AOC\u2019s approach to wages helped close a restaurant where she used to work
New York Rep. Alexandria Ocasio-Cortez will return to her restaurant roots this Friday, tending bar in the 14th Congressional District (location TBA) to raise support for a campaign to change how tipped employees are paid.
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The problem: The approach she’ll champion helped to close at least one joint AOC used to work at.
AOC’s watering hole for the working class might succeed as a media stunt. But the policy she is promoting has drawn opposition from an unexpected interest group: tipped servers and bartenders.
Start with a quick primer on restaurant industry wages. In all but seven states, tipped employees can be paid a lower base wage so long as their hourly wage equals at least the required minimum when tips are included.
If employees’ tips fall short of this mark, employers are legally required to make up the difference. This is rarely a problem; federal data show that tipped employees in New York report earning $17 an hour upstate and $20 an hour in New York City. (A 2015 report from the New York City Hospitality Alliance puts the median hourly rate at $25.)
A survey of tipped employees from industry publication Upserve found that 97% prefer this current payment system of a base wage plus tips. AOC of all people should know this; The Post reported last year that she earned upward of $560 on a busy night at her former bar, Flats Fix. Even assuming she worked a 10-hour shift and tipped out $100 to the waitstaff, it still averages out to $46 an hour.
Not everyone is happy with the status quo. The Restaurant Opportunities Center, a controversial New York-based labor group, says “this system of tipping needs to go.” (One of ROC’s organizers explained “you can’t do payroll [union dues] deductions” when employees are earning their income through tips.)
ROC first made a name for itself staging raucous protests at Restaurant Daniel and other (nonunion) eateries in Manhattan, though some of its own employees filed a lawsuit alleging their work had gone unpaid.
ROC has criticized a system in which servers and bartenders “chase the highest tips” and has instead advocated for alternatives, including a higher flat wage.
But these alternatives have proved unpopular in New York. For instance, restaurateur Danny Meyer reported losing up to 40% of his veteran service staff after moving from a tipped model to an alternative where the gratuity was included in the price of the meal.
Last year, the state Labor Department held a series of hearings around the Empire State to hear from affected workers regarding their views on the tipping system.
Current tipped employees packed venues upstate and in New York City to testify against ROC’s proposed changes. More than 14,000 tipped employees and their supporters rallied to the cause in a Facebook group, and more than 12,000 signed a petition in support of keeping the current system; by contrast, ROC’s New York campaign page had just 235 followers.
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ROC struggles to demonstrate that it has tipped employees’ best interests in mind, relying instead on high-profile celebrity surrogates such as Jane Fonda, Amy Poehler, Amy Schumer and now AOC to advance its cause.
The optics have been less than favorable. Last year, a letter from these celebrities to Gov. Andrew Cuomo was rebutted by a letter from hundreds of tipped workers in the state, who told the Hollywood elites to butt out: “Thank you for your concern. But we don’t need your help, and we’re not asking to be saved.”
Perhaps the most compelling evidence against AOC’s preferred policy change comes from her former employer. The owners of Flats Fix taco bar also owned the iconic Coffee Shop diner in Union Square; AOC worked at both. In October 2018, Coffee Shop closed its doors, with the owners citing New York’s rapidly rising minimum wage as a determining factor.
They’re not alone in feeling the pinch. The minimum wage in New York City has increased by 36% since late 2016; meanwhile, the minimum wage for tipped employees has doubled since late 2015. Perhaps as a consequence, the city in 2018 experienced its first year of negative full-service employment growth in nearly two decades. A survey of city restaurateurs by the New York City Hospitality Alliance found that 36% slashed jobs last year.
If AOC wants to help the employees in the industry she once called home, she can start by listening to them. They don’t need a photo op in the 14th District; they need a politician who’s willing to stand up for a system that has benefited so many.
Michael Saltsman is managing director at the Employment Policies Institute.
