Restaurant Group Warns Congress About Minimum Wage

A mandatory hike would increase unemployment and restaurant closings, the association says.

February 18, 2021

WASHINGTON—The National Restaurant Association is urging Congress not to increase the federal minimum wage, claiming that restaurants would suffer from a fast-tracked wage boost as they continue struggling with problems caused by the pandemic. The association wrote a letter to congressional leadership this week, arguing that raising the federal minimum wage would result in job losses, boost menu prices and force more restaurants to close. 

Senate Democrats are debating whether to keep a minimum wage increase in President Biden’s COVID-19 relief package. The provision would increase the minimum wage from $7.25, where it has stood since 2009, to $15 an hour by 2025.

“Passage of this bill this year would lead to job losses and higher use of labor-reducing equipment and technology,” said Sean Kennedy, executive vice president for public affairs, National Restaurant Association. “Nearly all restaurant operators say they will increase menu prices. But what is clear is that raising prices for consumers will not be enough for restaurants to absorb higher labor costs.” 

The Raise the Wage Act also would also phase out the tipped minimum wage for restaurant service workers. “Eliminating the tip credit will hurt millions of servers who rely on the current system where they earn between $19-$25 an hour with tips,” the letter said. 

According to a National Restaurant Association survey, 82% of 2,000 restaurant operators say the initial wage increase would negatively impact the ability of the business to recover from the pandemic. The survey also found that 98% of restaurant operations said raising the wage and eliminating the tip credit would result in increased menu prices.