The National Restaurant Association opposes the Raise the Wage Act of 2021 because it would hurt small and independent businesses, lead to dramatic job cuts, trigger higher consumer costs, hit an industry still reeling from COVID-19, and end tipping preferred by consumers and servers.
Overview: The restaurant industry needs time to recover, but at the same time, the National Restaurant Association and its members are ready to have a conversation about a balanced way to address wage levels in the foodservice industry and the unique impact any change would have on the economic recovery of its workers and restaurant operators. This bill hurts restaurants, communities, and consumers.
Our position: Small businesses cannot easily absorb a dramatic labor cost increase and higher wages would lead to employers cutting back on worker hours and/or eliminating positions. When labor costs climb, employers in labor-intensive industries like restaurants are forced to raise prices, thereby driving up consumer costs. The bill poses an impossible challenge for small and family-owned businesses that already operate on slim profit margins of 3-5%.
These economic consequences would slam restaurants at a time when the industry is already facing unprecedented revenue and job losses because of the COVID-19 pandemic. Currently:
- More than 2.5 million restaurant jobs have been lost;
- More than 110,000 restaurants are closed permanently or long-term
- Industry generated $240 billion less 2020 revenue than projected pre-COVID.