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Restaurant Owners Make Stand Against Proposed Minimum Wage Increase

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(credit: CBS) Esme Murphy
Esme Murphy, a reporter and Sunday morning anchor for WCCO-TV, h...
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MINNEAPOLIS (WCCO) – Restaurant and resort owners were at the Capitol Monday, lobbying against the proposal to increase the minimum wage to $9.50.

They say most restaurant servers already make well over the minimum wage when you factor in tips. Some said the increase would force them to lay off employees and raise prices, and the owners are also trying to get lawmakers to carve out exceptions to the current proposed increase.

Restaurant owners want tips to be factored in, and they want a proposed cost of living increase thrown out. And they also want a lower minimum wage for teens and young adults, which, they say, would mean more jobs for young people.

Dick Henke has been the owner of the Malt Shop in south Minneapolis for the past 40 years, and he’s worried about the proposed minimum wage increase.

“We either have to raise our prices and figure out a way to absorb it, or we have to change our concept to a concept that requires less labor,” he said.

The current Minnesota minimum wage is $6.15 an hour. But the Malt Shop — like almost all Minnesota employers — has to pay its employees the federal minimum wage of $7.25. The proposed state increase would be to $9.50.

Server Kelly Olson worries a minimum wage increase would lead the Malt Shop to raise prices — a move she says hurt her bottom line.

“With tips and minimum wage I can make up to 25 bucks an hour,” she said. “With prices going up, people won’t be able to afford to go out.”

Also on Monday, hospitality industry employers packed a Capitol news conference demanding exceptions to the current bill. They want servers who currently earn $12 or more with tips to stay at the current minimum wage.

They say servers earning less than $12 an hour with tips could earn the new minimum wage.

However, the bill’s author, Rep. Ryan Winkler (D-Bemidji), says that is unlikely.

“The hospitality association has been pushing this tiered tip for the last year or so,” he said. “They didn’t have a lot of success last year, but I guess you can’t blame anyone for trying.”

Winkler says it’s more likely the hospitality industry may get one or even two other provisions they want. The first would be a cost of living index being taken out and a lower rate for teens and young adults being put in.

The legislature is expected to pass some form of a minimum wage increase this session. Gov. Mark Dayton says he will sign the measure.

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