In 2021, an amendment to raise the federal minimum wage to fifteen dollars an hour and phase out the subminimum wage for tipped workers was attached to President Joe Biden’s pandemic-relief package. But the Senate parliamentarian removed the proposal from the bill, on procedural grounds. Bernie Sanders, then the Budget Committee chairman, forced a vote on the bill anyway, with the provision included. This decision sparked a furor among supposedly liberal lawmakers, according to Ari Rabin-Havt, Sanders’s legislative director at the time. “I got such an incoming of shit, like nothing else I’ve ever gotten, from Democratic legislative directors about how dare I force their bosses to take this terrible vote,” Rabin-Havt recalled. “I’m talking four-letter-word screaming—stuff I didn’t even get when we were doing something on Israel that people didn’t like.” The source of the rage wasn’t the raising of the federal minimum wage, a proposal that had broad support, but eliminating the subminimum wage for tipped workers and potentially incurring the wrath of the National Restaurant Association. In the end, seven Democrats and an Independent voted against the bill—among them Joe Manchin, of West Virginia, and Kyrsten Sinema, of Arizona—and the legislation was defeated, 58–42. A few weeks later, Manchin and Sinema spoke at the N.R.A.’s annual public-policy convention.
The outsized power of corporate lobbies is often attributed to their vast financial resources and to the absence of meaningful restrictions on campaign spending since the Supreme Court’s Citizens United decision, in 2010. According to the nonprofit OpenSecrets, which tracks money in politics, the N.R.A., during the 2024 election cycle, disbursed nearly a million dollars to various PACs, party committees, and candidates, money that flowed to both Democrats and Republicans. But this isn’t the real source of the group’s power, Rabin-Havt said. “What makes them uniquely powerful is they have a grassroots network of members and supporters,” he said. “Everyone has restaurants in their districts. And all these elected officials are on the road a ton, so they’re in these restaurants, and they use them to host fund-raisers.” The N.R.A. knew, he said, that politicians were afraid of alienating these crucial constituents. “It’s very good at politics,” he conceded.
Few people have clashed more frequently with the National Restaurant Association than Saru Jayaraman, the founder of the U.C. Berkeley Food Labor Research Center and the president of an advocacy organization called One Fair Wage. As this name suggests, the group favors eliminating subminimum wages, a goal that it has tried to advance in numerous states, including Arizona, where it led the drive to place the One Fair Wage Act on the ballot last year. The proposal never made it to the referendum stage, because the Arizona Restaurant Association filed a lawsuit challenging the validity of signatures collected in support of the idea. The alternative pushed by the A.R.A. did appear on the ballot, after Republicans on the House Commerce Committee approved it, in a party-line vote.
It was a striking illustration of the restaurant lobby’s influence; nevertheless, Arizona voters ended up rejecting the industry-backed measure, by a three-to-one margin. Jayaraman sees this as a sign that, for all the N.R.A.’s resources and connections, resistance to its agenda is growing. She has been a leader in this area since 2002, when she co-founded an organization called the Restaurant Opportunities Center to help workers who had been employed at Windows on the World, a restaurant in the World Trade Center, after 9/11. The organization was soon flooded with appeals from servers at other restaurants who complained about more systemic problems—wage theft, sexual harassment, paltry pay. Jayaraman, who is Indian American, attributes the pervasiveness of some of these problems to gender and race. The idea of tips as a substitute for wages is “a direct legacy of slavery,” she said when we met at a Mexican restaurant in the East Village. After emancipation, the practice flourished at firms such as the Pullman Company, which hired formerly enslaved men as porters but declined to pay them a salary, causing them to rely on handouts from white customers. It’s no coincidence, Jayaraman said, that immigrants and Black people are overrepresented among the ranks of tipped workers today. So, too, are women, whose dependence on tips makes them vulnerable not only to harassment but also to discrimination. In a recent book, “One Fair Wage: Ending Subminimum Pay in America,” Jayaraman cites a study revealing that, in New York, Black women at dining establishments earn eight dollars an hour less than their white male peers, in part because customers tip them less.
The restaurant where we met is called La Palapa. Jayaraman said that she chose the place because it’s an establishment that pays employees a living wage, which, she argues, is not only fair but also good for business. (The restaurant’s owner, Barbara Sibley, agrees; she told me that eliminating subminimum wages had significantly reduced staff turnover.) During the pandemic, many workers at restaurants with less enlightened owners quit their jobs, Jayaraman noted, signalling their frustration with the low and erratic pay. Cities such as Chicago have since passed legislation to phase out the subminimum wage. “We are in a worker-power moment,” Jayaraman said. “Finally, we are winning.”
