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A week and a half after the Senate rejected an effort by Vermont independent Bernie Sanders to attach a minimum wage increase to a coronavirus relief package, his neighboring Democratic senators, Jeanne Shaheen and Maggie Hassan, gathered with constituents for a teleconference.
The New Hampshire senators were joined on the March 15 call by Tom Boucher, who was recently appointed to the board of the National Restaurant Association, known in Washington as “the other NRA.” Boucher also serves as a trustee on the association’s Education Foundation and is CEO of Great NH Restaurants, Inc. Boucher laid out for the senators just how perilous the past pandemic year had been for the restaurant industry and profusely thanked them for their help in thwarting the minimum wage increase, telling them they had prevented countless restaurants from closing down.
Democratic state Rep. Maria Perez said that, during the call, she was stunned by how similar Boucher’s rhetoric sounded to that of the senators and that she had heard the same arguments coming from their staff when she had lobbied them to support a wage increase. “The language that I heard from the senators is the same language I heard from the Restaurant Association,” Perez said.
Central to the National Restaurant Association’s argument, as parroted by Shaheen and Hassan, is that workers themselves, particularly ones who rely on tips, are strenuously opposed to increasing the minimum wage, worried it will mean fewer shifts or put businesses at risk of closure. In their view, this opposition applies especially to the tipped minimum wage, which allows businesses to pay a lower wage to workers who get a significant portion of their pay through tips. (The federal tipped minimum wage is $2.13 per hour.)
James Haslam, executive director of Rights & Democracy, a local progressive organization which operates in both New Hampshire and Vermont, said that Hassan’s and Shaheen’s staff have told him repeatedly that they have gotten a high volume of letters from service industry workers opposed to raising the tipped wage. Haslam said the senators appear not to understand, or willfully misunderstand, that employees in the service industry are under intense pressure to repeat the talking points of their bosses. There are essentially no unions for service staff, and restaurant bosses have an extraordinary ability to make or break a server, both through the power of scheduling — Saturday night and Tuesday afternoon are likely to bring much different paydays — and the power to assign servers to particular sections, some of which are far more lucrative than others.
“In an industry that’s nonunion, there’s almost every incentive to do what your employer says,” Haslam said. “Every single advancement of workers’ rights, going all the way back to slavery, has always been opposed in these terms: that it’s going to be worse for workers.”
But the recent elevation of the minimum wage into a major national issue is altering that dynamic. Haslam said that in a meeting last week, Shaheen’s staff conceded that they were also hearing from a high number of service industry workers who disagreed with their bosses and supported raising the tipped minimum wage.
Managers have long been known to exploit their power to prey on staff, and they can easily deploy it toward political ends. If sending a letter to Congress opposing a minimum wage increase might lead to a better schedule and section — and if refusing might bring the opposite result — the decision isn’t a hard one for a server on an individual basis. After all, a smart server would likely presume the letter would be discounted anyway by a senator who should know better than to trust the validity of a public comment made under such conditions. That server may be presuming more savvy on the part of their representatives than exists in reality.
The minimum wage in New Hampshire sits at $7.25 an hour. In 2019 and again in 2020, the state’s legislature tried to raise it, to $10 an hour the next year and $12 an hour in three years. Gov. Chris Sununu vetoed the bill each time, arguing to his libertarian-leaning base that “artificial increases in the minimum wage hurt the lower-wage workers an increase is aimed at helping, because businesses may be forced to reduce hours or eliminate jobs entirely.”
Business owners looking for a champion who will fight against minimum wage increases could do little better than Sununu. He’s assured of significant support from the restaurant owners who make up the National Restaurant Association, as well as other companies that have waged war on the wage hike. But workers looking for a similar champion on their side have no obvious option.
Hassan is up for reelection in 2022, and national Republicans hope she’ll face Sununu, who is riding a wave of popularity in response to his handling of the pandemic. He was reelected as governor in 2020 with 65 percent of the vote.
People familiar with New Hampshire’s insular politics say that Sununu, the brother of former Sen. John Sununu, has long made clear that he has zero interest in going to Washington. But the governor is under intense pressure to help Republicans take back the Senate, and a recent poll found him with a 51 percent approval rating among Democrats in the state. The same survey had him edging out Hassan in a head-to-head match. Democrats control the Senate by just one seat, and both Mark Kelly, D-Ariz., and Raphael Warnock, D-Ga., face reelection next year.
