Thursday night’s House Labor Committee meeting took up four different bills concerning the minimum wage. Because of the baffling decisions of House Labor Committee Chair Robert Craven (Democrat, District 32, North Kingstown), the bills were heard (or not heard in the case of at least one bill) in an out of order fashion that had those who showed up to speak on the bills scratching their heads.
H5057, introduced by Representative David Bennett (Democrat, District 20, Warwick), would increase the minimum wage to $10.50 on July 1, 2017.
H5595, introduced by Representative Marcia Ranglin Vassell (Democrat, District 5, Providence), would gradually increase the minimum wage to $15 by 2022.
H5315, introduced by Representative Moira Walsh (Democrat, District 3, Providence), raises the minimum wage for tipped workers by $.50 until the tipped minimum wage is equal to not less than two-thirds of the regular minimum wage.
H5594, introduced by Representative Kenneth Mendonca (Republican, District 72, Portsmouth, Middletown) and Patricia Morgan (Republican, District 26, Coventry, Warwick, West Warwick), would establish a new minimum wage of $9.65 for employees under the age of 20.
Craven paired bills H5057 and H5595 together with H5413, Representative Aaron Regunberg (Democrat, District 4, Providence)’s paid sick leave bill, and asked those testifying to speak on whichever of the three bills they chose too, sometimes allowing merely one minute to do so. It was a confusing House Labor Committee meeting.
The traditional way bills are presented at committee meetings is that the sponsor will introduce the bill and explain the bill’s importance. Sometimes the sponsor will introduce an expert to explain in more detail why the bill is needed. The chair will then invite public testimony. Sometimes similar bills will be paired or grouped together. For instance, at Wednesday night’s House Judiciary Committee meeting, all five bills concerning abortion were introduced and the public testimony was heard on all five bills at once.
Despite the confusion over the way bills were lumped together at Thursday night’s House Labor Committee meeting, advocates and opponents for raising the minimum wage did their best to argue for or against the various bills. Even the Mendonca/Morgan “opportunity wage” bill, H5594, got some attention, even though Morgan withdrew her bill from consideration as the hearing dragged on into the evening and the bill was never introduced.
Representative Walsh did not introduce her bill until very late in the proceedings, by which time all of the people who had come to the State House to testify in favor of her bill had left. They waited at the State House for five hours, and never had their say.
The videos below contains all the public testimony before the House Labor Committee on the minimum wage. Because of the way the meeting was held, some of the testimony below may concern Representative Aaron Regunberg’s Paid Sick Days bill as well as talk about the minimum wage.
First up, Representative David Bennett introduces his bill to raise the minimum wage to $10.50. Note that Bennett says there was no minimum wage increase last year to give business owners a break. Bennett knows as well as anyone that any year in which the minimum wage is not increased, low wage workers take a pay cut due to inflation, which never stops.
Representative Marcia Ranglin Vassell next presented her bill to increase the minimum wage to $15 by 2022. Ranglin-Vassell ran on her promise to introduce and advocate for such a bill.
Charles Jones, a Burger King employee who has never made more than the minimum wage, spoke in favor of raising the minimum wage. Charles has been a long time advocate for raising the minimum wage.
Georgia Hollister-Isman of the RI Working Families Party called the present minimum wage “woefully insufficient.”
Elizabeth Seuver of the Greater Providence Chamber of Commerce has been a longtime opponent of raising the minimum wage.
Rebecca Kislak, president of RI NOW, sees the minimum wage as a way to ensure the ability of women to raise and support their families.
Bahjat Shariff is one of three co-owners of the local Panera Bread franchise. He opposes raising the minimum wage because, he says, it threatens the profitability of his company. Since 2000 Shariff and his partners have opened 29 Panera Bread in Connecticut, Rhode Island and Massachusetts. Shariff’s testimony was interesting and seemingly contradictory. In one moment, he claimed that his business was succeeding on extremely tight margins and could not afford to pay better wages. In the next moment Shariff was extolling the strength and size of the restaurant industry in Rhode Island as it created jobs and opportunities.
For every dollar in sales, said Shariff, his company pulls in 3.9 cents in profit. Shariff said that there were over forty owners and operators of restaurants at the House Labor Committee meeting Thursday. Surprisingly, only three or four of them testified. Even less left written testimony.
Shariff employs 1200 people. The restaurant and hospitality industry is the one growing the economy in Rhode Island, said Shariff.
“I am a Rhode Islander,” said Shariff, “and obviously I dine out quite a bit, just like all of us in Rhode Island.”
Here, I think, Shariff betrays himself, because not everyone in Rhode Island can afford to eat out because some of us make minimum wage.
“We’re adding more jobs every year,” said Shariff, about the restaurant and hospitality industry, “there are more than 58,000 employees, just in our little state of Rhode Island.”
