By Dan Murphy
One veteran neighborhood restauranteur, along with his staff who rely on tips for their livelihoods, are voicing their strong opposition against Question 5, which will appear on the Nov. 5 ballot for Massachusetts voters, saying that passing a law that would increase minimum wage for tipped workers would have an adverse effect on not only those working in the restaurant industry but also on the diners themselves.
“Full-service dining is really reliant on this arrangement where we pay a tipped wage and record the tips each person gets,” said Tom Kershaw, chairman of the Hampshire House Corporation, which includes the namesake business, as well as Cheers, 75 Chestnut, and 75 on Liberty Wharf.
If passed, Question 5 would raise the minimum wage for tipped employees incrementally over a period of five years from $6.75 an hour to the state’s regular minimum wage of $15 an hour by 2029. The creation of tip pools, whereby tips are shared with non-service employees who sometimes make less than the minimum wage, would also be allowed but not required via the passage of Question 5.
At Hampshire House, the establishments themselves already cover the difference to ensure that their workers meet the $15 an hour minimum-wage threshold.
“Everybody is on minimum wage now, and now, they want us to pay full minimum wage and not have tips,” said Kershaw.
Servers and bartenders at Kershaw’s establishments, he said, can make upwards of $40 or $50 an hour during peak times.
“You don’t get credit for tips, and that’s what people live on,” said Kershaw. “They couldn’t even live on minimum wage.”
Raising the minimum wage as proposed would put the burden on restaurants, said Kershaw, and dining establishments would in turn likely have to raise menu prices or even lay off some staff members to cover the new cost incurred. And if restaurants have to cut back on staffing, service will inevitably suffer, added Kershaw.
Moreover, a similar law recently passed in Washington, D.C., and the restaurant industry there has already begun to suffer, said Kershaw, with many establishments closing when they couldn’t cover their costs, or instead decamping for Maryland or Virginia, neither of which have laws on the books pertaining to tipped minimum wage.
Ryan Miller, Cheers Boston bar manager and bartender, underscored just how much those working in the restaurant industry depend on tips.
“It’s crucial,” he said. “I’ve been in the industry for over 18 years now, and I’ve seen how it’s evolved over time. I’ve seen how we rely on tipping.”
Miller added, “If this does pass, I don’t think people understand the consequences moving forward.”
For instance, a married couple might have a regular scheduled date night each Friday, when they patronize their favorite bartender at their favorite local establishment, said Miller. Over time, the couple has developed a great rapport with the bartender and tip them generously as a result.
But the prices of menu items suddenly begin to rise as the restaurant needs to cover the minimum-wage gap. The couple also begins to see a ‘whole house gratuity’ line item on their bill, said Miller, and they soon realize that their gratuity is no longer going directly to their favorite bartender but instead to the entire front- and back-of house staffs as a pool instead.
Since the couple no longer feeling that their gratuities are going directly to their favorite bartender, along with increased menu prices and this added gratuity line item, they might even lose their incentive to tip as generously as they have in the past.
And with the increase in menu prices, the couple will likely dine out (and therefore tip) less frequently, Miller predicts.
“People will lose their jobs because restaurants will be going over budget,” said Miller. “We’re already seeing this in other parts of the country [where similar laws have passed].”