Supporting Restaurant Workers

Rick Hamada
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Wednesday - November 04, 2009

Zagat’s, a well-respected and well-read travel publication, found recently that Hawaii ranks as one of the worst states when it comes to tipping servers in restaurants. But the differential between here and the best tipping metro areas is a scant 1.2 percent (18.4 percent of the check for Hawaii and 19.6 percent for St. Louis and Philadelphia). Although these types of stories are valuable, usually news coverage about restaurants is relegated to “Best Restaurants,” hot spills or trans-fat bans.

The restaurant industry, however, plays such an important and vital role in our economy. According to the National Restaurant Association, one in 10 Americans works in the industry. We spend, on average, 48 percent of our food budget in restaurants. Nationally, the restaurant business will generate more than $560 billion in sales. Pretty substantial numbers, wouldn’t you say?


 

In Hawaii, there are more than 3,000 dining and drinking establishments employing around 82,000 people, representing approximately 13 percent of our labor force. Hawaii restaurant sales are projected to tally more than $3.2 billion in sales, ranking it among the top performing industries in our state.

Economically speaking, for every dollar spent in Hawaii restaurants, an additional 94 cents is generated, and for each additional $1million spent in dining and drinking establishments, 26.1 jobs are created. These impressive numbers are tempered by the fact that most restaurants are operating on a razor-thin budget. According to the Hawaii Restaurant Association, the average profit margin is approximately 4 percent.

That’s why the NRA and HRA are so acutely aware of legislative issues. Tax increases, minimum wage increases and a debilitating tip credit statute traditionally top the list of concerns. But attempts to hyper-regulate the industry pose a threat to restaurants, too. Menu information mandates, tobacco issues and complicity in promoting obesity are of concern. Universal healthcare and unemployment insurance taxation will inevitably be invoked as well. Each of these issues and the consequent legislative proposals could do irreparable damage to an essential element of our overall economy.


During these challenging economic times, I heartily urge our political leaders to resist increasing taxes, implementing fees or raiding funds to “fix” our economy. There are many in the hospitality business simply trying to survive and any additional financial demands may be the proverbial “straw” to break their backs. Politically speaking, there are 80,000 votes associated with the dining and drinking industry in Hawaii. I am certain any attempts for a money grab that will harm them will not go unnoticed.

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