Business Coalition Defeats Increase to Tipped Minimum Wage

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Local and out-of-state business interests spent big to defeat a ballot measure that would have raised the wages employers paid to tipped workers from $6.75 an hour to the current state minimum wage of $15 an hour.

By late Tuesday night, it was apparent that those efforts succeeded: Massachusetts voters came out against the proposed wage hike by a margin of nearly 2:1.

When Buzzfeed News analyzed 20 years of federal data from the Equal Employment Opportunity Commission in 2017, the news outlet found that one industry in particular had a higher rate of sexual harassment claims than any other: the service and sales industries, which include restaurant workers. Other studies have also come to a similar conclusion. A 2021 article published in the Journal of Applied Psychology, for example, found a link between work that requires employees to depend on tips — “service with a smile” — and an increase in those employees’ risk of being sexually harassed.

That’s not surprising news to local barista Hannah Ku, who works at Catalpa Coffee in Northampton and said that racial and sexual harassment are too often part of the job for workers in the industry — particularly those who rely on tips.

“I have to continuously put myself in those positions to open up more to customers in order to get a better wage, essentially,” Ku said at a One Fair Wage event last week at The Quarters bar and arcade. “I don’t want to have to do that to be able to earn money.”

Ku was speaking at an event in support of “Question 5” — a ballot initiative that would have, over five years, incrementally raised the wages employers paid to tipped workers from $6.75 an hour to the current state minimum wage of $15 an hour. The national workers’ rights organization One Fair Wage brought the question to the Massachusetts ballot after advocating for similar legislation in states including Michigan, Ohio, New York, and Connecticut. 

But those efforts failed on Tuesday as voters rejected the ballot question in a landslide following a big-money campaign from restaurant, hotel, and other retail interests. 

The “no” campaign, known as the Committee to Protect Tips, raised nearly $3 million in campaign donations and in-kind contributions to defeat the initiative, outraising the One Fair Wage Plus Tips “yes” campaign’s $1.9 million. The industry group Massachusetts Restaurants United declared victory shortly after 10 p.m.

“Tipped workers and the independent restaurant community have triumphed,” the group’s treasurer, Newburyport restaurant owner Nancy Caswell, said in a statement. “We keep the power in the hands of individual servers and bartenders who work tirelessly day after day to service guests across the Commonwealth to the best of their abilities. And they will continue to be directly compensated for their good work because of this ballot question not passing.”

One Fair Wage had not released a statement by Wednesday morning.

For many restaurant workers, Question 5 represented an opportunity to get employers to pay them a fair wage. That’s how Erica Stockton felt about her time working as a server in Connecticut, where One Fair Wage has tried to pass a bill to raise the tipped minimum wage from its current rate of $6.38 an hour.

“My employer told me it would be taking away tips and replacing them with a minimum wage, and that he would not be able to afford to pay us what we were making through tips,” Stockton said at The Quarters last week. That, however, is a misconception, she said. “In reality, what it would be doing would be having the employer pay us our wages for our time as opposed to using the tips to subsidize for our wages.” 

Research from the Political Economy Research Institute and the Labor Center at the University of Massachusetts Amherst found that eliminating the subminimum wage for tipped workers could decrease wage theft. The researchers found that tipped workers, who are disproportionately women and people of color, “have incurred a disproportionate share of workplace violation complaints related to wage theft.” For tipped workers, wage theft can occur when employers don’t pay the difference when workers end up making below minimum wage even after tips. 

The report also concluded that tipped workers tend to earn more in states with no subminimum wage and that business costs associated with Question 5 would only be “modest.” 

“It is therefore unlikely to reduce employment or produce large price increases,” the report found.

However, some workers in the service industry still felt that an increased minimum wage would jeopardize their current income. That included Cushman Market barista Lindsey Schreiner, who told The Shoestring ahead of Election Day that she would be voting “no” on Question 5.

“I’m worried about … making way less money, being confused about exactly all that [Question 5] entails, and I just don’t think we’re ready for that yet,” she said. 

Schreiner also expressed concerns that some businesses wouldn’t be able to afford to pay their own workers $15 an hour despite the five-year implementation period for the wage increase. One component of the initiative that she did support, though, was addressing the risks of wage theft. 

Echoing a similar sentiment, Roxanne Abarca, a server at the Silver Spoon Restaurant in Easthampton, had been telling people to vote “no” because she thought that customers would tip less and, on a busy day, she would end up making significantly less money.

Opposition to Question 5 came largely from the restaurant and retail industry, who poured over $2.9 million into the “no” campaign, according to state campaign finance records. 

In particular, the Massachusetts Restaurant Association spent more than $686,000 to defeat the question and the National Restaurant Association spent $300,000. The Wine & Spirit Wholesalers of Massachusetts and the Retailers Association of Massachusetts each spent $100,000 and the Beer Distributors of Massachusetts dropped $50,000.

There were plenty of out-of-state industry giants that worked to defeat Question 5, too. They include the Darden Corporation — the restaurant company that owns Olive Garden, LongHorn Steakhouse, and Ruth’s Chris Steak House, among others — which spent $500,000. Three other big business interests spent $120,000 collectively: Brinker International, which owns the restaurants Chili’s and Maggiano’s Little Italy; Apple American Group, the largest franchisee of Applebee’s restaurants; and the casino-and-hotel behemoth Wynn Resorts.

Locally, the biggest donors to the “no” camp were Cal’s Wood Fired Grill in West Springfield and the Springfield-based Bean Restaurant Group, which each gave $2,000. In Northampton, Fitzwilly’s Restaurant gave $500 and Bluebonnet Diner gave $1,000. Antonios Pizza of Belchertown has given $1,000, and so did Mick Corduff, who owns the Log Cabin and Delaney House in Holyoke. Hadley’s Alinas Ristorante gave $500.

Other local opponents of the ballot question included Northampton Mayor Gina-Louise Sciarra, Easthampton Mayor Nicola LaChapelle, state Sen. John Velis, D-Westfield, and the Greater Northampton Chamber of Commerce. Some businesses like Hotel Northampton flew banners opposing the question.

The “yes” campaign, meanwhile, has largely been financed by One Fair Wage, which works to pass similar ballot questions and legislation nationwide. Of the more than $1.4 million that the “yes” campaign raised, nearly all of it came in the form of donations and in-kind contributions from One Fair Wage.

Local labor groups campaigned in support of Question 5, including the Western Mass Area Labor Federation.

Though the “yes” campaign’s efforts fell short on Tuesday, several longtime members of the local restaurant scene said that efforts like the ballot question represent slow but inevitable changes in the industry anyway.

Dan Beretsky is a 30-year veteran of the restaurant industry, currently working in the front of house at three local restaurants, including The Gill Tavern. He voted “yes” on Question 5. 

“I think there is this thing in the restaurant industry where your economic well-being is relying on the largesse of your customers, which is very unreliable,” Beretsky said. “I think this measure does start moving towards the stability of being able to make a living wage in a restaurant … To me, this just seems like an incremental change overall.”

Jill Fishman, the owner of the Dreamhouse Restaurant in Turners Falls, where all staff members make $27 an hour with the use of an automatic 20% gratuity — and no further tipping allowed — also had been a strong proponent of the ballot question. 

“It is 100% the direction that the industry is moving in and if it is not now, it is going to be at a certain point,” Fishman told The Shoestring.

Additional reporting contributed by The Shoestring investigative editor Dusty Christensen.

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