Senator Bernie Sanders and Representative Bobby Scott are advocating for an increase to the federal minimum wage and the elimination of the nearly 60-year-old tip credit.
Restaurant owners argue that ultimately consumers will bear the cost elsewhere.
“If I have to pay $17 for my server, the menu is going to go up,” said Bud Sayso, the owner of Tuk Tuk Thai.
The discussion surrounding wage equality is once again reignited as lawmakers push for increasing the federal minimum wage to $17 over the next five years while phasing out the tip credit, which has legally allowed businesses to pay tipped employees $2.13 per hour since 1966.
Arizona is one of 28 states, plus Washington, D.C., with a minimum wage set above the federal standard. For Arizona, it’s $13.85 per hour and no less than $10.85 per hour for tipped employees.
“Right now they’re averaging about twenty bucks an hour,” Sayso said while showing logs of employee averages.
Sayso operates three Tuk Tuk Thai locations in Tucson, and he believes the elimination of the tip credit could be costly in the long-term.
“I can’t just absorb an extra six dollars plus change in cost per hour per employee, or I have to do with lesser. Instead of having three servers on, I would have two,” he said.
Saurabh Sareen has been in the restaurant business for 22 years. Like Sayso, the owner of Saffron Indian Bistro, he believes the increase in wages means making up for the cost elsewhere.
But with competition so high and workers not being afraid to leave one job for the next, rewarding loyalty may be the only way to keep turnover low.
“I want to keep my good workers because they’ve been loyal to me for so many years, so I don’t mind paying them extra.”
A 2021 poll from the National Employment Law Project found that 62 percent of Americans support a $15 minimum wage.
However, should this latest attempt at raising it succeed, consumers could find themselves paying for it in the form of things like higher-priced menu items.