Article from Reason by Billy Binion.

Days after the House passed a bill to raise the federal minimum wage to $15 an hour, Rep. Rashida Tlaib (D–Mich.)—a member of the much-embattled “Squad” targeted by Pres. Trump—upped the ante: “Now I think it should be $20,” she said.

Tlaib was addressing an event spearheaded by the Restaurant Opportunities Center of Michigan and One Fair Wage, two organizations pushing for a higher minimum base pay for restaurant industry workers. While a $20 minimum wage would be problematic for a range of businesses, the restaurant industry, in particular, stands to lose the most from such proposals.

Employees at food and drink establishments typically work on a “tipped wage,” an hourly base rate that is lower than the minimum wage. Those workers can make up the rest of the hourly minimum wage in tips; if gratuities fail to bring an employee’s earnings to the equivalent of the minimum wage, employers are required to make up the difference. If employees make more than the hourly minimum wage in tips, they get to keep the extra income.

Not only does this model of pay give waitstaff the chance to accrue earnings above and beyond the minimum wage, but it also allows restaurants of every variety to stay above water. In an industry with profit margins around 6 percent, employees who make a lot of tips also help keep the doors open and the stoves running.

Read the entire article at Reason.