April 9, 2015 – RI Future

April 9, 2015April 15, 2015

Business owner: Restaurants can absorb reasonable tipped minimum wage increase

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Rhode Islanders who want to see both the regular and tipped minimum wage increased by the General Assembly this year should take note of those businesses and business associations that oppose raising the wage and consider spending their money at businesses that truly have the best interests of their employees at heart. It’s all too easy for business owners to say, “I love my employees.” It is harder and more significant for business owners to truly advocate for the economic well being of their employees.

Deborah Norman has owned and operated restaurants in Rhode Island for over 38 years. Currently she owns Rue De L’Espoir on Hope St. and Rue Bis on South St., both in Providence. She has 30 employees between the two restaurants. Norman spoke before the Senate Committee on Labor in support of increasing the tipped minimum wage, an effort opposed by the Rhode Island Hospitality Association and other business lobbying groups.

“While I can only speak for myself and my two restaurants,” said Norman, “it’s difficult for me to imagine that my experience is so abnormal as to be incomparable to that of many other restaurants in our state.”

“An increase in the sub-minimum wage would benefit women, men, families and the economy as a whole,” said Norman, “I wanted to reach out personally as a restaurant owner and explain why I am confident that my restaurants could absorb a reasonable rate increase without a negative impact to my business.”

Norman agreed that an increase done too quickly and too steeply might have disastrous effects, but an “incremental but significant change” could be dealt with. “For example, if Rhode Island were to raise the tipped minimum wage by $1 per year, for three consecutive years… my restaurants would have no problem adapting.” Norman did not think the slight price increase and minor menu “tweaking” she would do to accommodate the change would be noticed by her customers.

“In my opinion,” said Norman, “the biggest difference would be that 20,000 workers in our state would have more money in their pockets, putting them in a better position to actually come out and eat in the restaurants they may even work in.”

“By legally raising the tipped minimum wage across the board, no single business would have to worry about being at a competitive disadvantage.” This is significant, said Norman, because she already pays many of her workers at rates above the tipped minimum wage. She does this because she wants to be fair to her employees, but it puts her restaurant at a competitive disadvantage “because I know that competing restaurants might not act similarly. Raising the sub minimum wage would provide an even playing field.”

April 9, 2015April 10, 2015

Why I love that Linc Chafee wants to run for president

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When Linc Chafee took me sailing last spring, we got to talking about what he’d like to do next and I suggested he put together a team to win back the America’s Cup sailing championship. But it seems as if Rhode Island’s recent one-term governor still has political ambitions instead. Chafee announced today he’s considering running for president of the United States.

It’s fair to say I didn’t think to ask about that potential career move. The news was first reported by RIPR’s Scott MacKay. It came in an email with the subject line, “This is real.”

As governor, Chafee was pretty unpopular with the people of Rhode Island, his approval rating was around 25 percent as his tenure wound down. And he was even less popular with the local chattering class, which has by and large been eviscerating him on Twitter since the news broke.

Chafee doesn’t care what us pundits think of him. I don’t even think he cares how ultimately unpopular he was among his constituents. I think he cares that he did right by Rhode Island during his tenure as governor. And I’d even go so far as to say he may even believe it is on those merits for which he should be judged worthy of higher office.

That may well be politically naive. But it’s also a pretty impressive way to live, especially if your life is running for office. Isn’t this ultimately the first thing we want from any elected official, that they act according to their conscience rather than the prevailing political winds?

Most agree that this is a great personal strength of Chafee’s. He did what he thought was right regardless of political fallout or his own political ambitions. I think we all want to live this way, though few of us want to deal with the fallout.

Maybe the fallout didn’t do Chaffee any favors, either. His carefree approach to public opinion probably won’t win him many votes. And it probably even diminished his ability to govern. In some ways he had this sort of reverse bully pulpit, where anything he said became toxic.

