Raise The Wage Act Is The Wrong Bill At The Wrong Time, Says NRA

By: Multi-Unit Franchisee
Published: February 23rd, 2021

The National Restaurant Association wanted to know what restaurant operators thought about the potential impact of a proposed federal minimum wage increase that would more than double the current $7.25 an hour over five years. The findings have been released and a letter sent to congressional leaders citing the survey results and imploring that the measure be removed from the $1.9 trillion stimulus plan.  

“Passage of this bill this year would lead to job losses and higher use of labor-reducing equipment and technology,” said Sean Kennedy, executive vice president for Public Affairs for the National Restaurant Association. “Nearly all restaurant operators say they will increase menu prices. But what is clear is that raising prices for consumers will not be enough for restaurants to absorb higher labor costs.” 

Highlights of the survey findings in the letter include:

• Eighty-two percent of operators say the initial wage increases would have a negative impact on their restaurant’s ability to recover from the coronavirus pandemic. For franchisee-owned restaurants, 90% say the initial wage increases would have a negative impact on their ability to recover. 
• Raising the federal minimum wage and eliminating the tip credit would force nearly all (98%) restaurant operators to increase their menu prices; 84% would have to cut jobs and employee hours from normal levels; and 75% would have to cut employee benefits. Full-service and franchisee-owned restaurants are most likely to have to make changes that impact their workforce if the federal minimum wage is increased or the tip credit is eliminated. 
• Sixty-five percent of operators are likely to add labor-reducing equipment or technology.

The association conducted the survey of 2,000 restaurant operators February 2-9, 2021.

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