Restaurant owners are raising new concerns about proposed legislation to increase the state’s minimum wage without accounting for tip income.
The Minnesota Restaurant Association released results of a survey today that shows 90 percent of its members would increase menu prices, 77 percent would reduce staff hours and 69 percent would postpone making investments in their businesses if such a measure becomes law.
Pizza Luce CEO J.J. Haywood, who serves as the group’s president, said it supports the creation of a new minimum wage tier for tipped employees that would keep them at the current federal minimum wage of $7.25.
“The reason for this is that tipped employees make more than the minimum wage,” Haywood said. “Statewide, our tipped employees in our industry make $18 an hour, and here in the metro they make $22 an hour, which is far above the minimum wage proposals that are on the plate right now.”
The restaurant association’s proposal would affect employees earning at least $12 per hour including tips. Employees earning less than that would receive the new state minimum wage rate.
But the chief sponsor of the House minimum wage bill said he’s not interested in what he views as a “tip penalty.” Rep. Ryan Winkler, DFL-Golden Valley, estimated that a new minimum wage of $9.50 per hour would result in a raise for about 400,000 Minnesotans, including the tipped employees in restaurants.
“If more people get raises, including their waiters and waitresses, more of those people are going to be able to spend money in businesses like restaurants,” Winkler said. “The overall increase in spending more than offsets the increases in cost to businesses.”
Winkler’s bill also provides for automatic, inflationary increases in the state minimum wage. He said it will make for a predictable, steady change.