Most Americans agree that the minimum wage should be increased to $15, a change that would impact millions of restaurant workers. While a significant percentage of small business owners denounce the change, concerned they will go out of business due to increased costs of operations, and others describe it as a potential “job killer” in lower-wage regions, researchers argue that a $15 minimum wage has broad public bipartisan support and could support small businesses. Even McDonald’s announced in 2019 that it would no longer “use our resources, including lobbyists or staff, to oppose minimum wage increases at the federal, state, or local levels, nor will we participate in association advocacy efforts designed expressly to defeat wage increases.”
Brookings researchers Xavier de Souza Briggs and Russel Jackson describe the pandemic-era restaurant industry as a “microcosm of the American economy,” arguing that the industry will not survive without dramatic change, including adjustment to wages. They highlight the comprehensive research showing that increasing minimum wage supports the U.S. economy and describe it as essential to recovering from a COVID-19 related recession.
In a 2021 survey conducted by Restaurant Business Magazine, 30% of operators surveyed already pay $15 or more an hour, with 20% saying they could not continue operations with that labor cost. Of the 20%, 12% indicated that they would “immediately consider closing” if the $15 minimum wage was passed and enforced. Respondents were concerned about the need to raise wages across the board beyond those employees making minimum wage and the need to increase menu prices, which could potentially deter consumers.
Most recently re-introduced by Bobby Scott (D-VA) in January 2021, the Raise the Wage Act would gradually increase the federal minimum wage to $15 in 2025. The federal minimum wage has been $7.25 since 2009.
The act would also initiate automatic increases of the minimum wage in relation to median wages, a long-term focused practice called “indexing” that would keep wages growing. The final component of the act is the gradual elimination of subminimum wages for disabled, youth, and tipped workers.
Many states and individual corporations have already committed to raising wages to $15. States include Florida, California, Illinois, New York, Maryland, New Jersey, Delaware, and Rhode Island. Corporations include Chipotle, &Pizza, Darden, McDonald’s, and Starbucks.