Workforce

Union group urges New York to make ending the tip credit a campaign issue

One Fair Wage said its research shows young residents would be more likely to vote if the issue hung in the balance.
One Fair Wage says young people would come out to vote if the tip credit were at stake. | Photo: Shutterstock

The union-backed group One Fair Wage wants a discontinuation of New York’s tip credit to become a campaign issue in the lead-up to the state’s general elections in November.

The labor advocate released survey data Wednesday that shows that young potential voters in the state worry more about the cost of living than they do about any other political or social issue, including gun violence and the impact of student loans. The issue was cited as a concern by 53% of the respondents.

The research also verifies that the restaurant industry employs more individuals aged 16 to 24 than any other trade in the state.

For those reasons, One Fair Wage concluded, support of killing the state’s tip credit would appeal to the young voters whom pollsters fear will sit out the election this year. Democrats in particular have voiced concerns about young people, a traditional constituency of the party, opting not to vote.

“The need to respond to youth voter concerns, ensure that young workers obtain livable-wage employment, and provide restaurants with desperately needed staff could result in a win-win solution, but only if the industry’s long history of poverty wages is addressed,” stated the group’s research report, entitled “A Fork in the Road.”

“Young voters are not motivated. In fact, in talking to young restaurant workers across the country, what we are hearing is very disheartening,” said Saru Jayaraman, the president of One Fair Wage. “They are not motivated. They’re angry. They’re frustrated. If we want people to turn out for voting, you have to address their concerns.”

Her comments seemed directed at Democrats in the state, who have controlled the governorship and both chambers of New York’s legislature for eight years. If they were to campaign on a promise to kill the tip credit, Jayaraman appeared to be suggesting, they could maintain their party’s dominance.

She noted that One Fair Wage and its benefactor, the Service Employees International Union, or SEIU, has been trying for at least seven years to kill New York’s tip credit.

Yet the research seemed in places to undercut the group’s assertion that calling for an end to the tip credit would be good politics. For one thing, survey participants weren’t actually asked about the tip credit and whether they wanted it to be killed. Rather, One Fair Wage equated the respondents’ concern about the high cost of living in the state with a desire to end the employer concession.

But the participants were indeed asked specifically about wages, which 28% cited as a concern, putting it second behind the cost of living on the list of their key issues. “In New York, 76% [of young people] support a wage increase of up to $20,” said Celinda Lake, the pollster whose Lake Research Partners conducted the New York survey for One Fair Wage.

Jayaraman and other One Fair Wage personnel did not comment on those findings.

In addition, the group spoke about people as young as 16 years of age. The voting age in New York is 18.

The research and the press event spotlighting it could also figure into ongoing challenges of One Fair Wage’s current status as a nonprofit group. Regulations state that the majority of a nonprofit’s activities cannot be politically focused. The group has maintained that its involvement in political issues like killing the tip credit is secondary to the training and research it conducts on behalf of hospitality workers, and that it’s entitled to the preferred tax status a nonprofit enjoys.

But in February, the Oversight and Responsibility Committee of the U.S. House of Representatives directed the Internal Revenue Service to turn over all correspondence with One Fair Wage as part of an investigation into the group’s tax status.

Separately, a pro-restaurant employer group called the Committee to Protect Tips asked election regulators on Monday to investigate One Fair Wage for violations of Massachusetts’ campaign regulations. The labor group acknowledged in a story by the Boston Globe that it will use a $2 million contribution from an anonymous donor to convince Massachusetts residents to kill the state’s tip credit via an initiative on the November ballot. Regulations forbid political campaigns from accepting anonymous donors.

An investigation into One Fair Wage’s support of a similar ballot initiative in Michigan has been requested by pro-employer forces there as well. The action alleges that One Fair Wage is serving as the front for anonymous donors who’d like to see the credit ended, a violation of campaign laws.

One Fair Wage has yet to respond publicly to the allegations.

But it has not denied its support for getting measures to kill the tip credit on the November ballots of Massachusetts, Ohio and Arizona, after falling in a similar effort focused on Michigan.  

Last week, Illinois’ legislature recessed without passing a proposal backed by the group to end the tip credit there. The legislation closely tracked a measure outlawing the employer break in Chicago. That bill is now law.

During Wednesday’s press conference, Jayaraman mentioned in passing that she’s confident Baltimore will follow the lead of Chicago and Washington, which started the phase-out of its tip credit in May 2023.

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