The minimum wage will dampen the restaurant and hospitality industry’s ability to grow said Shariff, to which I thought, do we really want to grow an industry that can’t pay a living wage to its employees? The managers of Panera Bread, said Shariff, make pretty good money. But the vast majority of the workers at Panera Bread are low-wage workers, making “10 or 15 or 20 cents above” minimum wage.
“We have not seen any growth in Southern New England,” said Shariff, “Since 2009.”
“In Rhode Island, the hospitality industry is projected to do $2.8 billion this year,” said Shariff, “That’s 2800 establishments, providing a lot of jobs.”
Shariff said that many of his employees are 16 years old, like his son. “The only thing he has to pay is his car insurance,” said Shariff. “The only thing he has to pay. He doesn’t pay rent. These are the jobs provided for employees.”
“Our full-timers average two and a half dollars above minimum wage,” said Shariff.
Chris Tarro of Sienna Restaurants is the vice chairman of the Rhode Island Hospitality Association (RIHA), which has long opposed raising the minimum wage. Even though Representative Walsh had yet to introduce her bill, Chair Craven told Tarro that it would be okay to testify on her bill as well as the other minimum wage bills under consideration.
Tarro objected to the way restaurant owners are being portrayed by those in favor of raising the minimum wage.
“I want to know when I became Wall Street,” said Tarro. “When did I become a hedge fund owner? When did I not become a working family? When did the restaurant owners, that I represent, stop being working families?
“We’re horrible thieves, sexual harassers, wage stealers, and people who don’t care about their employees. That’s a lot of the propaganda that I hear,” said Tarro.
“Today we’ve got [bills concerning] minimum wage, we’ve got sick leave, we’ve got tipped minimum wage- Where does it end? How do I survive?”
Tarro says that he and his brother have created 140 good paying jobs. Raising the minimum wage exerts upward pressure on all employee pay. When a person making minimum wage is getting $15 says Tarro, the person who used to make $13 now wants $18. Tarro has a payroll of $3 million. “If that goes to $4.5 million, that’s it.”
Tarro says that he’s never fought against a minimum wage increase, which is not exactly true. He asked the committee to go slowly with minimum wage increases.
“My average tipped employee makes $19.68 an hour,” said Tarro. “My average cook makes $14.45.”
“What I love about the [tipped minimum wage,” said Bill Kitsilis, of Angelo’s Palace Pizza is that “it puts me as the owner of the restaurant and an employee of the restaurant to align our interests together. [The employee] is kind of renting space, by their time and putting their time in and come and show up there, they’re kind of partners in the business. And on average the tip is twenty percent if not higher. My servers, at a pizzeria in Cumberland, Rhode Island make about $16 an hour in tips.”
What Kitsilis is suggesting, whether he realizes it or not, is treating servers in restaurants similarly to the way the owners of adult entertainment strip clubs treat their dancers. The onstage performers in Rhode Island strip clubs are considered independent contractors, and pay the club for the privilege of being on stage and collecting tips. The only difference is that dancers pay $25 to rent the stage, in addition to “putting their time in.”
Lobbyist Lennette Boiselle is a longtime opponent of increasing the minimum wage. She advocates on behalf of a slew of business concerns, such as the Northern Rhode Island Chamber of Commerce, RIHA, the Rhode Island Mortgage Bankers Association, The New England Convenience Stores and Energy Markets Association, and the Associated Builders and Contractors of Northern Rhode Island.
John Simmons, of the Rhode Island Public Expenditures Council (RIPEC) opposed the three bills that would raise the minimum wage but did not oppose the Mendonca/Morgan opportunity wage bill. Raising the minimum wage will cause price increases and slow job growth, said Simmons.
If the minimum wage is raised by $.90, says Simmons, it will cost business over $1 million a week. Though he cautions that this will increase the cost of doing business in the state, Simmons does not speculate on what kind of stimulative value an additional $1 million plus a week will have on the economy.
Three industries are hit hardest by minimum wage increases, said Simmons. Those three industries are Accommodation and Food Services, Health Care & Social Assistance and Retail. Simmons said these are the fastest, third fastest and tenth fastest growing industries in Rhode Island.
In his written testimony Simmons provided a bunch of math comparing the minimum wages in Rhode Island and Massachusetts to the median wages in the state, in an attempt to show…
I’m not sure what he was trying to show, actually.
“Rhode Island’s current minimum wage of $9.60 is already higher than Massachusetts’ $11.00 minimum when measured as a percent of each state’s 2015 mean and median hourly wages. This means that minimum wage earners are already better off relative to the state’s average worker in Rhode Island than in Massachustetts,” writes Simmons.
All of which sounds interesting until you realize that it has nothing to do with anything. In neither state is the minimum wage anything close to a living wage, and comparing the minimum wage to median and mean wages the way Simmons and RIPEC do explains nothing of value. But the numbers Simmons presented sure sounded complicated and business-like, so we’re all expected to nod our heads like this information is useful.
