By Michael Kane, Economic Development & Public Policy Associate
WORCESTER – For the November 2024 election, the Worcester Regional Chamber of Commerce will oppose Question 5 in support of our local small businesses, restaurants, and tipped employees.
Question 5 will eliminate the tipped minimum wage in Massachusetts and will gradually increase the wage of tipped employees until their wages meet the state minimum wage in the year 2029. Also, the ballot measure would allow restaurants to implement “tip pools” where non-tipped employees would share tips collected by servers.
If approved by voters, this ballot measure will fundamentally change the way our local restaurants and bars operate, which are still recovering from the negative economic conditions that the COVID-19 pandemic placed on the hospitality industry. As this industry already operates on thin margins and Worcester businesses have to pay the 7th Highest Commercial Tax Rate in the Commonwealth, it is crucial to defeat this ballot measure to support our local hospitality industry.
Businesses are not the only group that are concerned about this ballot measure, tipped employees in the hospitality industry are as well. A survey conducted in 2024, by the Massachusetts Restaurant Association conveyed that a staggering 86% of tipped employees in Massachusetts think the current system works for them, and 90% believe that if tipped wages are eliminated, employees will earn less.
Employees are concerned and have showcased their resentment toward the elimination of tipped wages in other states. For example, a ballot measure in Maine was successfully passed to eliminate the tipped minimum wage in 2016, however, restaurant workers successfully lobbied the State Legislature to lower their minimum wage just one year later. They were concerned that by eliminating the tipped wage, customers would tip less and reduce the number of tips employees would take home to support themselves and their families.
A Cornell University study backs up these concerns as the study found that states with higher tipped minimum wages see lower than average tip percentages in restaurants. California, where employers are required to pay the state’s minimum wage in addition to any tips employees receive, has the lowest tip average among all 50 states.
Further, the hospitality industry and employees in Washington D.C. have started to see the adverse effects of eliminating the tipped minimum wage in 2022. Since the ballot measure was passed over 10% of tipped employees (3,200) have been laid off or left the industry due to lower take-home pay and business closures.
In Massachusetts, the current law already requires employers in the hospitality industry to provide tipped employees with a guaranteed minimum wage of $15, making up the difference for tipped employees who did not earn a minimum wage with tips. However, the MRA survey conveyed that an overwhelming majority of tipped employees in Massachusetts say they earn over minimum wage, as 89% of respondents report earning $20 or more per hour (89%), and 56% of respondents report earning more than $30 or more per hour.
If Question 5 were to pass in Massachusetts, some of our favorite bars and restaurants would simply not survive. The Worcester Regional Chamber of Commerce urges voters to support their local restaurants and tipped employees by VOTING NO on Question 5 in the November election.
https://www.mass.gov/minimum-wage-program
https://www.protecttips.org/_files/ugd/11228c_fbf7a1fe07e24e1da06c3b3bcb36c3b4.pdf
https://pos.toasttab.com/news/most-popular-alcohol-by-state-toast-restaurant-trends-report
The Effects of Minimum Wages on Tipping: A State-Level Analysis (epionline.org)
Restaurant servers fight to keep lower minimum wage – and tips – The Washington Post
