POLL: Celebs, Unions Fight to End Tipped Wages

"Hanoi Jane" and other celebrities are joining forces with unions demanding a minimum wage hike for waitresses and other tipped workers.

Texas is among 43 states that follow the federal minimum wage of $2.13 an hour for tipped employees.

“That's not a wage! That's barely enough to buy a large cup of coffee,” actress Jane Fonda has said.

The ones being hurt they say, are woman and minorities.

But Jonathan Horowitz, CEO of Houston's Legacy Restaurants, says higher-minimum activists ignore one important fact.

“They're just looking at the base-rate of pay, what they're not realizing is that the folks who work in successful restaurants make $20, $30, $40 an hour,” he says.

The last time New York City raised its minimum wage, 270 restaurants closed.

“The first thing they try to do is pass the cost onto the consumer by raising their menu prices, and that has a negative effect on the dining public and they go elsewhere,” says Horowitz.

Horowitz says that why most restaurants that eliminate tipping, eventually go right back to it. “It's too difficult in an industry with very small margins to begin with to be increasing the rate of pay so dramatically.”

The Employment Policy Institute found that in San Francisco, there was a 14-percent increase in restaurant closures for each dollar increase in the minimum wage.

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