Policymakers made few efforts in 2012 to increase minimum wage rates at either the federal or state levels, recognizing the ongoing economic challenges businesses face as they fight to emerge from the recession.
Restaurateurs face cost pressures from all sides, including uncertainty about the impact of the health care law, rising food costs and higher energy costs. Policymakers need to focus on expanding payrolls; they should not take steps that hurt employers' ability to hire. Restaurants are a labor-intensive industry. Labor costs account for about a third of restaurant sales, pretax profit margins are around 3 to 5 percent, and profits per employee are low. Additional labor costs immediately affect an employer's ability to maintain current jobs and hire new employees.
Most employees in the restaurant industry earn in excess of the minimum wage. Just 5 percent of restaurant employees earn the federal minimum wage of $7.25 an hour. Eighty percent of those who earn the starting wage in restaurants work part-time; 70 percent are under age 25; and 46 percent are teenagers.
Nineteen states and five cities set their minimum wage rates higher than the federal rate of $7.25. See the maps of state wage rates and pending legislation.
NRA contacts: Angelo Amador, Ryan Kearney