June 21, 2006
Contact: Sue Hensley (703) 582-8679, Chrissy Shott 202-331-5902

(Washington, DC) The National Restaurant Association today praised the Senate for voting down an amendment to S. 2766, the FY2007 Defense Authorization Act, proposed by Senator Ted Kennedy (D-MA). The amendment, which failed to get the 60 votes necessary to pass, was rejected by a vote of 52-46. The amendment sought to increase the federal minimum wage by an onerous 41 percent - from $5.15 to $7.25 - over the next two years.

"As the nation’s largest private-sector employer with 12.5 million workers, the restaurant industry is grateful that the Senate recognized the adverse economic impact that this amendment would have on our nation's small businesses," said Steve Anderson, president and chief executive officer of the Association. "Senator Kennedy’s proposal would target small businesses that employ people in entry-level positions, ultimately impeding job creation and hurting those that it is intended to assist."

A federal wage increase to $7.25 per hour, as proposed by Sen. Kennedy, is the largest increase in the entry-level wage rate ever proposed. Increases in the federal minimum wage have had a dramatic impact on restaurant industry employment. An analysis based on a nationwide survey of 1,000 restaurant operators showed that over 146,000 jobs were cut from restaurant payrolls, with operators postponing plans to hire an additional 106,000 new employees after the last federal wage increases.

Two-thirds of workers who start at the minimum wage see a salary increase within one year – averaging 10 percent – even without a mandate from the federal government. The restaurant industry supports higher wages appropriate to the skill levels and experience of its employees, and strongly believes that the market best determines entry-level compensation in different regions of the country.

"At a time when businesses are buffeted by high energy costs and soaring insurance costs, a federally-mandated minimum wage increase would only create further hardship for our nation's small businesses," said Anderson.

The National Restaurant Association has been a leader in the debate on minimum wage on behalf of the restaurant industry's 925,000 restaurant-and-foodservice locations across the nation. The Association chairs the Coalition for Job Opportunities, a group of more than 30 business organizations opposed to government-mandated increases in the entry-level wage.