Citizens' Initiative

Maine Citizens Seek to Restore Tip Credit

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The Maine People’s Alliance is the state’s lone defender of a provision in Question 4 that removed the tip credit last November. Now, the Maine Legislature, answering the call of thousands employed in Maine’s food service industry, readies its aim to reinstate the tip credit into Maine labor law. 

Luckily for Maine’s food service industry, the process to repeal a key component of Question 4 is underway in Augusta.

Sen. Roger Katz, R-Kennebec, has sponsored LD 673, a bill to undo a portion of Question 4, passed in November, by reinstating the tip credit in Maine. The state’s tip credit was eliminated after the passage of Question 4, which incrementally raises Maine’s minimum wage until it reaches $12 an hour in 2020, indexing future increases with inflation.

As part of the initiative, Question 4 raised the minimum wage for all workers in Maine – including those in the food service industry – meaning Maine’s restaurant workers will no longer operate on a tip-based system. This is because Question 4’s passage raised both the standard minimum wage and the base wage for tipped employees.

Prior to Question 4’s enactment on Jan. 1, servers, bartenders and other tipped employees made half of the state’s previous minimum wage ($3.75, half of $7.50) hourly, plus what they received in tips, often making more than the average minimum wage worker. The base wage for tipped employees increased from $3.75 an hour to $5 at the start of 2017, and will increase by $1 annually until it reaches $12 an hour by 2024.

The table below shows the respective annual increases for both the standard minimum wage and base wage of tipped workers in Maine as a result of Question 4:

table

Almost immediately after Question 4’s passage, an opposition movement called the Restaurant Workers of Maine established a private Facebook group with more than 4,000 supporters, calling for the reinstatement of Maine’s tip credit. The group has since grown to more than 5,000 members.

Opponents must now face-off with the ultra-progressive Maine People’s Alliance (MPA), who have defended the original text of the referendum and oppose Katz and other lawmakers’ attempts to modify Question 4.

“I think it is incredibly unfortunate the restaurant industry is trying to roll back the minimum wage increase and is spreading misinformation about the sub-minimum wage increase,” Mike Tipping, communications director for the Maine People’s Alliance, told the Portland Press Herald.

While Question 4 passed in November with 55.5 percent of the vote, opponents of the initiative say they do not believe the Maine people knew this initiative would also affect the food service industry. Tipped workers are worried their future wages will decrease and restaurant owners are anticipating both a surge in menu prices and a move toward automation to make up for increased labor costs.

“For full-service restaurants, this referendum is not sustainable for the majority of Maine, especially outside of Portland,” Wendyll Caisse, owner of Buck’s Naked BBQ, said in an interview, adding that her Freeport location will be non-profitable by 2019 under Question 4. A full view of Caisse’s financial concerns can be seen in a column she penned for The Times Record on March 10.

Caisse says she will be forced, due to increased labor costs, to raise menu prices and find cost-effective methods for service, like automation, in the future. These moves, however, would reshape the food service industry in Maine.

“I could invest $75,000 in IPads and hedge my bet on customers across Maine getting used to the idea of [automated service] because it was becoming the norm, but it is the very last thing I would ever want to do. The service experience is one of the last vestiges of connection and interpersonal dialogue we have,” she added.

Caisse believes the MPA, backed by the AFL-CIO and other liberal labor interests, lobbied for Question 4 because unions seek to organize food service workers in Maine in the near future. She’s also convinced the ballot measure was drafted with little insight from industry insiders and will negatively impact the way Mainers dine out.

“The MPA is so far in the mud here. Even if one of [their activists] had a lucid moment and wanted to listen to the very people they were supposedly trying to ‘raise up,’ they are monetarily bound to do nothing but hold the union line,” Caisse said.

Tipped workers are beginning to feel hardship as well. Michael Hanson, an accountant and experienced part-time waiter at Sea Dog Brewing in South Portland, shared his story with WCSH6 and The Maine Wire.

Hanson says he has averaged about $44,000 a year over the last six years in wages from Sea Dog Brewing alone, working roughly 30 hours a week (and provided the tax forms to prove it). If paid $12 an hour with no tips, Hanson would make just $18,720 a year from his second job.

“It’s less than half of what I normally make,” Hanson said. “Some people may still tip, but even if I made another $18,720 in tips, I still wouldn’t reach what I was making before.”

Hanson also called into question the MPA’s motives and complained the organization has deleted relevant and educational discourse regarding Question 4 from its website. The move for public censorship includes banning users with opposing views from commenting on their site altogether.

“Workers for the MPA and AFL-CIO appear to be the only people who actually defend the original referendum,” Hanson said. “They submit frequently to Maine publications and keep claiming this is what the people want, but when you talk to anyone in the industry that it actually affects, you see we unanimously oppose it.”

“It’s bizarre; if you were making a law to help bus drivers, wouldn’t you ask bus drivers what they think about it?” Hanson added.

Despite the MPA’s erroneous defense this provision, bipartisan support is mounting in the Maine Legislature to restore the tip credit. Katz’s bill has Democratic co-sponsors, and a score of liberal legislators have publicly supported its reinstatement.

The MPA responded with its usual bully tactics, attempting to apply broad political pressure on Democrats by publishing their names online.

Sens. Bill Diamond of Windham and James Dill of Old Town, and Reps. Robert Alley of Beals, Martin Grohman of Biddeford, Louis Luchini of Ellsworth, Brian Hubbell of Bar Harbor, Anne-Marie Mastraccio of Sanford and Catherine Nadeau of Winslow were all individually named in an article posted by the MPA’s media arm, the Maine Beacon, for co-sponsoring initiatives to restore the tip credit. The article claimed the bipartisan approach “betrays the voters” and is “absolutely unacceptable.”

Because the MPA is the Maine Democratic Party’s leading instrument for voter outreach and organizing in Maine, Tipping and his empty-headed, progressive cohorts believe Democratic legislators should ignore their constituents’ concerns and remain personal puppets of the MPA.

However, Maine voters now get to witness firsthand the insincerity and deceitfulness of the MPA, which is on full display through the intended economic consequences of Question 4.

In a nutshell, the MPA proposed legislation without input from industry experts. They sold it to voters through the spread of misinformation. They pushed for vague and unspecific wording to confuse voters. They funded the initiative by out-of-state special interest groups. They censored members of the public who disagreed with them. Worst of all, they did their bidding through popular referendum, because no sensible legislator would have ever voted for their measure.

Regardless, the consequences of Question 4 are adding up, the citizens are speaking out, and those enlightened on the issue are doing everything in their power to provide relief for local business owners and their hardworking employees.

“This new law fundamentally changed the server-customer dynamic in restaurants all across Maine and is already causing some significant misunderstandings,” Sen. Katz said upon introducing LD 673. “Proponents of this provision sold it to the voters as a way to increase wages for these individuals, but it has actually decreased wages in many cases as customers have begun to tip less, resulting in a much lower hourly wage.”

“The elimination of the tip credit is also detrimental to restaurant owners, who already operate on razor thin margins. It is already forcing them to raise prices, reduce hours, eliminate benefits, reduce pay for back-of-the-house staff, switch to a computerized business model, eliminate positions or take a significant hit,” Katz added.

While public hearings have yet to be scheduled for LD 673, the bill’s supporters are anxiously awaiting their day in Augusta.

Unfortunately for the MPA, Maine’s voters, backed by their legislature, have the final say.

About Jacob Posik

Jacob Posik, of Turner, is the editor of the Maine Wire. He can be reached at jacobtposik@gmail.com.

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