Progressive liberals want to help out restaurant servers and raise the minimum wage they earn before tips. Restaurant servers need to beware, with friends like these folks, who needs enemies? [Emphasis mine]
In a study published in 2005 in Applied Economics Letters, John Anderson and Orn Bodvarsson from the University of Nebraska analyzed 1999 Bureau of Labor Statistics data and found no relationship between a boost in restaurant employees’ base wages and their take-home compensation. A larger study published last year by the Employment Policies Institute examined 20 years of Census Bureau data. Economists William Even (Miami University) and David Macpherson (Trinity University) found that each time the mandatory state wage for tipped employees rose by 10%, hours worked fell by 5%.
Messrs. Even and MacPherson have also analyzed Sen. Harkin’s bill, and they estimate that the combined loss of employee hours would translate to the equivalent of over 447,000 full-time tipped jobs.
Fewer hours at work and fewer employees on staff also means there’s less of a chance to earn tips. In Washington state, for instance, Seattle Weekly reported in December that many restaurants have stopped hiring bus boys and instead have servers bus their own tables. Managers assign five- or six-table sections instead of the traditional three or four. (Read More)
Ronald Reagan once joked “I’m from the government, and I’m here to help.” But he wasn’t kidding. Every time they try to solve our problems, they only make things worse.