How $15/hour minimum wage will hurt the people it’s supposed to help.

A $15/hour minimum wage grabs attention. It promises to address exploitative wages, to lift the impoverished into the middle class, and to fight income inequality. And for warm-hearted, well-meaning citizens like you and me, these are good things. There is only one problem: these promises cannot be kept. A $15/hour minimum wage will hurt its beneficiaries more than it will help them.

Full disclosure: my wife and I own a profitable, single-location restaurant with about 30 employees, and so you might think we are biased against a $15/hour minimum wage on principle. If you think that, you are wrong. We sincerely care about our team. We want them to thrive. Our full-time servers earn $50k-$60k annually after tips. The kitchen earns between $10-12 per hour, but overtime allows most to earn about $40k per year. These are not exploitative wages.

As proposed and without other business adjustments, annual income for our servers will jump to about $60k-$75k, and the kitchen will see about $55k. As business owners, we would support a $15/hour minimum wage if it did not hurt the team or put the business at risk. Unfortunately though, there is just not enough money in our business to afford the increase in labor costs. In order to keep the business open and our staff employed, we will be forced to adapt in ways that will ultimately hurt our team. Here are the changes that a $15/hour minimum wage would force upon our business:

Overtime will be prohibited.

$22.50 for overtime will just be unaffordable.  With 12 hours of operation daily, most full-time employees will only be permitted three 12-hour days per week. Employees will make more per hour but will make about 20% less per week. To avoid an income reduction, they will probably take a second job, if they can even find one. They will be challenged to juggle the scheduling demands of two employers, and they will lose valuable time commuting between jobs.

We will hire more (mostly part-time) employees.

Assuming the economy does not falter, we will need to cover the lost overtime labor. Part-time employees will afford us more flexibility to cover peak hours and to avoid overtime risks. Fewer full-time positions will be available for those who want them.

We will move to a tip-included pricing model.

Dining room employees already earn more than our kitchen team, and the current proposal will make it worse. To fix this, we will increase our menu prices to include tips. Customers will then be discouraged from tipping further. Servers will receive a wage above the $15/hour minimum but less than the $25-$35/hour they make now. The difference will be redirected to back-of-house labor costs. Servers will lose all rewards they receive for outstanding service.

We will aggressively cut hours during slow shifts.

Today, server income varies according to sales, and we have enough profit to play it safe by not sending our team home too early. After these changes, though, we will be forced to cut shifts earlier and more often, putting further income pressure on employees who will already be earning less.

We will increase prices even further.

Our modeling indicates the above measures will hold back about half of the cost increases. The remaining costs are more than our entire profit. So we will need to raise prices further. Unfortunately, customer visits may just decline proportionally, resulting in lower sales and a shrinking labor force.

We will delay opening new locations.

We are currently searching for our second location, but the uncertainty of how successful we will adapt to the new business environment of a $15/hour minimum wage gives us pause. We cannot contribute to a growing economy if we are not certain we can make money.

Admittedly, this entire commentary is an anecdote of a single business, but I assure you our business is not unique. Thousands of others look just like us, and we are all going to face the hard choices I have outlined here if a $15/hour minimum wage happens.

If you still want a $15/hour minimum wage, the truth is, the sky will not fall. Demand for good food will survive this change, and those restaurants with a good head for business will find a way to adapt and survive, and so will the employees. The question is, though, will it be worth the trade-offs?

This op-ed was written by FRLA Northeast Chapter member Jeffrey Schofield, who is the Founder, Owner and Operator of Blue Orchid Thai Cuisine in Jacksonville. It appeared on Florida Politics and in the South Florida Sun-Sentinel.

For more information about the proposed $15 minimum wage and FRLA’s position on how this will impact the hospitality industry in Florida, please visit our Minimum Wage page.

