NEW BEDFORD — Aside from voting for the president and national and state political officials on Tuesday, Nov. 5, voters could also shape the future of the local restaurant industry. One of the referendums on the ballot is Question 5, which would gradually increase the minimum wage for tipped employees.
This measure has sparked a debate among businesses and restaurant owners, with many advocating for a "no" vote.
As of January 2024, the minimum wage for tipped employees in Massachusetts was $6.75 before tips. Under Question 5, the minimum wage for tipped employees will gradually increase, reaching the state minimum wage of $15 by January 2029.
Tipped employees could still receive tips in addition to the state minimum wage, according to the proposed schedule.
The two sides of what 'Question 5' means for restaurants
One Fair Wage Plus Tips MA argues that this measure would provide financial stability and security for tipped employees. They claim that thousands of tipped workers in Massachusetts are leaving the restaurant industry because they cannot make a living wage, and that the time to raise the tipped minimum is now.
However, local restaurant owners have raised concerns about the potential impact of Question 5. They argue that increasing the minimum wage for tipped employees would place a significant financial burden on them, resulting in higher costs for consumers.
The Massachusetts Restaurant Association opposes the initiative, with the organization's president and CEO Steve Clark stating that it will negatively impact servers, restaurant owners and consumers.
Stephen Silverstein, owner of The Black Whale, Sail Loft and three other restaurants in New Bedford, said this change would negatively impact tipped wage earners.
“The industry doesn’t want it. Why is it even on the ballot? It’s a disaster,” he said.
"Tipped wage earners know they will actually have a decrease in pay if Question 5 passes. If restaurants have to increase the base wage, and pay taxes on those wages, they will be forced to change their pay model, using tips to offset the increased expense."
Silverstein claimed the average tipped employee makes $35 an hour, much more than the minimum wage of $15.
"All restaurants are required to make sure all tipped employees make at least $15. If tips aren’t enough the company needs to make up the difference. No one makes 6.75 - it’s the law," he said.
“The restaurant industry operates on low profit margins, and many independent restaurants are struggling to stay in business. The impact of COVID-19 and closures has already seen six restaurants in the New Bedford area shut down. If Question 5 passes, it is estimated that another 10% may close."
Local restaurateur says more restaurants will close if 'Question 5' passes
In addition to reduced income for tipped employees and restaurant closures, Silverstein said he predicts that a yes vote will also result in job losses.
"My estimate is that 20% of tipped employees will lose their jobs. The MA Restaurant Association predicts that this change will result in 10% of restaurants closing. These predictions are being proven in Washington, D.C., where the law has already changed,” he said.
"We use about 50,000 tipped hours per year per restaurant. If tipped wages go from $6.75 to $15, and maybe more, that's $400,000 a year in cost to each of our restaurants. Where will that money come from? It has to come by taking tips, which will ultimately affect the income of tipped employees."
Silverstein also added that Gov. Maura Healey has already publicly said she plans on voting no on Question 5.
“She spent many years as a server in restaurants and understands the impact this change would have on their income,” he said.
"This was not a Massachusetts group that initiated this … 43 states do not have this law."
Silverstein said that his tipped employees know that a yes vote will lead to reduced income, and said that 90% of his staff are planning on voting no.
Local New Bedford server plans to vote no
Colton Sousa, a staff member at The Black Whale and Cisco Kitchen + Bar, has been in the service industry for over a decade working in all different types of restaurants. He said he also strongly opposes Question 5.
"I 100% plan on supporting voting no on Question5. ... I fear that it'll increase prices to a point where not as many people may go out to enjoy the dining experience. And I anticipate many smaller businesses or restaurants closing,” he said.
Sousa said he also believes that the current system, where servers rely on tips and make more than minimum wage, works well for both employees and customers.
"When you receive a tip, it's also considered a gratuity, and I think that showing gratitude from the customer or guests is a lot more ... If there's ever a point in time where we would have to alter that, the money has to come from somewhere,” he said.
"The majority of small businesses and experiences for the consumer on a day-to-day basis would be hindered. The way that things are now has been able to allow me to both make a living and achieve my goals in the long run."
Industry professional says people have threatened to quit if Question 5 passes
Sousa said that it’s important for servers who may not be familiar with the issue to be cautious about the expectations of dining now, when considering the vote.
“Any changes or alterations to that would be detrimental to the majority of small businesses and experiences for the consumer,” he said.
Several other restaurants around the New Bedford area have strongly encouraged people to vote no. Six and Sevens posted on their social media with reasons as to why people should vote against the question.
As the president of Moby Dick Brewing Company Inc. and former co-owner of Airport Grille, David Slutz has been in the restaurant business for over two decades.
"This will destroy the full-service restaurant business. The industry, including the employees, doesn’t want this. This is being pushed by a lobby group from California,” he said.
Slutz said the law is not a result of a collective decision by restaurant owners and employees, but instead is being pushed by an outside group with no knowledge or investment in the Massachusetts restaurant industry.
“A few I have spoken to plan to quit the profession should this pass,” he added.
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