Is it a good idea to raise the tipped minimum wage? Some legislators in Delaware have discussed the idea, but a recent article in the Wall Street Journal provides a cautionary tale on the unintended consequences of this idea.
Mr. Mosley and Ms. Tucker had planned to print new menus with higher prices to cover the food costs, but the September wage hike complicated those plans, in particular because the increase covered both tipped and non-tipped employees.
Handling this one-two punch of new costs presented Mr. Mosley with conflicting goals: raising prices and boosting customer traffic. … But with the higher wage costs, the arrangement was no longer feasible, and Tastes of Life closed on Sept. 28.