Wage hike is tipping point for restaurants

In February many of us were featured in a Crain's cover story as female entrepreneurs who were instrumental in Harlem's restaurant renaissance. The story provided concrete examples of the success of the area's minority- and women-owned businesses. Unfortunately, that status is now being threatened.

Hollywood celebrities are pressuring Gov. Andrew Cuomo to eliminate the tip credit that restaurants can apply against the regular minimum wage when they pay tipped workers. As Cuomo holds public hearings on this across the state, he ought to value our voices as well. The credit allows us to manage costs when our servers and bartenders earn more than the full minimum wage in wages and tips combined—as they often do by large margins. If that compensation falls short, we have to make up the difference so no one is earning a sub–minimum wage.

Running a restaurant in New York City is beyond expensive. We deplete our savings and mortgage our homes in hopes of establishing model businesses in our community. In Harlem, the cost keeps going up. The tip credit has helped us open and sustain our restaurants.

We didn't start our businesses just to make a profit but also to offer great hospitality and food that nourishes our neighbors' souls. We want to set a positive example for other women as well as Harlem's youth so they may see their future selves in every meal served. Part of our mission is to create job opportunities for our residents. They are young and old, college-educated and GED recipients, immigrants and the formerly incarcerated—all of whom deserve opportunity in their backyard of Harlem.

Many of us capitalized on the lower commercial rents in Harlem to find a storefront and bootstrap the rest until we were able to get the cooking gas turned on. Unsurprisingly, because of our success and other forces, rents have risen, making it more challenging for others from the neighborhood to do the same. Once you do get your doors open, you can embrace the competition and the day-to-day grind of running a small business. However, the red tape, laws and regulations make it much more expensive and complicated to survive, let alone thrive.

Putting aside those challenges, we're proud that our tipped workers earned a living wage before the governor increased their base wage 100% over the past three years. During that same period, he reduced our tip credit three times. If Cuomo eliminates our tip credit completely, we would need to reevaluate the existence of our businesses. We are already reducing employee hours and positions to keep our doors open.

Some people claim the practice of tipping results in harassment of workers by customers and employers. We don't agree that eliminating the tip credit will effectively address such unacceptable behavior. We do, however, believe that losing the credit will put our restaurants and the jobs of our fellow women and minorities in jeopardy.

Many restaurant and bar owners would consider banning tipping and raising menu prices in an attempt to stay afloat, but that would result in some servers earning less than they do now.

Rather than take our employees' gratuities, the governor should accept a tip from this group of successful minority and female business owners and save the tip credit.

Signatories

Christy LoPresto Babbalucci

Markisha Swepson BLVD Bistro

Alya Horsford Cove Lounge

Tiffany Bowen Harlem Hookah

Jelena Pasic Harlem Shake

Sheri Wilson Harlem Tavern

Susannah Koteen Lido Harlem

Melba Wilson Melba’s Restaurant

Camaron Fagan Row House

Mona Birjeeb Safari Restaurant

Leah Abraham Settepani