[Orlando, Fla] Representatives from the Florida Restaurant & Lodging Association (FRLA) recognized the commitment and service of the late David Burke in a ceremony held on Sept. 15. The Hospitality Stars of the Industry Celebration honors men and women from around the Sunshine State for their remarkable work in hospitality, and the FRLA chose Burke as the 2019 Hotelier of the Year. This distinction places the recently-passed Executive Vice President and Chief Sales & Marketing Officer for the Breakers Palm Beach in the association’s Hall of Fame, reserved for those who have dedicated decades to providing excellent service and leadership in hospitality.

“David was a highly valued member of the Florida hospitality industry and a dear friend of mine and the association’s. I am honored to induct him into our Hall of Fame,” said Carol Dover, CEO and President of FRLA. “His passion for this industry shined through all the amazing things he did throughout his career and life. He was a beloved friend and will be dearly missed.”

Originally from Bethlehem, Pa., David Burke arrived at The Breakers Palm Beach in 1991 after ten years with Hyatt Hotels & Resorts. His career began after graduating from Florida International University with a Bachelor of Science Degree in Hospitality Management, at the Boca Raton Resort & Club. After two years, he joined Hyatt and worked for a variety of locations including Maui, San Francisco, Lake Tahoe and the Caribbean. While in Hawaii, he oversaw marketing for five of the company’s resorts totaling more than 5,000 rooms. With more than 40 years in the industry, 27 of them at The Breakers, Burke was passionate about hospitality.

David served as a member of the FRLA Board of Directors beginning in 2014, and most recently served as Chair of the 2018 Government Relations Committee. He was also President of FRLA’s Palm Beach Chapter before passing.

[Tallahassee, Fla] The Florida Restaurant and Lodging Association (FRLA) has issued the following statement from Carol Dover, CEO/President, regarding John Morgan’s remarks at the Tiger Bay Club of Tampa on Friday:

“Mr. Morgan has made his position on minimum wage clear by leading the charge to get a constitutional amendment on the ballot next November. While I respectfully and vehemently oppose his position on this issue, I am deeply offended by his remarks at the Tampa Tiger Bay Club on Friday. By referring to minimum wage as ‘slave labor,’ Mr. Morgan showed us all just how tone deaf he is and how utterly oblivious he is to a very real problem in our state.

“His comments likening his fight for a $15/hour minimum wage to the fight of abolitionists who worked to end slavery are an affront to every man and woman who was jailed, beaten and branded for trying to protect the lives of their fellow humans.

“Furthermore, Mr. Morgan’s statements highlight his ignorance regarding the modern-day slavery we are actively working to stop, human trafficking. This heinous crime is real, and there are men, women and children in the United States who are literally enslaved because of human trafficking. Drawing comparisons between their plight and those who work for minimum wage is disgusting, cold-hearted and insulting to both groups.

“Minimum wage is an important issue facing our state, and the debate should be robust and vigorous, not convoluted with inaccurate and insensitive comparisons to abhorrent crime.”

[Tallahassee, Fla] The Florida Restaurant & Lodging Association (FRLA) is proud to announce Sheldon Suga as the 2020 Chairman of the Board. Suga, the Vice President and Managing Director of Hawks Cay Resort, began serving as FRLA’s new chairman effective Sept. 15. He presides over FRLA, one of the state’s largest trade associations representing more than 10,000 members in the hospitality industry.

“Sheldon Suga is a demonstrated leader who has devoted his entire career to providing an exceptional lodging experience,” said Carol Dover, FRLA CEO and President. “He is highly regarded in the hospitality industry, and FRLA is extremely fortunate to have a professional of his stature lead our association through the rest of 2019 and 2020. We’re excited at the opportunity to have Sheldon serve alongside our 2020 Executive Committee and confident the Association will continue to flourish under his incredible leadership.”

Suga is an industry veteran with more than 35 years of industry experience. He found a passion for the industry at 16 years old while working as a room clerk in Niagara Falls, Canada, and began his degree of Hospitality Management at Ryerson University. After graduation, he was accepted into ITT Sheraton’s General Management Training program. During his time with Sheraton, Suga served as general manager at properties around the country and as country manager in Tokyo. With vast industry experience, Suga has been overseeing the Hawks Cay Resort, in the Florida Keys, for more than a decade.

