Eliminating Tipped Wage Would Reduce Opportunity for Workers of Color

The restaurant industry is one of our country’s greatest sources of upward mobility. While the pandemic forced many operators to hit pause in 2020, the industry will bounce back — as long as Congress does not enact a misguided minimum wage mandate that hurts the employees it is meant to help.

My company, Thompson Hospitality, is the nation’s largest minority-owned food and facilities management company. In our restaurants, we are not looking for job seekers with fancy degrees, or those who come from the “right” zip code. Rather, we want folks with the “heart, hustle, and guts” to join our team and show genuine hospitality to guests from all walks of life.

Servers and bartenders in particular have the opportunity to excel far beyond the minimum wage. Our servers are guaranteed to earn at least the prevailing minimum wage in the D.C.-area markets where we operate. Thanks to the tipping system, most of our service staff earn double or even triple that amount. Legislation in recent years that raised the minimum wage in Washington, D.C., Maryland and Virginia has wisely preserved the separate minimum wage for tipped workers, which enables their success — and ours.

A proposal in Congress, the Raise the Wage Act, would undo this progress. It would eliminate nationwide the tipped minimum wage, raising the base wage for tipped workers by as much as 600 percent. Restaurants couldn’t afford these tipped wage increases before the COVID-19 shutdowns. They certainly cannot afford them now.

It would force countless restaurants to automate positions, close down, or adopt counterproductive payment options that leave tipped workers with less money. This mandated “raise” could kill as many as 693,000 tipped jobs, according to the nonprofit Employment Policies Institute.

I am particularly concerned about lost opportunities for Black workers, for whom tipped work is an important ladder of opportunity.

Black restaurant workers have not always had access to higher-paying tipped jobs at the front of the restaurant. In one of the more prominent examples of this racism, the founder of Shoney’s restaurants, Ray Danner, developed a code to tell management when he felt there were too many Black employees at the front of the restaurant. He would visit restaurants and tell management the restaurant’s coffee was “too dark” and “needed to be lightened up.” He even had hiring managers darken the “o” in Shoney’s on job applications to signal that the potential hire was Black.

The company faced much-needed accountability for this legacy of racism, and eventually entered a $130 million settlement with the Black workers who were denied tipped jobs. My early industry experience as a franchisee came at Shoney’s restaurants, and I had a front-row seat for this reckoning. Importantly, it was the company founder at Shoney’s that was racist — not the tipping system. Indeed, workers of color actively sought these tipped jobs, which provided above minimum wage pay then, just as they do now.

Today, there are more opportunities than ever for workers of color: According to Census Bureau data, Black workers’ share of front-of-house tipped restaurant jobs has increased by roughly 57 percent over the last two decades. Now, Congress is pushing a bill that could eliminate these tipped jobs.

Thompson Hospitality is proud to have a staff filled with people of all backgrounds who earn above minimum wage income. My employees and others shouldn’t have these higher-paying jobs stripped of them by short-sighted lawmakers. Congress must oppose the elimination of the tip credit.

Warren Thompson is the president and chairman of Thompson Hospitality, based in Reston, Va.

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