Economy

A Restaurant's New Fee Has People Talking About the Minimum Wage

February 14th 2017

By:
Danielle DeCourcey

A restaurant in Colorado just added a new line to its receipts and the addition is causing controversy. Corona's Mexican Grill in Bloomfield now has an additional charge on customers' bills: the "A70 Service Fee," a reference to a new law that's raising the state's minimum wage. 

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Last November Colorado voters approved Amendment 70, which will incrementally raise the minimum wage in the state to $12 an hour by 2020. When the law passed, the minimum wage was $8.31 an hour; on Jan. 1, it become $9.30 an hour. Tipped service employees, like restaurant servers, now make $6.28 an hour, set to rise to $8.98 by 2020. 

Instead of absorbing the cost into its menu prices, Lilith Marquez, general manager at Corona's Mexican Grill, told local Colorado station 9 News that she wanted customers to know where the increase on their bills came from.

"We want to let you know you're going to be charged this fee," she told 9 News. "There's nothing we want to hide."

Opponents of Amendment 70 argued that it would hurt small businesses and cause employers to cut jobs. 

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Advocates say Amendment 70 simply requires employers to pay employees fairly.

A full-time Colorado minimum wage worker in 2020 will make less than $25,000 a year before taxes, and tipped workers could possibly make even less. In June 2016, ATTN: reported on the amount minimum wage workers had to work each week to afford average rent prices. Before Amendment 70, minimum-wage employees had to work 80 hours a week to afford rent.

 One tweet by user @AliahSilvermane mocked the restaurant's A70 Service Fee, implying that the restaurant doesn't want to pay its employee's fair wages. 

Other people on Twitter agreed. 

Martin Shields, an economics professor at Colorado State University, an opinion piece in The Denver Post arguing that the incremental minimum wage hikes like the one in Colorado actually benefit the economy not harm it. 

"Minimum-wage increases are not job killers. Indeed, research shows that employment growth rates in states that have set higher minimum wages than the federal rate exceed those that haven’t," he wrote in September 2016. "After Colorado voters approved an even steeper minimum wage increase in 2006, more than 71,000 jobs were added statewide, including more than 6,000 in rural communities and more than 5,000 in the restaurant industry."

The federal minimum wage is $7.25 an hour and hasn't been raised since 2009.

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"We need to be honest – the current federal minimum wage is a poverty wage," Sen. Barbara Lee (D-Calif.) told ATTN: in November 2016. 

The Economic Policy Institute says if wages were raised to an "economically sustainable" $12 an hour across the country by 2020, 35 million workers would benefit, particularly tipped wage workers. 

"In states that have a sub-minimum wage for tipped workers, two-thirds of whom are women, these workers are twice as likely to live in poverty than the non-tipped workforce," wrote EPI in 2015. 

RELATED: What Will Donald Trump Actually Do About the Federal Minimum Wage?