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Tracy Kosbau
Vice President of Marketing and Public Relations

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December 3, 2013

Minimum Wage Hike Not Good for Wisconsin Economy

MADISON – The Wisconsin Restaurant Association released a statement today, to address protests planned for Thursday December 5th in Milwaukee, Madison, Eau Claire, Green Bay, La Crosse, Wausau and Racine. At these protests, activists are likely to call for a large increase – some suggesting a minimum wage of $15 an hour. The association’s stance on the issue: doubling the minimum wage would take jobs away from the very people the protesters want to help – workers in entry-level jobs.

“Wisconsin’s economy is finally recovering from a devastating recession, and the hospitality industry has just started to grow sales and create jobs again,” said Pete Hanson, Vice President of Public Affairs for the Wisconsin Restaurant Association that represents Wisconsin’s 15,000 restaurants. “This would be an inopportune time for the government to mandate higher wages. Employers would have to cut jobs, raise prices, or both, to account for the increased cost.”

According to Hanson, a 2007 industry survey showed that 77 percent of restaurants nationwide either raised prices or reduced employment levels after a minimum wage increase took effect that year.

“Very few entry-level employees in our industry are trying to raise a family on that wage,” Hanson said. “Most of our entry-level workers are students and other young people who are making money to put gas in their cars, go out to the movies on Friday night or save for college. Seventy percent of restaurant workers earning minimum wage are under age 25, and 46 percent are teenagers.”

85 percent of minimum wage employees are students, young people without kids or the second or third wage earner in their family, according to Hanson. The average household income of a minimum wage earner is $62,507.

“The fact is the restaurant industry pays a fair wage to employees based upon their experience and skill set. Restaurants train inexperienced workers – teaching them the skills they will need to succeed on any career path, whether in the foodservice industry, or elsewhere. In fact, one out three Americans got their first job in a restaurant.

“There is an opportunity for everyone in the foodservice industry, whatever their skill level or background, to take their first steps on the pathway to a good job and a middle class income. How many other industries offer that opportunity to virtually anyone who is willing to work?

“America’s restaurant industry provides opportunities for millions of Americans, women and men from all backgrounds, to move up the ladder and succeed. In addition to providing more than 13 million job opportunities, the restaurant industry is one of the best paths to achieving the American dream, with 80 percent of restaurant owners having started their careers in entry-level positions. In fact nine out of 10 salaried employees started as hourly workers.

Minimum wage increases negatively impact restaurant jobs and drive up consumer costs. When labor costs rise, employers in labor-intensive industries such as ours are forced to raise prices or use technology such as “touch screens” to maintain profitability. Also, if the minimum is significantly raised, employers may hire less workers because they are able to employ older, more experienced workers.

“We talk to restaurant owners and employees all around the state, and most of them are proud of the work they do and the service they provide to their communities. We are troubled by the recent, inaccurate criticisms of the restaurant industry by special interest groups. By doing this they devalue these jobs and they devalue the 250,000 Wisconsinites who work in the foodservice industry, and we don’t believe anyone wants that,” Hanson said.

Hanson also indicated that the restaurant industry accounts for one out of every ten jobs in Wisconsin.

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Since 1933, the Wisconsin Restaurant Association has been dedicated to the promotion, protection and improvement of the foodservice industry.

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Wisconsin Restaurant Association • 2801 Fish Hatchery Rd. • Madison, WI 53713 • Tel: 608.270.9950 • Toll Free: 800.589.3211 • FAX: 608.270.9960