But, as she acknowledged, one of the N.R.A.’s most effective tactics has been persuading restaurant workers that “winning” entails defeating the agenda of organizations like hers. Last year, a canvasser named Mitchell Gaynor became aware of this strategy while campaigning for the passage of Ballot Question 5, a Massachusetts proposal to raise the base pay of tipped workers from $6.75 an hour to $15 an hour—the state minimum wage—by 2029. Gaynor, who grew up in a working-class household in the North Shore region of Massachusetts and has often worked in restaurants for meagre pay, figured that it would be easy to persuade his peers to back the proposal. Instead, he “lost friends over this,” he said, as many servers became convinced that approving Question 5 would force restaurants to raise prices so high that customers would either stop tipping or stop eating out. This was a message crafted by the Massachusetts Restaurant Association—which, like all the state groups, has a written agreement with the N.R.A. that reflects a shared mission. The notion was often relayed to tipped workers directly by their bosses. One waitress told me that the owner of her restaurant pulled servers aside before a shift and urged them to “get the word out to vote no on Question 5,” so that their tips wouldn’t be taken away. In some restaurants and bars, signs saying “Vote No on 5” were hung in prominent places, to insure that customers got the message, too. Another waiter sent me photographs of the checks that he and his co-workers were handing out to diners. “Your Crew Votes ‘NO’ on Question 5,” they stated at the top. (The waiter voted yes, a fact that he hid from his boss.)
The N.R.A.’s Massachusetts campaign was a huge success. In a liberal state where Elizabeth Warren, one of the Senate’s fiercest champions of labor, cruised to reëlection, nearly two-thirds of voters rejected Question 5. “We got our asses kicked,” Gaynor said.
I recently visited the N.R.A.’s headquarters, in Washington, D.C. Sean Kennedy, the executive vice-president of public affairs, told me that it’s entirely reasonable for bartenders and waitresses to fear that eliminating the “tip credit”—the difference between the minimum wage and their base pay—will be detrimental to their interests. Kennedy has a polished manner and a fluency with social policy that was honed on Capitol Hill. He was an aide to the former Democratic Missouri congressman Dick Gephardt and a special assistant for legislative affairs to President Barack Obama before becoming a corporate lobbyist. Kennedy told me that, if labor costs suddenly tripled, restaurants would need to either raise prices (which could lead customers to tip less) or hire fewer people. Both scenarios would harm the servers whom the policy was designed to help. Question 5 in Massachusetts and similar measures elsewhere have not failed because of the restaurant lobby, he insisted, but because owners and employees “recognized what was at stake and engaged their local policymakers to say, ‘This is a bad idea.’ ”
Kennedy continued, “Every business economist has said that, if you raise the minimum wage, there’s going to be a reduction in jobs that’s going to be particularly intense in labor-intensive industries.” For much of the twentieth century, this was indeed the prevailing view among economists. But in 1994 the American Economic Review published an article that challenged this belief. Its authors—David Card, who would go on to win a Nobel Prize for his research on labor markets, and Alan Krueger, then a professor at Princeton—tracked the employment levels at fast-food restaurants in New Jersey before and after the state raised its minimum wage, then compared these data with the situation in neighboring Pennsylvania, where the minimum wage hadn’t changed. They found “no indication that the rise in the minimum wage reduced employment.” In 2010, a team of economists examined three hundred and sixteen pairs of counties on the opposite side of state borders where, during a period of sixteen and a half years, the minimum wage rose on one side but not on the other. They, too, found no adverse employment effects.
Michael Reich, a labor economist at U.C. Berkeley who co-authored the 2010 study, told me that most economists today no longer believe that raising the minimum wage will substantially reduce employment among low-wage workers. Doing so will cause restaurant prices to rise, he acknowledged, but the change will be far smaller than many people assume, in part because raising the minimum wage often lowers the cost of recruiting and retaining workers. In a recent policy brief, Reich examined the effects of California’s adoption, in 2024, of a twenty-dollar minimum wage for fast-food workers, a policy that the N.R.A. strenuously opposed. He found that the measure has led to price increases of less than two per cent—roughly six cents on a four-dollar hamburger. In February, Reich’s analysis was cited, misleadingly, by the Employment Policies Institute, which opposes raising the minimum wage. A blog published by the group quoted a sentence in which Reich made note of “a very small negative employment effect” from California’s wage increase. It didn’t quote the next line of the study, which explained that, when a statistical method controlling for trends in related industries and other variables was used, there was no decline in employment. The Employment Policies Institute has received funding from the N.R.A. and was founded by Richard Berman, a retired lobbyist and public-relations executive who specialized in creating nonprofit organizations that served as fronts for corporate clients, including the tobacco, alcohol, and restaurant industries.
Michael Reich’s research focusses on the fast-food industry, not on independent, full-service restaurants. Such businesses would be more endangered if the tip credit were eliminated, Kennedy told me. But the claim that they would go bankrupt if they had to pay waitstaff and bartenders the full minimum wage is belied by the fact that seven states, including Alaska, Minnesota, and California, already require restaurants to do this. Sylvia Allegretto, a labor economist who studies the minimum wage, noted that people still eat out (and tip) in those states: “I’m here in Oakland, where the restaurant industry is booming and everyone tips.”