Catalyzed by efforts from leftists, including actresses Jane Fonda and Lily Tomlin, to raise the minimum wage but in the process eliminate the tip credit, some full-service restaurant workers have struck back, announcing the creation of Restaurant Workers of America (RWA), which is devoted to preserving restaurant servers' tip income.
The creation of RWA was triggered in 2017 when thousands of restaurant servers organized in Maine to restore the state's tip credit after it had been terminated as part of a minimum wage ballot measure. RWA is battling an organization called the Restaurant Opportunities Center, which wants to eliminate tipping.
AS RWA explains on their website:
Federal law and most states allow tipped workers to be paid a lower minimum wage, as long as they earn at least the full minimum wage when tips are included. (The difference between the tipped wage and the full minimum wage is called the "tip credit.") Service workers are guaranteed to earn at least the minimum wage per hour during any pay period; if tips plus the tipped wage does not equal at least the current minimum wage, then businesses are legally required to make up that amount. With the current model, most servers and bartenders make well above the minimum wage when their tips are included.
The capacity to utilize the tip credit permits owners to keep labor costs down, thus making it cheaper for people to eat out. A study released in April 2017, coauthored by professor Michael Luca of Harvard Business School and Dara Lee Luca of Mathematica Policy Research, found that for every dollar the minimum wage goes up, the chance of a median restaurant closing increases as much as 14%.
Joshua Chaisson, one of the founding members of RWA, noted that restaurant workers do better when the tip credit is left in place. “When organizations like ROC and its spokespeople advocate for 'One Fair Wage,' what it means is they want everyone working for the same wage: The minimum wage. … People who don’t work in the industry are attempting to speak for servers. Maybe they should start by speaking to us. Then they would understand that we like what we do, and we wouldn’t do it for minimum wage,” he wrote