Still, nobody does substance over style better than Linc Chafee. And I think politics desperately needs more substance and less style. The political scientist in me doesn’t think he has a snowball’s chance in hell of being the next president of the United States. But the sailor in me still wishes America had more captains like Linc Chafee.

April 9, 2015April 15, 2015

Tip high and tip often, someone’s economic security depends on it

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There are two minimum wages in this state, as in many states. There’s the one you always hear about that applies to almost everyone and every job, which is around $9.00/hr. right now. Then there is the other one, for the people who didn’t have a strong-enough lobby when the minimum wage bill was first written and subsequently modified. They are mainly restaurant servers – waitresses and waiters. Their minimum wage is currently $2.89/hr. in RI. Hence, it is referred to as the sub-minimum wage, or as I like to call it the substandard minimum wage.

Legislation heard last night would raise the sub-minimum wage to be equal the minimum wage over four years, so that in 2020 the sub-minimum wage would effectively be eliminated for servers.

Some of the Big Issues

How does one live on $2.89/hr.? They don’t. The idea is that tips make up the difference between $2.89 and $9.00, and current law in fact states that owners must add to servers’ income whatever is necessary to bring $2.89+tips up to $9.00. For that matter, how does anyone live on $9.00/hr.? Again, they don’t. That’s way below the poverty line. But that’s another story.

Note that tips are supposed to reward good work, above and beyond what is required of the server. At least, that was the original intent, but now they are formally part of ‘regular’ wages. I’ll bet most patrons do not know that. I didn’t.

Does anyone else see a problem with this? Like, what about all of the slow nights when there are hardly any tips? Even including the good nights the typical server’s income is nothing to write home about.

Many numbers for the actual average server wage, including tips, were tossed around last night. About $8.50/hr. seems to be the most believable. But wait: weren’t servers guaranteed to get $9.00/hr.? Unfortunately some wage theft and other unscrupulous practices occur in some restaurants. But, again, I digress.

Another problem: in order to get decent tips, a server has to suck up to her patrons. The servers that look the best, smiles the most, and doesn’t complain, make the most. If you don’t want to fit this picture, tough. Like it or get another job. Several restaurant owners at the hearing actually said things like this.

There is a LOT more to this, which others have or will addressed.

Observations on Dubious Observations

1) One of the senators on the committee hearing the bill asked: If there are thousand(s) of servers in RI, and they support the bill, why aren’t they all here testifying tonight?

Comment: (We ignore the ludicrousness of this question in the first place.) As a testifier pointed out, most servers have to be at work by 4 PM (that was about when the hearing started). But OK, putting that to one side, by the same reasoning, there are hundreds of restaurant owners in RI, why weren’t all of them there last night? After all, they don’t have to start at 4 PM, the servers (and others) are handling the work at their restaurants.

2) Many of the owners took personal offense at the testimony of the supporters of the bill. Many talked of their staff and themselves as “family.” I have no doubt that the vast majority of the owners in that room are sincere, good people with good intentions. I told a couple of them that. They are also small-business owners, and they do have a tough life. My father was self-employed, I know.

Comment: But there are many owners out there who are not good people, and the state needs to protect all workers.

3) Many of the owners testified that their servers like the status quo. The owners know this because they asked their servers about it directly.

Comment: Anyone NOT see a problem with this? If your boss thinks that A is better than B, and (his) money is involved, and asks you, his worker, if you think the same, and you don’t want to risk losing your job or making less, and you do want to feed your family, and you don’t have a contract or tenure and are not married to the owner’s sister, what are you going to tell him?

4) One of the owners told me that he didn’t think that sexual harassment had anything to do with the bill and, implicitly, should not have been brought up by the bill’s supporters.

Comment: Sexual harassment by the patrons is one of the things servers have to put up with to get decent tips. Unfortunately, it doesn’t stop there, but many servers also have to put up with it from their bosses or managers. If a server resists or complains, the offending party can assign her to the low-tipping work in the restaurant, like assigning her to a small section (fewer tables, etc.).

