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Restaurant owners concerned about relief package language

Published: Feb. 18, 2021 at 5:08 PM EST
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SOUTH BEND, Ind. (WNDU) - Some restaurant owners who are struggling to survive the pandemic, see even more potential trouble ahead.

Ironically, they fear the next COVID relief package being crafted in Congress could pose the next threat to their existence.

If servers who make about $2.13 an hour plus tips at places like the Rocky River Café went to work for a new $15 federal minimum wage—would that be a good thing? Or a bad thing?

“We came up with our servers (with tips) making well north of $20 ($27) an hour, servers and bartenders,” said Kurt Janowsky with Navarre Hospitality Group. “Eliminating the tip credit and going to a say $15 minimum wage with no tip credit would hurt our servers and bartenders.”

“We’re slowly pulling out of this crazy morass and things look good down the road, but this just is a huge roadblock,” added LaSalle Grill owner Mark McDonnell.

Today, restaurant competitors became comrades. Some of the area’s largest restaurant operators joined forced to speak as one. In a morning meeting, they told U.S. Senator Mike Braun, (D) Indiana, that they jointly oppose minimum and subminimum wage language that is now part of President Biden’s COVID relief package.

“Harry Anderson today said that their value menu meal would be $14 at Burger King with a $15 minimum wage. I don’t know about (that), but it would have to find its way on menu prices. You’d see many prices go up 15 or 20 percent and that’s not something anybody wants,” Kurt Janowsky added. “I think fast food would be really hit hard on the minimum wage part. Fine dining would be really hit hard on the tip credit part. People would tend to dine more in the middle.”

Janowsky estimates that the minimum wage would cost him about $200,000 a year while the phase out of the subminimum wage for tipped worders would cost him $1.3 million.

“Our response would have to be to raise menu prices significantly because of the increased costs, and then people, if they know that their server is making $15 an hour are likely not going to tip on a menu item that now costs 20 percent more. They’re going to feel, rightly so, that the tip’s included.”

Senator Braun told the restaurant industry reps that they were preaching to the choir and that he was in full support of their position. “I think the tipped wage is going to be a slam dunk to get out of there, and I think the minimum wage will be a much longer discussion, trying to shove through a $1.9 trillion COVID package.

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