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Eliminating tipped wage a mixed bag

Alpena-area restaurateurs and their serving staff are worried about a state law that would — beginning next month — gradually eliminate tipped wages, which allow restaurants to pay servers less than the minimum wage under the assumption the servers will at least make up the difference in tips.

Eliminating tipped wages means restaurants and other businesses where employees rely on tips would eventually have to pay employees at least the minimum wage, which is about to hike to $12.48 an hour, up from its current $10.33. Restaurants currently must pay servers $3.93 an hour.

Alpena restaurateurs told The News they may have to raise prices to be able to pay servers the higher wages — if they can stay open at all. Servers worry patrons will tip less, meaning servers would actually take home less money, despite the higher base pay.

Research says some — but not all — of those fears could come true. Boston news radio station WBUR dug into the data as Massachusetts prepared to eliminate its own tipped wage law last year. According to the radio station, research shows workers earn 10% to 20% more in states without tipped wages, though the change likely would lead to at least “limited” job losses. Restaurants do indeed raise prices, but the number of restaurants actually grew, so fears of restaurants closing could be misplaced.

In Michigan, the Republican-led state House is advancing a bill — with Democratic support — to keep tipped wages. It’s unclear what the Democrat-controlled state Senate will do, though Democratic Gov. Gretchen Whitmer has signaled support for keeping tipped wages. Meanwhile, the Detroit News reports that a group behind several states’ elimination of tipped wages is preparing a ballot drive that would undo the Legislature’s efforts to save the policy.

We urge all readers to be a part of this conversation. Reach out to your lawmaker (find contact information on Page 5A today) to tell them what you think.

(THE ALPENA NEWS)

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