That’s It

Remember: tip high, tip often.

April 9, 2015April 12, 2015

Legislation would boost state aid to urban libraries

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Two Central Falls lawmakers authored a bill that would direct more state funding to libraries in the seven distressed urban cities in Rhode Island. The legislation, which will be heard by a Senate committee today, follows an RI Future investigation last year that showed affluent suburban libraries receive more state library aid per resident than poor urban communities.

library funding — RI Future analyzed state library aid in March of last year and found per resident the state offers the most financial aid to some of the most affluent communities in Rhode Island while the poorest communities receive the least state aid. Click on the image to read the post from March, 2014.

“It says right in Rhode Island state law that free public libraries are essential to the general enlightenment of citizens in a democracy and that they are an integral part of the educational system at all levels,” said Central Falls Rep. Shelby Maldonado, the sponsor of the bill in the House. “The law also says that it’s the responsibility of government to provide adequate financial support for all free public libraries. In order for that to be done fairly and effectively, it’s only right that the state should increase library aid to distressed communities to cover their annual assessments to Ocean State Libraries.”

The Central Falls library was shuttered for a time as the city went through bankruptcy. Sen. Betty Crowley, the Senate sponsor of the bill, said only because of a few large, high profile donations does Central Falls have a functioning library. “If it weren’t for people like Viola Davis and Alec Baldwin, they would still be closed,” she said.

In spite of their generosity, the library in Central Falls can’t afford to open on weekends, and closes at 6pm on weekdays. This is an acute issue for Central Falls, said Maldonado.

“A lot of families here still don’t have broad band and don’t even have the internet,” she said. “Our kids don’t have the support they need.”

Crowley said the additional state aid “could enable us to open up on Saturdays.”

The legislation would direct about $500,000 from the general fund to libraries in the seven distressed cities: Providence, $284,423; Pawtucket, $65,124; Woonsocket, $53,107; North Providence, $48,437; West Warwick, $40,321 and Central Falls, $18,566. The amounts are based on the contribution each community makes to the Ocean State Library consortium, the umbrella organization for local libraries in Rhode Island.

The new revenue would come from the general fund, Maldonado said, and thus wouldn’t affect state library funding in other communities. “Leadership is open to the idea and we continue to have ongoing conversations,” she said.

Rhode Island’s state library funding formula matches city and town investment, a regressive method that rewards affluence and punishes poverty. Last year the state gave $337,167 in library aid to Barrington and $26,046 to Central Falls.

An RI Future investigation last year showed per resident Rhode Island gives the most library aid to: Barrington, Jamestown, North Kingstown, East Greenwich and Cumberland. The communities to get the least state library aid per resident were: Central Falls, Pawtucket, Woonsocket, West Warwick and Providence.

Deborah Barchi, director of the Barrington library and a past president of the Ocean State Libraries consortium, told RI Future last year she thinks the state funding formula for local libraries is fair. “Each town makes those decisions based on what they value,” she said. “No matter what metric you use, there would be somebody who would feel they weren’t getting enough money.”

But Steve Larrick, the Central Falls planning director and a member of the city library’s board of directors disagreed.

“We think the state needs to play a role in our urban libraries,” he said at the time. “Barrington doesn’t need a library to have access to tremendous resources,” he said. “They have great access to broadband in their homes, and their schools are top notch. Their school library is probably better than our public library. A dollar spent there will not be as meaningful as a dollar spent on the Central Falls library.”

Even the very conservative Center for Freedom and Prosperity, in its spotlight on spending report last year, agreed the state library aid formula is highly regressive.

“It isn’t often that we get to agree with our progressive friends on a matter of government spending, but RIFuture editor Bob Plain noticed that the state gives extra library aid to some communities because they’re able to invest more in their own facilities,” according to its report. “Consequently, Barrington receives over $20 per resident to subsidize its gem of a library while urban residents receive less than $10.”

The Senate Finance Committee will consider the bill today after the full Senate convenes.