Arizona Restaurant Association leader says Proposition 138 right move for service industry

PHOENIX — The head of the Arizona Restaurant Association believes Proposition 138 is right for the service industry and hopes the constitutional amendment passes in November.

Steve Chucri, the association’s president and CEO, told KTAR News 92.3 FM’s The Mike Broomhead Show on Thursday that Prop 138 is designed to keep the status quo for tipping culture while allowing restaurants to operate at lesser costs.

“It’s uniting not only the restaurant owners with the tipped workers, it’s making sure that we’re going to provide meaningful meals to our guests every day at the lowest cost possible,” Chucri said.

“We’re that industry of opportunity, we’re that industry of flexibility and that’s what makes us so unique and that’s why we need Prop 138 to pass.”

What is Proposition 138 in Arizona?

Prop 138 would allow tipped workers to be paid 25% less per hour than the minimum wage of $14.35 — $10.77 an hour — if any tips received were not less than the minimum wage plus $2 for all hours worked.

If the amendment doesn’t pass, tipped workers would remain able to earn $3 less than the minimum wage — $11.35 an hour — as long as take-home pay is at least the minimum wage plus $2 for each hour worked.

Arizona’s minimum wage has jumped $2.35 since 2020.

“It basically keeps the model the restaurants operate on as it relates to tip workers and then secondly guarantees that they’re going to make two dollars more than they currently are with tips in the minimum wage and it puts it in the state constitution,” Chucri said.

Chucri argued that most tipped workers want the amendment to pass.

“You’ve got tipped workers working at some of Arizona’s restaurants that have been there for 20 to 30 years,” Chucri said. “So if it was so bad, why would they not have already left?”

He added that if the amendment fails, it would force restaurants to adjust costs for patrons to remain in business, likely in the form of a surcharge.

“This is a very pennies-oriented business. Our profit margins are very, very minimal,” Chucri said. “So you’ve got to shift that cost and when you put it to a surcharge, guests don’t like it. They tip less, so it’s not good for the restaurant and it’s not good for the tipped workers.”

Who opposes Proposition 138?

Opponents argue that since tips are not required, a higher hourly salary would offset the uncertainty for workers.

Civic Engagement Beyond Voting, a grassroots nonpartisan organization, called the amendment an “insidious measure.”

“Tips are optional; a salary is not, which is why some restaurant owners continue to try to avoid paying a living wage to their employees,” the organization said. “This measure is yet another attempt by the Arizona Restaurant Association to undermine the Fair Wages and Healthy Families Initiative passed by nearly 60% of voters in 2016.”

Chucri said it’s the onus of workers to earn their tips and make more money for themselves.

“We don’t believe we should be entitled to tips,” Chucri said. “We’ve got to earn those tips and that’s another thing that Prop 138 maintains is that we’ve got to go and earn those tips for that excellent service and that excellent food quality in that nice atmosphere.

“That’s going to want to welcome you back each and every time you come through the front doors of our restaurants and that’s why it’s so important to us.”

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