Several business groups are pushing back against Senator Bernie Sander’s “Raise the Wage Act” which would raise the federal minimum wage to $15 an hour by 2025.
The Raise the Wage Act, spearheaded by Bernie Sanders, this would raise the minimum wage to more than double the current rate, which is $7.25 an hour.
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The restaurant industry quickly pushed against the legislation, saying it creates an impossible challenge for restaurants, which have already been hit hard by the coronavirus pandemic.
“Far too many restaurants will respond by laying off even more workers or closing their doors for good. As the pandemic has highlighted, the economic realities of each state are very different,” said Sean Kennedy who is the National Restaurant Association executive vice president of public affairs.
Kennedy stated that, “A nationwide increase in the minimum wage will create insurmountable costs for many operators in states where restaurant jobs are most needed for recovery.”
The Employment Policies Institute, released a study on Tuesday that estimates that raising the federal minimum wage to $15 an hour would result in 2 million jobs lost.
The institute estimates the plan would cost employers more than $99 billion.
“This will probably be the most serious fight on the minimum wage since the mid to late 2000s when it went up the last time. I think the pressure on the left is probably as strong as it’s been in a long time to do something on this,” said Michael Saltsman.
The bill would also phase out the tipped minimum wage for restaurant service workers, a proposal President Biden has made.
The National Restaurant Association argues that eliminating the tip credit would cut the wages of restaurant workers.
“The elimination of the tip credit will cut the take-home wages of thousands of tipped employees who make far above the proposed minimum hourly wage. These skilled hospitality professionals generally earn between $19-25 dollars per hour and have made clear many times before that they support a tipped minimum wage,” Kennedy said.
TGI Fridays CEO Ray Blanchette told CNBC on Friday that eliminating the tipped minimum wage would result in fewer hours for waitstaff and higher menu prices.
Sources: The Guardian, CNBC, and Bloomberg; Photo: nationalreview.com