“I am proud to have the opportunity to serve as Chairman of the Board for Florida’s premier non-profit hospitality trade association,” said Suga. “It’s a special feeling and I look forward to another year of working with FRLA and seeing an outstanding year for Florida’s hospitality industry.”

In addition to previously serving as the Chapter President of the FRLA Monroe County Chapter and most recent Vice President of the Board, Suga is also a member and past chair of the District III Advisory Committee of the Monroe County Tourist Development Council.

[Fort Myers, Fla] On October 15, join Lee County ProStart high schools for a delicious time at the Florida Restaurant and Lodging Association (FRLA) Lee Chapter’s 2^nd Annual Taco Cook-Off in partnership with Uncommon Friends. Hosted at the Burroughs Home & Gardens, local ProStart culinary student and instructor teams will prepare signature tacos and side dishes for attendees and judges, hoping for a chance to be crowned Overall Winner of the Taco Cook-Off. The competing high schools are: East Lee County High School, Estero High School, Oasis Charter High School, Island Coast High School, Lehigh Senior High School and Cape Coral Technical College & Fort Myers Technical College.

“The event is a great way to give students experience in cooking for large numbers of guests and serves up a healthy dose of competition,” explains Melissa Johnson, Teacher on Assignment at The School District of Lee County, who oversees the ProStart/culinary programs locally. “Community events like this cook-off are wonderful for showcasing local student talents, but also helps raise awareness and money for these Career & Technical Education programs.”

The fiesta will begin at 5:30 PM and end at 8:00 PM. In addition to great food, there will be live music, raffles and silent auctions. Guests will not only be able to try the student and instructor’s creations, but they will also lend a hand in the judging process, picking the Fan Favorite Winner. The Overall Winner will be selected by a group of local celebrity judges including ABC7 News’ Simone Cuccurullo, Guy Clarke, James Fraser, FOX4’s Lisa Greenberg, Chef Jay Johnson, Normal Love, Chef Joe Pittman, and many more.

Proceeds from the event will go towards Lee County’s ProStart programs, contributing to student scholarships, classroom supplies and equipment as well as state competitions. In addition, FRLA is partnering with Uncommon Friends to raise money for their scholarship programs, too.

Tickets cost $30 and are available to purchase here.

For more information on the Taco Cook-Off, contact FRLA Southwest Florida Regional Director, Lois Croft at 239-339-7692 or Lcroft@frla.org.

FRLA staff have been working with leaders and partners at the State Emergency Operations Center in Tallahassee in preparation for the impacts of Hurricane Dorian. Take a look and see what staff have been working on to ensure that Floridians and visitors stay safe as this record-setting storm approaches the Florida east coast.

[Tallahassee, Fla] Attorney General Ashley Moody has received multiple reports of price gouging for lodging establishments throughout Florida. As Gov. DeSantis declared a State of Emergency for Hurricane Dorian, the Attorney General’s office is actively watching for price gouging to protect Florida’s consumers during this crisis.

FRLA reminds all members that price gouging is illegal and also goes against the very foundation of the hospitality industry.

We understand that some of these reports may be the result of software lodging facilities use that automatically controls pricing based on availability of rooms. Therefore, we strongly urge you to:

• Actively monitor your prices via your booking software and override pricing as needed.
• Adjust your inventory to show “no vacancy” rather than allowing the booking software to display an exorbitant price.

Report Price Gouging. Gov. DeSantis declared a State of Emergency for Hurricane Dorian. In counties where there is a State of Emergency, Florida’s price gouging law applies.Learn how to comply and/or report violations online or via the Attorney General’s Price Gouging Hotline at 1-866-966-7226. Protect yourself from price gouging with these tips.

If you have any questions or if FRLA can help you in any way, please contact help@frla.org.