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One Fair Wage a Bounty for Some, but Workers Missing Out on the Spoils

With the upcoming legislative session months away, the Labor Committee is proactively championing a cause that can potentially lead to big payouts to big labor and an advocacy group, potentially at the expense of workers.  

Sen. Julie Kushner (D-Danbury), serving as the co-chair of the Labor Committee and former United Auto Workers (UAW) Regional Director, is collaborating with leftist group One Fair Wage. Together with union leaders and elected officials from Chicago, they held a press conference in Hartford on Tuesday (Dec. 5) to outline her commitment to advance a bill aimed at eliminating the sub-minimum wage for tipped workers. 

The proposed legislation, which failed to secure a vote in either the House or Senate during the 2023 legislative session, seeks to integrate tipped workers — including bartenders and wait staff — into the state’s minimum wage structure. The current minimum wage of $15 an hour is slated to increase to $15.69 an hour in January. 

Currently, seven states have eliminated the sub-minimum wage including Alaska, California, Minnesota, Montana, Nevada, Oregon and Washington. Additionally, both Washington, D.C., and Chicago have embraced this policy.  

Saru Jayaraman, the president of One Fair Wage, stated during the press conference that it has been a year since Washington, D.C., voted to integrate tipped workers in the minimum wage framework. Jayaraman cited a report from her organization stating, “Restaurant growth is 10 percent higher since it passed,and asserted that there is a “7 percent increase in restaurant jobs and tips are higher.” 

Yet Jayaraman and her organization have recently faced criticism following accusations from Ryan O’Leary — a former employee — who labeled the organization as a “sham and a fraud.” O’Leary claimed that the organization advocated for placing the measure on the 2022 ballot in Washington, D.C., but failed to provide support to local organizers during the campaign. 

“One Fair Wage did one thing: they secured a donation to fund the petition process,” O’Leary said. However, he did not disclose the specific amount of the donation or clarify whether the entirety of the funds was used for the petition drive.  

Furthermore, O’Leary raised concerns about potential Federal Election Commission (FEC) issues related to the organization’s 501(c)(4) status. 

One Fair Wage is also facing allegations of providing deceptive information to Maryland lawmakers through falsified data. The organization told lawmakers that their research showed that over 60 restaurants in the state pay their servers $15 an hour.  

However, when the public policy non-profit Employment Policies Institute (EPI) reached out to 21 of the listed restaurants, one was permanently closed, and 14 explicitly stated that they do not pay a base wage of $15 an hour. In fact, the majority of these establishments reported paying their workers a tipped wage of $4 an hour. 

Of the five restaurants on the list that confirmed paying a base wage of $15, two have either eliminated tipping or introduced service charges. 

Jayaraman also failed to mention that Maine which had abolished tipped wages and initially planned to mandate restaurants to pay the minimum wage after 2020 — eventually reversed this decision in 2017. Servers and bartenders expressed to lawmakers during a public hearing that they were earning significantly more in tips than what they were promised by getting paid the minimum wage, attributing it to customers tipping less. 

Meanwhile, representatives from the Chicago city council, having recently adopted the measure in October but not yet fully implemented, were present at the press conference. However, representatives from Washington, D.C., where the policy was adopted almost a year ago, were absent, unable to provide insights on its implementation. 

Perhaps the lack of transparency is the reluctance to show that the situation in D.C. is not as positive as portrayed by One Fair Wage and Kushner. Restaurants have started imposing service charges of up to 20% on diners’ bills, intended to offset the rise in hourly wages. These charges are not always passed along to servers and are being used to cover various restaurant expenses, leading to confusion among diners about how much to tip. Consequently, some servers find themselves earning less than they did under the previous sub-minimum wage system. 

According to a survey of 944 D.C. area residents by the National Restaurant Association — an opponent of the measure — 52% answered that they chose to dine at home more frequently due to the increase in cost of eating out. 

Ed Hawthorne, the President of the Connecticut AFL-CIO, was also in attendance to lend his support to the proposed change, pointing out that tip workers currently receive $6.38 an hour. In what some might call virtue signaling, Hawthorne proudly underscored his union’s decade-long effort to eliminate the sub-minimum wage.  

“Back in 2009 when a compromise was raised for the minimum wage to go up to $15 an hour it meant not raising the sub-minimum wage,” Hawthorne said. “We made a promise back then we promised that we would come back every year to fight to eliminate the sub-minimum wage.” 

It’s worth noting that according to the Bureau of Labor Statistics, only 1.4 percent of workers in the “food service and drinking places” industry were union members in 2022. This raises questions about why the AFL-CIO is investing significant time and resources in advocating for this change. More importantly, what motivates their support, and what do they stand to gain? 

The AFL-CIO has a track record of expressing contempt when it comes to representing government employees who left the union. These individuals are no longer obliged to pay agency fees but still receive representation as a result of the Supreme Court Decision Janus v. AFSCME. 

The union even went as far as inventing a conspiracy theory by attributing the court’s ruling to “the dark web of corporations and billionaires,” wanting to prevent public-sector unions from collecting fair share fees from non-union workers they represent. Put another way, it seems the union is not in favor of representing those who are not part of their collective without being compensated. 

Seizing the momentum generated by Starbucks’ recent unionization, the AFL-CIO is strategically positioning itself for a substantial financial gain. Their tactic involves encouraging tipped workers to join the union by exaggerating their role in the new pay structure and suggesting that reciprocating this effort involves joining the union and contributing through the payment of union dues. 

As lawmakers come back into session on February 7th, they will have to decide if they are in favor of prioritizing a financial windfall for the AFL-CIO and One Fair Wage, potentially at the expense of workers missing out on promised benefits. The contrast between the positive benefits touted by these groups and the practical implications on workers’ earnings raises concerns about the true motives behind the proposed change.  

This week on Yankee’s podcast Y CT Matters

How has the Israel-Hamas war impacted free speech at Yale University and on other college campuses? Lauren Noble, executive director and founder of the Buckley Institute at Yale, shares insights on the impact of increased antisemitism.

In September, the Buckley Institute released its ninth annual National College Student Survey. As Noble explains, for the first time in the history of the poll, more students support shout downs (46%) than oppose them (45%). Also for the first time in the poll’s history, an outright majority (51%) of college students support speech codes on campus, a change from last year when a plurality opposed speech codes (a 16-point shift in net favor-oppose). Read the full study here Learn more about the Buckley Institute here, and follow its new podcast “Pod and Man at Yale,” here.

Click HERE to listen

Meghan Portfolio

Meghan worked in the private sector for two decades in various roles in management, sales, and project management. She was an intern on a presidential campaign and field organizer in a governor’s race. Meghan, a Connecticut native, joined Yankee Institute in 2019 as the Development Manager. After two years with Yankee, she has moved into the policy space as Yankee’s Manager of Research and Analysis. When she isn’t keeping up with local and current news, she enjoys running–having completed seven marathons–and reading her way through Modern Library’s 100 Best Novels.

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