Durgin-Park, a nearly 200-year-old Boston institution known for its baked beans, Indian pudding, clam chowder and playfully curt waitresses, closed its doors Saturday.
Manager Kenneth Thimothee blamed the iconic restaurant’s demise on, among other factors, the increased minimum wage. But given that the Massachusetts tipped employee minimum wage now sits at a low $4.35, there’s likely more to it than that.
Meanwhile, Florida’s minimum wage just saw its largest increase in seven years. On New Year’s Day it jumped by 21 cents, or 2.5 percent, from $8.25 to $8.46 an hour. Thanks to an inflation-adjusting constitutional amendment approved in 2004, a state minimum wage higher than the existing federal minimum of $7.25 became guaranteed.
The minimum wage for tipped employees rose to $5.44 an hour, up from last year’s $5.23.
Though that exceeds many other states’ minimums, it isn’t enough to cause local restaurant owners much alarm — nor is it enough for many workers to pay the rent.
According to Gatorz Bar & Grill and Downtown Gatorz owner Doug Harris, “It doesn’t concern me at all because the increase was not that much.”
Bob Overholser of Venice’s Gold Rush BBQ and Wael Dubbaneh of Wally’s Southern Style BBQ in Port Charlotte reported that the increase won’t really have any impact on their businesses.
“Food costs have more effect on us than anything,” said Dubbaneh.
Although the Florida state minimum wage is now $8.46, different wage rules apply to the restaurant world’s tipped workers, including not only servers but also hosts, bussers, bartenders and food runners.
Florida law allows the employer to take what’s called a tip credit, which allows counting all or part of an employee’s tips toward the employer’s minimum wage obligations. In other words, the employer gets to count some tips as if they were paid directly to the employee.
Florida Department of Economic Opportunity representative Hans Dettling, from CareerSource Southwest Florida, explained, “If employees do not get tips, the employer has to pay $8.46. But if they are tipped, Florida law allows the employer to take a so-called tip credit of $3.02 an hour in order to pay a lower cash wage than standard Florida minimum.”
Thus, many tipped employees in Florida will now receive a wage of $5.44 per hour, for total minimum compensation of $8.46 per hour (including tips).
For instance, if Jeannie receives no tips during one hour of her shift, her employer is legally obligated to make up the difference, ensuring that her wage for that hour is at least $8.46.
Nevertheless, for many employers, making up the difference isn’t an issue, because they pay more than the minimum to begin with.
Dettling reported, “I see very few minimum-wage jobs in our job orders from restaurants, except for fast food and the food court at the mall. Even dishwashers quickly move above minimum wage if they work out. (Untipped) back-of-the-house staff are already paid higher wages. Fry cooks start at $10 or $12 an hour.
“So, when employers ask us what a good starting wage is, we tell them $10, to be competitive. We see people leaving jobs to earn 25 cents more.”
That sort of job mobility accompanies low unemployment rates. The Charlotte County unemployment rate stood at 3.5 percent in November. Sarasota County was even lower, at 2.9 percent, and Florida overall was 3 percent.
“We have many open jobs but no warm bodies,” said Dettling. “People are already working, and employers need to offer perks or higher wages to attract and retain good employees.”
Harris agreed. “I pay some of my employees more than minimum because I believe a happy employee makes for happier service and a better environment.”
River City Grill and Italia owner Doug Amaral said, “Everybody who works for me is worth more than minimum wage. And 75 percent of my staff has been with me most of the time I’ve been in business.”
According to Laurie Farlow, co-owner of Englewood’s Farlow’s on the Water, “We strive to hire qualified candidates, so minimum wage doesn’t factor into our staff working strictly for an hourly wage. We’ve been above that wage for several years.”
Dettling concluded, “I don’t see much impact at all at this point. I was in the Seattle area when the minimum wage went up to $15 and businesses feared they’d have to lay people off. But that never materialized.”
The flip side, for employees, is less encouraging.
According to the National Low Income Housing Coalition’s “Out of Reach 2017” report on the high cost of housing nationwide, Charlotte County workers must earn $16.88 an hour to afford a two-bedroom rental, without spending more than 30 percent of their income.