Brittany Jones, a 35-year-old who works as a server at Uccello’s Restorante in Caledonia, is dreading February, when the state is scheduled to transition to higher wages for tipped workers.
As it is now, the single mother earns as much as $37 an hour with tips, more than enough to support her two children, but expects the change forced by the Michigan Supreme Court in a 4-3 ruling last month will likely slash her earnings in half as Uccello’s raises prices to cover the increased labor costs.
“I will have to find another job,” Jones told MLive. “There’s no way I will survive and take care of my kids on that wage.”
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The roughly 125,000 tipped workers in Michigan’s hospitality industry who currently make $3.93 per hour plus tips will begin earning $6 per hour in February. The $6 would gradually increase over the next few years before it’s phased out entirely in 2029, when it would match the minimum wage of about $15 per hour.
The planned minimum wage hikes would translate into a 45% increase over four years, seriously impacting most employers, while the transition for tipped workers “will be catastrophic,” according to Justin Winslow, CEO of the Michigan Restaurant and Lodging Association told WXMI.
“One in five full-service restaurants, according to this survey, said they will just close their doors forever,” he said. “They’re barely profitable, if they are at all profitable right now.”
A MRLA survey of more than 200 Michigan restaurants found the state is set to lose between 40,000 and 60,000 restaurant jobs as a result of the July Supreme Court ruling, which also requires employers to offer paid sick leave. The same survey found 92% will hike menu prices an average of 25%.
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The ruling stemmed from 2018 ballot initiatives that were adopted and amended by the Michigan legislature. Lawmakers reduced the proposed minimum wage increase, and omitted tipped workers and paid sick leave, to minimize the economic impacts of the proposals before approving the measures the same year.
Legal challenges brought to the Supreme Court resulted in justices voting 4-3 to require the state to implement the initiatives as intended, though the ruling made clear “the Legislature may act to amend” the law “at any time.”
Democrats who gained a government trifecta in 2022 for the first time in 40 years have not signaled whether they intend to do that, despite the MRLA, business owners, servers, bartenders and Republican lawmakers warning of serious consequences if they don’t.
Jones was among more than four dozen who turned out to discuss the issue at the Sundance Bar & Grill in Grand Rapids last week for an event hosted by the MLRA and aligned group Save Mi Tips, MLive reports.
MRLA Vice President of Government Affairs John McNamara told attendees the groups want lawmakers to keep the tipped minimum wage at 38% of the regular minimum wage, and they’re urging supporters to attend a rally at the Capitol next month to voice their concerns.
“We would want this done by the end of this year,” McNamara said. “This industry needs some clarity. They need to know that these jobs are going to be there. They’ve got to plan for that. But also, you have business owners who are choosing not to make investments in their businesses, choosing not to grow their businesses.”
So far, it’s been “radio silence” from Democrats including Gov. Gretchen Whitmer and House and Senate leaders, who contend their legal teams are studying the ruling as they meet with stakeholders. Democrats adjourned for summer break weeks ago and aren’t expected back to Lansing until mid-September.
State Rep. Luke Meerman, R-Coopersville, told those attending Thursday’s event that rallying thousands at the Capitol to greet lawmakers when they return could help motivate Democrats to take action.
“If you can get 3,000 of your colleagues to Lansing September 18 it will make a difference,” he said. “Write those personal emails. Push the staff … it is worth it because of what we’re facing. Your voice can be the loudest voice in the room.”
In the meantime, folks who have the most to lose are already speaking out.
“I think once everyone learns that we’re all on minimum wage, I don’t think they’ll tip the 20% anymore,” Tami Jo Schultz, a waitress at Hof Bar and Grill in Free Soil, told MLive. “I think it will be more like 5%, maybe 10%, if that.”
“We’re in a rural area where people are just blue collar people, so now they might not eat out as much because of the costs of the menu,” said Schultz, who has worked in the industry for three decades. “For us in our area – we may be different from city ones – all the rest of your small mom-and-pops are going to have that same exact concern.
“Their livelihood is their regulars. They’re the ones that keep them going all year round, so the regulars that come in three times a week may now only come in once a week instead.”
Emma Caperton, a former server who now works for the 4GR8Food Group that owns multiple West Michigan restaurants, told the news site her friends still working as servers are already seeing the impact from the Supreme Court ruling.
“Just with the information about servers becoming hourly workers, they’ve already seen a dip in their tips because people are under the impression that they’re already being switched to minimum wage,” Caperton said. “They have already had a few people write on their bills ‘Good luck with hourly’ or whatever. That’s already seeming to affect my friends in their workplace.”