With additional reporting by Kayla Threlkeld (CSULB Senior Seminar)
Photo courtesy of U.S. Dept. of Agriculture
It’s common after dining out to wonder how much to leave as a tip for your server. Given the low wages for many in the restaurant industry, the amount could determine whether your server affords rent that month.
Which is why many are anxiously anticipating a decision by the Long Beach City Council over whether to approve a raise in the city’s minimum wage to $15 per hour.
Roberto Ramirez is ecstatic about the possible hike. The 54-year-old migrant from Mexico has spent 17 years working kitchens in Long Beach restaurants. His last gig paid $9.50 an hour.
“The salary is very little,” Ramirez said in Spanish. “Not enough to pay bills, rent, to pay anything.”
Ramirez said he could not afford to buy a car or even ride the bus to work. And because none of his several employers offered full time work, Ramirez said he goes without health insurance and other benefits given to full time employees. He even took another job at a factory to cover costs.
“I worked one place and had to hurry to another factory … that’s how hard it is to make a little more money,” Ramirez said.
The median hourly wage for restaurant workers in the Los Angeles-Long Beach-Santa Ana region was $11.12 in 2014, according to the Bureau of Labor and Statistics. A living wage for a family of four in Long Beach would come to $16.21, according to the Living Wage Calculator website based at MIT.
The restaurant industry is expected to be among those most affected by a salary hike. About half of Long Beach’s accommodation and food service industry workers may see changes in their pay by 2020, according to a city-commissioned study performed by the Los Angeles County Economic Development Corporation (LAEDC).
But while many low-income workers in Long Beach are counting on a wage increase, small business owners say a raise in the minimum wage will lead to higher costs and fewer jobs.
“It’s crazy, it’s a stupid idea,” said Alex Kim, owner of Pop’s Burgers in Long Beach. “A $3 burger will turn into $20. I don’t like it.”
Kim has worked 12-hour days almost every day since he first opened his store eight years ago. Increasing the hourly wage for his workers will mean a decrease in new hires, he said, and an inflation of prices at the restaurant. He believes this will be bad for business.
But according to LAEDC’s survey of local businesses, over three quarters of Long Beach employers of minimum wage workers would not likely reduce staff hours or cut the number of minimum wage workers. However, 93 percent of employers surveyed by the study said they would likely pass on increased labor costs to customers through higher prices.
A similar Economic Roundtable report released earlier in the year found that compared to other minimum wage employees restaurant workers stand to gain the most from a wage hike. But the report also noted the industry is particularly sensitive to wage increases since it relies mostly on low-wage work and sees minimal profit per worker compared to other industries.
Still, both reports argue that if workers have more money, they will buy more, stimulating the economy and supporting small businesses.
“With the increase in the minimum wage … there will be more spending locally. That’s what we’ve seen in Seattle and other parts [of the country] where they’ve increased the minimum wage,” said Manuel Villanueva, an organizer with the Restaurant Opportunities Center of Los Angeles (ROC-LA).
ROC-LA fought a similar battle with small business owners in Los Angeles over that city’s decision to adopt the $15 per hour wage. Small business owners there advocated for a “total compensation model,” which would have allowed employers to pay under the minimum wage and use tip money to subsidize the rest.
The model did not pass in Los Angeles, to the dismay of some restaurant owners.
But the idea is being considered in Long Beach. According to Villanueva, the total compensation model is a “big mistake.”
Workers “cannot depend on tips because you don’t get the same tips everyday,” Villanueva said. “Also, it’s a way to open more doors to discrimination and wage theft.”
Roger Haynes, 28, spent six years working in Long Beach restaurants. He said that early on tips were good, but then began to drop off.
“When I first started I left with $300 [in tips] once, and then immediately after [my employers] noticed how big we were being tipped, they started paying out tips differently,” said Haynes, noting the amounts began to drop.
As part of efforts to push through the wage hike, organizers with the local Raise the Wage Campaign have called for enforcement measures to prevent wage theft.
Maia Moncrief is one of the city’s many restaurant workers hoping Long Beach leaders will pass a $15 minimum wage.
The 18-year-old works for $9 an hour at a local Carl’s Jr. and said the amount barely covers rent.
Moncrief said she missed a day of work after being sick with a fever. The lost pay meant she couldn’t cover her rent. She was forced back into her mother’s two bedroom apartment in North Long Beach which was already jammed with seven other people.
“I’m right back to where I started,” Moncrief said.
She hopes that her days of skipping meals and skimping on groceries will soon be at an end. “I hope you guys support us in raising the minimum wage,” she said. “Let’s do everything the Long Beach way.”
For more on raising the wage, read this article.