Since the Civil War, New Hampshire’s Senate seats have, with a few exceptions, been in the hands of Republicans. The pattern broke in 2008 when Shaheen ousted then-Sen. John Sununu, scion of a local political dynasty, and fully busted in 2016, when Hassan, the state’s outgoing governor, won her narrow election against Kelly Ayotte. Ayotte, who lost her reelection bid to Hassan by just over 1,000 votes, has not ruled out a rematch.
In the Democrats’ barely controlled Senate, Sanders’s amendment to the coronavirus relief package garnered 42 votes: 8 short of the number needed for a majority. Some of those votes — such as the two Delaware senators — would have been easily gettable by President Joe Biden if he’d tried. Others, such as Kyrsten Sinema of Arizona and Joe Manchin of West Virginia, have long been known to be skeptical of raising the wage. The two holdouts from New Hampshire were the hardest to explain.
Sinema, Manchin, and Sen. Mitt Romney, R-Utah, are currently pushing a slimmed down proposal to raise the federal minimum wage to $11 an hour. Both Sinema and Manchin spoke at the National Restaurant Association’s annual conference this week, and both share a fundraiser, Ashley Flanagan Kennedy, who is married to Sean Kennedy, the top lobbyist for the National Restaurant Association.
Sean Kennedy was a longtime aide to Rep. Dick Gephardt before becoming a telecom lobbyist. He swung back through the revolving door to work for then-Sen. Claire McCaskill, D-Mo., an early supporter of Barack Obama’s 2008 presidential campaign, and then served Obama as special assistant to the president for legislative affairs. His charge now is to help the restaurant association block a minimum wage increase.
Flanagan Kennedy, a West Virginia native, is a partner at the fundraising firm Fulkerson Kennedy & Company, which, according to FEC records, works nearly exclusively for Senate Democrats and has pulled in millions in fundraising consulting fees since 2017.
The firm has done recent fundraising work for the Democratic Senatorial Campaign Committee, in charge of reelecting Senate Democrats, as well as its affiliated super PAC, Senate Majority PAC. (Consulting for both the DSCC and the Senate Majority PAC requires strict legal guardrails, as the two are not allowed to coordinate.)
Fulkerson Kennedy & Company has also recently fundraised, records show, for Manchin, Sinema, and Hassan, as well as Michigan Sen. Gary Peters, who is chair of the DSCC.
The firm also does fundraising for Granite Values PAC, which is Hassan’s leadership group; a PAC affiliated with Manchin called Country Roads; and one tied to Sinema called the Getting Stuff Done PAC.
On March 31, Sean Kennedy contributed $2,000 to Hassan’s reelection campaign. On December 20, he gave the maximum allowable amount, $2,800, to Sinema.
At the National Restaurant Association’s conference this week, Kennedy heaped praise on Sinema and Manchin. “You and your staff have been absolutely amazing in working with small businesses, including the National Restaurant Association, in finding a commonsense path, so we can wrap up that aspect by just saying thank you,” he said.
The fight to raise the minimum wage nationally to $15 is moving in parallel, and at times in tandem, with the related push to phase out the sub-minimum wage. While the tipped minimum is the most well-known sub-minimum wage, current labor law also allows companies to pay some workers with disabilities less than the full minimum wage. Defenders of the policy say that it encourages companies to hire disabled workers who would otherwise be unable to compete against able-bodied ones, giving them an independent source of income and a way to participate more fully in society. Opponents cite the law’s patent exploitative potential.
When it comes to the question of raising the tipped wage, service industry workers are not monolithic in opinion. Like in all industries, particularly nonunionized ones, some workers do far better under the status quo than others. Servers who pocket hundreds of dollars in a four-to-six-hour shift would see no increase in their paycheck if the underlying wage were increased. Under current law, restaurants are supposed to make up the difference between the sub-minimum wage and the standard minimum if tips don’t cover it. For many servers, that isn’t necessary — but when it is, the law is rarely enforced.
Managers also use the sub-minimum wage law to squeeze nonservice work out of their wait staff, scheduling workers to arrive several hours before a restaurant opens, for instance, to perform so-called side work. Labor laws allow bosses to require some basic preparatory work, but managers routinely stretch its definition far beyond that, putting servers to work doing custodial or other tasks that ought to be paid at a full minimum wage. Because a server can make well above the minimum wage when business is bumping, managers get away with making them work additional hours essentially for free to reduce their average hourly pay.
The effort to phase out the tipped wage has received far less national attention than the fight for $15, and given the skepticism of holdouts like Shaheen and Hassan, it’s not hard to see service staff getting stiffed in a final compromise — if one is ever reached.