Please remember: Restaurants go hand-and-hand with so many other categories of business. Customers often combine a shopping and spending experience with a breakfast, lunch or dinner experience. As a result, if you increase the barrier of entry at restaurants, you will most certainly see a negative trickle over impact with lodging (i.e. hotels, Bed & Breakfasts, AirBnB’s,, etc.), retail, breweries, wineries and vineyards, live music, music venues, sporting events and tourism.
Please note: The business categories listed in No. 6 represent a considerable amount of our local tax base. This tax base is allocated to improving schools, roads, our community and leveraged to keep our real estate tax increases in check. Think about it, please.
(7). Forcing our locally-owned restaurant owners to increase wages will cause these entrepreneurs to terminate average and below average employees and then ask their above average employees “who make the cut” to do more work to cover for the loss of personnel.
To further reinforce why the Virginia House Of Delegates should not pass an increased restaurant minimum wage to $15 per hour and an increased tipped employee wage to $5-$7 per hour (Bills: HB 550 and HB 395), please consider these perspectives shared from lifelong restaurant veterans Ted Norris of Maya Restaurant and Wilson Richey of The Whiskey Jar, Revolutionary Soup and Ten Course Hospitality.
Ted Norris: “In localities where the tip credit has been eliminated, restaurants have experienced a number of severe consequences: A recent Harvard study identified a 14 percent increase in restaurant closures in San Francisco following each $1 increase in the base wage for servers. After New York raised its tipped minimum wage by 50 percent overnight, at the end of 2015, the state saw over 270 restaurants close.
Employment Policies Institute managing director, Michael Saltsman, released the following statement:
‘Eliminating the tip credit is a solution in search of a problem. Tipped employees are guaranteed to earn at least minimum wage, and most of them earn far more than that. Voters and policymakers should proceed with caution before promoting a 240 percent hike in restaurant labor costs—which would cost the state’s restaurant industry thousands of job opportunities.'”
Wilson Richey: “This move will kill small mom and pop businesses because those places will have to raise their prices and un-incentivize their best employees by creating tip pools to cover costs.
Those of you who know me know that I have been involved with a lot of restaurant operations. NO ONE I KNOW IS GETTING RICH DOING THIS!
These government enforced pay hikes will be passed on to the customers further alienating quality restaurants that endeavor to serve healthier, better sourced foods from people of lower income. It will ruin small family businesses and cause thousands who have made a career in the restaurant industry to have no future. This is an attack on small entrepreneurs and is clearing the way for big corporate restaurants to be the only restaurant options available.
Maybe it is the self determinist in me, but a system where an employee can determine their own take home pay by the quality of their independent effort is a system that I think works. My best servers and bar staff make way more then I do from my restaurants. Guaranteeing the same wage for them as the guy who takes six smoke breaks, is always on his cell phone and calls out sick four times a month is the dumbing down of society.”
In conclusion, I respectfully ask The Virginia House Of Delegates, including Delegate Sally Hudson, Delegate Rob Bell and Delegate Chris Runion, to have the courage, vision and understanding to oppose HB 550 and HB 395 in Richmond. The future of locally-owned restaurants in Charlottesville, Albemarle County and The Commonwealth depend on it.
Please let me know your thoughts. Please “like” and “share” this post if you think others should read it.
If you liked this article, you might also enjoy UVa Professor Sally Hudson, A Candidate For The 57th District, Joined Jerry Miller On The I Love CVille Show!, How Will 7,000 – 9,000 New Employees Impact Charlottesville’s Economy, Workforce & Neighborhoods? and Can Allan Cadgene’s West Main Street Parking Lot Help Solve Charlottesville’s Affordable Housing Crisis??
CEO Jerry Miller
