To be honest, as important as the debate over the federal minimum wage is to the country and especially to the restaurant industry, I find it easy to ignore or forget about most days. It always seems to devolve into false equivalency. It’s only intriguing when somebody attempting a practical solution gets heard over the two sides of the shouting match.
That is why I was floored last month at the International Franchise Association’s annual convention in New Orleans, when IFA chair Steve Romaniello threw out a suggestion, almost in passing, to keynote speaker Leon Panetta that seemed like a start to find some middle ground: a tiered minimum wage, with one wage floor for younger workers and a higher wage floor for older workers.
Before I go any further, allow me to make some important disclaimers. I am not an economist. If I remember correctly, I got a B in macroeconomics and a C+ in microeconomics in college. Nor am I a restaurant operator, charged with keeping labor costs somewhere in the low-30-percent range in a famously low-margin industry.
I am, however, a journalist who takes seriously the responsibility of investigating the issues facing foodservice, so while I won’t declare a tiered minimum wage the answer to such a nuanced question, I would like to hear more people talk about it.
I had never heard anybody mention the idea of a tiered minimum wage before Romaniello did at the IFA convention — it certainly has not come from statements from lawmakers, lobbyists or protesters. But a few weeks later, Culver’s founder and chief executive Craig Culver brought it up in a separate interview. The youth wage might stay around the current federal level of $7.25 per hour; perhaps an adult wage could be closer to the $10.10 per hour suggested by the Obama administration and Democratic lawmakers, he said.
“We have a responsibility to create careers for people in this industry,” Culver told me, “so how can we have people stay with us to become managers, or the president of the company, or franchisees owning their own restaurants?”
It’s a more worthwhile argument than the one that seems to play out most days. On one side, protesters aligned with groups like Fast Food Forward or the Restaurant Opportunities Center are pushing for a $15 minimum wage. That can’t be accomplished overnight, or maybe not at all.
Restaurateurs and their trade associations push back with valid arguments that higher mandated wages likely would beget menu price increases and less hiring.
What I find less convincing is the rhetoric around who works in restaurants for the minimum wage. A position statement from the National Restaurant Association reads: “Young people across the country look to restaurants for their first jobs. A mandatory wage increase could further restrict opportunities for young and less-skilled individuals.”
Possibly. But take a look at the crowds protesting for a higher minimum wage. Many of those quick-service workers are not teenagers looking for pocket money; they’re in their late 20s, 30s and 40s, working to support themselves and their families.
It is not the fault of Walmart,or any other giant employer that the federal minimum wage has not kept pace with the rising standard of living and inflation in the United States, nor are they to blame for a decline in manufacturing or other industries that typically paid wages considered to be middle-class. But to say $7.25 per hour should not change because the majority of quick-service crew members are teens — “Won’t somebody, please, think of the children?” — is disingenuous.
So perhaps a tiered minimum wage should get another look from the people in charge of speaking for the restaurant industry when policy gets made in Washington or at the state level. I don’t have the authority to claim it’s the perfect compromise — I also failed statistics in college — but it still is worth considering.
The down-line effects would be complicated as well, which is all the more reason for debate. Would a tiered wage lead brands to shift their hiring away from older workers toward younger, less expensive staff, making it harder to groom future managers? Would higher wages per hour make it easier for crew members to afford mandated health insurance in exchanges set up under the Affordable Care Act, especially if restaurants continue to schedule them with part-time hours so as not to cover their premiums?
It’s tough to say, but I find it far more interesting, and I think the industry would be far better served, if everyone started thinking about those nuanced questions more than the oversimplified debate we’ve been getting.