McDonald's CEO Wants Conversations to Raise the Minimum Wage and Calls for Doing Away With the "Sub-Minimum Wage" That Forces Workers to Rely on Tips.

McDonald’s is criticizing the restaurant industry for allowing tipped wages, which let managers pay servers less than the minimum wage as long as customer tips make up the difference.

McDonald’s Chairman and CEO Chris Kempczinski said in an interview on CNBC Tuesday that he supports President Donald Trump’s efforts to eliminate federal taxes on tips. But since McDonald’s workers don't earn tips, the policy doesn’t help them.

Kempczinski also noted that in many states, sit-down restaurants are allowed to pay servers as little as $2.13 per hour, a federal minimum set in 1991, with tips making up the rest of their pay.

“So right now, there’s an uneven playing field. If you are a restaurant that allows tips or has tips as part of your equation, you’re essentially getting the customer to pay for your labor and you’re getting an extra benefit from no taxes on tips,” Kempczinski said.

Seven states – including California, Nevada and Minnesota – require restaurants to pay their servers a minimum wage before tips are added. Kempczinski said that policy helps lower poverty levels and employee turnover.

“We just need to do that, I think, across all 50 states. And we’ve said repeatedly, we’re open to conversations on raising the federal minimum wage,” Kempczinski said.

https://abcnews.go.com/Business/wireStory/mcdonalds-criticizes-us-restaurant-industry-uneven-wage-policies-125305630

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RedBaron · M

Seems to me that he’s free to put money in place of words and institute such rules for McDonald’s franchises without any laws being changed.

And since many tipped employees don’t have high enough income to owe income tax, no tax on tips doesn’t do squat for them.

beckyromero · 36-40, F

@RedBaron

Seems to me that he’s free to put money in place of words and institute such rules for McDonald’s franchises without any laws being changed.

Sort of. Except that McDonald's apparently already pays more than the minimum.

He's talking about making restaurants that pay the sub-minimum have to pay at least the federal minimum instead of basically having customers pay most of the workers' income (via tips).

Most tipped employees (about 63%) do make enough to have to file (although some of them may qualify for credits to lower or eliminate their tax liability).

RedBaron · M

@beckyromero But that means more than a third don’t, so no tax on tips disproportionately benefits higher earners, like those who wait tables at higher end restaurants, for example.

beckyromero · 36-40, F

@RedBaron

disproportionately benefits higher earners

Why? Because they are just scraping by over the poverty level?

We need to EXPAND the safety not and reduce or eliminate taxes for those at or just above the poverty level (and raise the income defining poverty level), not worry about that someone already struggling may be getting a bigger tax break than someone struggling even more.

RedBaron · M

@beckyromero Because eliminating taxes on tips does little to expand the safety net for those who need it most.

beckyromero · 36-40, F

@RedBaron

So, don't help SOME people who NEED help until people who need help even more are helped. 🙄

RedBaron · M

@beckyromero Only by your logic. Don’t put words in my mouth.

beckyromero · 36-40, F

@RedBaron

Well, you tell me.

Do you wish to deny the tip tax break to people that make tips?

RedBaron · M

@beckyromero Why would I? I was just making a point that it’s a flawed notion.

beckyromero · 36-40, F

@RedBaron

YOU say it's a flawed notion but without being able to elaborate on your stance.

And you still can't say whether you favor denying the tip tax break to people that make tips?

RedBaron · M

@beckyromero Unlike you, I don’t enjoy arguing ad nauseam until the issue is driven into the ground.

But whatever floats your boat.

beckyromero · 36-40, F

@RedBaron

You're the one looking for an argument since it was you who posted a disagreement with my original post.

RedBaron · M

@beckyromero And there you go with your ad nauseam thing again.

beckyromero · 36-40, F

@RedBaron

And there you go with your ad nauseam thing again.

Translation: you’ve run out of arguments but still want the last word. Classic.