Minimum Wage | National Restaurant Association

Public Policy Issue Briefs

Issue: Minimum Wage
Overview: An increase in labor costs in this uncertain economy will mean fewer jobs for entry-level workers.

Questions? Contact the Association's Public Affairs Division

Message
Oppose any further federal- or state-mandated increases in the starting wage.

Summary
The federal minimum wage increased to $7.25 on July 24, 2009. The last of a 3-step increase caps of a 41 percent increase in the federal wage - the largest federal increase ever.

Wage mandates are an ineffective way to reduce poverty and cause restaurant operators to make very difficult decisions to eliminate jobs, cut staff hours or increase prices. These decisions end up hurting the very employees that wage increases are meant to help.

In June 2008, the National Restaurant Association surveyed 1,300 members in the 18 states that followed the federal minimum wage at that time, to determine if any actions were taken by restaurant operators as a result of the 2007 minimum wage increase. In addition, restaurant operators were asked if they plan any additional actions after the 2008 minimum wage increase. Restaurant operators took a number of actions as a result of the 2007 minimum wage increase. Fifty-eight percent of operators increased menu prices, while 41 percent reduced the number of hours that their employees work. Twenty-six percent of operators postponed plans for new hiring, while 24 percent of operators reduced the number of employees in their restaurants. Twenty-three percent of restaurant operators took no actions as a result of the 2007 minimum wage increase.

At the state level after the July increase, 19 states and the District of Columbia will have higher minimum wages than the federal standard and 10 states tie their minimum wage to annual inflation.

Questions? For policy related questions, please contact Tim Ehlert at (202) 331-5938 or tehlert@restaurant.org.

For media related inquiries, please contact Mike Donohue at (202)331-5902 or mdonohue@restaurant.org.