Emmanuel Falck of SEIU 1199 spoke in support of raising the minimum wage to $15.
Chair Craven gave Douglas Hall, a doctor of economics speaking on behalf of the Economic Progress Institute (EPI), one minute to complete his testimony on three bills.
Hall made the point that Simmons (above) would not make. Increasing the minimum wage puts money into the pockets of the people who spend it the most quickly. It would have an immediate stimulative effect on the economy. Hall went after Simmons directly, saying, “we heard from Simmons that the sectors that would be most affected by [a minimum wage increase] are sectors that have been thriving over recent years, which I find hard to reconcile with his statement that during that time we’ve had four minimum wage increases. Well, there’s actually a simple answer to that. We’re putting money into the hands of people who then spend it in exactly those industries.”
Restaurants and retail thrive on disposable income. “Giving them disposable income makes lower income Rhode Islanders the driving force behind employment growth. Those are the people who are the job creators,” said Hall.
Maureen Martin of the AFL-CIO said that the unions believe that everyone should be making a living wage. Martin called the Mendonca/Morgan bill, which would allow those under the age of twenty to be paid a lower minimum wage the “modern day child labor law” and said that the AFL-CIO stands in opposition to that.
In the voluminous written testimony presented to House Labor from those opposed to increasing the minimum wage there is an opposition letter from Tracy Clements Anthony, vice president of Clements Marketplace in Portsmouth, Rhode Island that makes the claim that “the minimum wage was not designed to be a living wage.” This is, as Michal Araujo of RI Jobs with Justice points out in his testimony, not true.
Here’s the quote from FDR, the president who helped usher the minimum wage into existence:
“No business which depends for existence on paying less than living wages to its workers has any right to continue in this country.” (1933, Statement on National Industrial Recovery Act)
Araujo started his testimony by pointing out that limiting testimony to one minute (as was done to a series of speakers testifying on the Paid Sick Leave bill before the committee, is unfair since pro-business concerns or “experts” as Chair Craven referred to them, were being given nearly unlimited time.
Craven said, “that’s the reality.”
Scott Sogard is a restaurant broker and he is opposed to raising the tipped minimum wage.
“I sell all the places,” said Sogard, “and you all eat at them and you all toast wine. And when you’re doing that, you’re toasting wine with a server that’s come over and served you, that, by the way, that night she’s making two or three hundred dollars a night. And now we’re talking about taking the small margin that’s left, and pay the highest paid people in the hospitality industry and you’re going to give them all a raise to $15.
“We call ourselves the Ocean State, and what do people do when they come here?” asked Sogard, “they go to the beach and they have boats in Newport. And now we’re going to tell the people that have the boats in Newport, ‘Oh, by the way, you can’t get that Oaky Chardonnay and if you do you have to go up to a counter and have a ticket and get it there.’ Because that’s where we’re headed. We’re going to kill the Golden Goose in this state by over leveraging, the margins are so thin you heard it, 3 percent.”
Sogard sees a lot of financials from restaurants he’s trying to sell, so that the owners can, “retire like they deserve.”
Without manufacturing, what does our state make, asked Sogard, before answering, “We make fish tacos. We make magueritas and fish tacos and we do it well here. Everybody in here, when you’re finished tonight, a lot of people will be going there and you’ll be served by a server. That server is likely a college professor.”
Sogard said that when he owned a restaurant for 18 years his workers were college professors, college workers, “these are the smartest people wanting to be servers, and now, all of a sudden, you’re going to give them a raise. Do you see their tax returns? Do you know what’s going on?
“Unless the full service restaurants survive here, the entire state is going to be Taco Bell and quick serve.”
Raising the minimum wage will cause restaurant operators to cut back on workers. Instead of six hours, operators will schedule workers for five hours. This will lead to “dirtier restaurants, guaranteed,” said Sogard. “You pass this law [increasing the minimum wage], there are going to be dirtier restaurants. I hope you increase the budget for the health department.”
Michael Beauregard of the Young Democrats of Rhode Island supported the minimum wage bills, except for the Mendonca/Morgan lower wage for workers under 20 bill.
Raul Figueroa and organizer from Fuerza Laboral spoke in favor of raising the minimum wage.
Finally, after many hours of testimony, some directly on her bill, Representative Walsh was allowed to introduce her bill to the committee. Unfortunately, all the workers who were prepared to testify on Walsh’s bill, and would benefit when the bill passed, had already gone home, having waited five hours for nothing.
Michael Araujo of RI Jobs with Justice testified in favor of Walsh’s bill.
Ruth Ferrazzano owner of Murphy’s Deli & Bar spoke against raising the tipped minimum wage.
Lou Ferrazzano, general manager of Murphy’s Deli & Bar also spoke against raising the tipped minimum wage.