A ‘Minnesota Nice’ way to roll back minimum wage?

Among the many mysteries of the universe is what “Minnesota Nice” actually means.

Typically, it doesn’t really matter, but the term was used in today’s Star Tribune to explain why a restaurant lobbying group is trying to get the state to roll back elements of last year’s minimum wage increase.

One restaurant owner in Lake City said the wait staff is making up to $18-$20 an hour (factoring in tips on top of the minimum wage), while the kitchen staff is making only minimum wage.

Under the increase that Dayton signed last year, Minnesota’s minimum wage rose to $8 an hour last August. This August it will rise to $9 an hour, and to $9.50 by 2016. Beginning in 2018, the wage will rise in yearly increments with inflation.

The Minnesota Restaurant Association’s proposal would cap the minimum wage for tipped employees, primarily servers and bartenders, at $8 an hour. That would stay in place provided that, once tips are factored for each two-week period, those workers earned a total of at least $12 an hour. If they didn’t, they’d get the full state minimum wage.

“It’s not cutting anyone’s pay. It’s a Minnesota Nice approach,” said Dan McElroy, vice president of the Minnesota Restaurant Association.

And therein lies the rub. For sure, there’s a debate to be had over the minimum wage. But at some point, can we declare for certain what we mean by “Minnesota Nice”? Is it the tendency to treat people nicely, or to say “have a nice day” when you actually want them to get hit by a bus because one has buried their anger?

Given the varying definitions of what Minnesota Nice is, what is the “Nice” way to address the issue?

Related: Minnesota Nice, explained (Minnesota Public Radio News).

  • Veronica

    What are the economics of a restaurant that make this such a big deal? I get that cutting wages is (sort of) a way to cut costs, but judging from the number of “Now Hiring” signs at restaurants and stores, those low-wage jobs just aren’t paying enough to fill the open positions.

    I actually was talking to the regional manager of a large chain who had a store with 6 employees when the minimum staffing level was considered 20 employees. He had to start raising wages above what corporate wanted to pull in applicants.

    • Is it possible for restaurants to require tips be pooled, thus ensuring the kitchen staff gets its fair share?

      • Veronica
        • Robert Moffitt

          Interesting. My experiences were in Indiana.

          • Veronica

            Crazy idea…change the law to allow it in MN.

        • One of my friends works as a server at a restaurant where tips are pooled, so either apparently some are still doing it even if the owners are not requiring it or the law is not being followed.

          • Veronica

            If you read the link above, it’s allowed if the staff decides to do it on their own.

      • Robert Moffitt

        It’s possible, and I have worked in places that have tried it. It never seemed to work too well. The servers feel cheated, there is always debate on who did the most work to deserve the tip.

      • Gary F

        In my bar/restaurant days, thirty years ago, the wait staff would sometimes throw us cooks a bone, but they always shared some tips with the service bartenders. Of course we gave better service to the wait staff that shared tips with us.

      • Kassie

        Victory 44 in North Minneapolis has a model where the kitchen staff are the front of the house staff too in order to address this issue.

        • Veronica

          It would be interesting to see how that’s working for them.

          • KTN

            Pretty well. They have been a fixture in our neighborhood for years now, and the offshoot, the guys who started at Victory and then went on to open Trevail and Pig Ate My Pizza use pretty much the same model.

      • Dave

        Is it possible to get rid of tips altogether?

        Eating out is already so annoying to me with the very loud music in many places and the arctic air that is aimed directly at your head. Then there’s the server who expects 20% no matter the quality of service. Then there are the questions: “Have you been here before? Yes? Welcome back! So you know how our menu works?”

        “Yes. I tell you what I want, and you bring it to me.”

        Here’s a radical idea. Restaurants could pay their employees a wage. Any wage minimum or higher; let market forces set the wage. Get rid of tips.

        • That sounds like French talk there…

          /And I agree.

        • kevinfromminneapolis

          I would gladly be done with tips if the prices were rolled into the menu.

        • Jerry

          But without tipping, how are creepy men supposed to reward the waitstaff for flirting with them?

          • You CAN still tip if you wish…it just wouldn’t be expected…

        • Jeff

          I used to think that was a great idea. One less thing to worry about. It’s not expected in many areas of the world I’ve traveled (unless they think you’re American, ha ha). However, service is often awful in a lot of these places compared to the good ‘ol USA. Nobody seems to care.

  • Robert Moffitt
  • Gary F

    The raise in minimum wage means ALL wages go up. Most employers pay more than minimum wage so they don’t get minimum wage quality workers. Combine that with the rise in food prices, it’s hard to pass on all those increases to the customer. Then think, if you own a restaurant in downtown Minneapolis or near a tap room. You have to compete with people that have less overhead than you with the food truck game. And it’s already in the works, but the major chains like McDonalds are testing touch screens and credit card swipes to eliminate labor because they can’t push on the increase in costs to their customers. Fast food is already expensive these days as it is.

    • Veronica

      Fast food chains are struggling because they’ve lost market share. Raising prices and/or making the ordering process more frustrating will just make things worse.

      • Fast food places are also struggling because their food sucks…

        • Veronica

          Yes, that was my point. Who they hire and how much they pay is the LEAST of their worries.

    • Veronica

      And again, I would want to actual numbers to make up for this whining. Your brick an mortar can’t make ends meet? Then do a food truck.

  • Jerry

    I would think conservatives would be in favour of a minimum wage increase. Higher wages equal fewer people on welfare, which I thought was their goal.

    • Gary F

      Minimum wage either forces employers to raise prices, thus causing inflation, which then means any increase in wages goes towards higher priced goods or the employer can’t pass on the increase to customers, thus causing them to hire fewer people or replace the jobs with technology.

      And the amount of people making minimum wage for an extended period of time is quite small.

      Conservatives know basic micro/macro economics instead of just feel good ideas.

      • Jerry

        So absurd executive compensations do nothing to raise prices and cause inflation?

        • John

          I don’t think they do, no.

          To give an example, using a pretty solid MN company:

          According to the Yahoo profile on 3M, there are 88,667 people employed by 3M (currently). In 2013 (the last year they give data for on that site), the CEO made a total of $6.8M (including options he exercised).

          Breaking that down, and giving the CEO a salary of zero, for the sake of argument, it comes out to be $76 per employee, per year, or approximately 3.7 cents per hour per employee. So, everyone could get a 4 cent per hour raise at 3M, and the total compensation of the CEO would be spread evenly across the company.

          You can argue about whether that’s more money than Inge Thulin deserves, but regardless of that, I don’t think his compensation has any significant impact on prices or inflation.

      • You’re equating inflation with a negative. I don’t know that it is or it isn’t but it’s hard to see how anything changes with stagnation.

        Take The Cottage (which, by the way, was a wonderful restaurant in Woodbury before they closed that one down) example in the Strib. She says her profit margin is 3-5%. I don’t know whether that’s good or bad because I don’t own a business. But for the sake of argument, it doesn’t matter.

        The only way her profit margin can go up, from the scenario painted, is if her costs go down. The only way her costs go down is if the cost of goods in a restaurant go down — and we know that’s not going to happen– or the costs of labor go down.

        So, the question then becomes, how does everyone win? Or is the economy such that someone has to lose?

        http://www.foxbusiness.com/economy-policy/2014/06/19/good-inflation-bad-inflation-fed-dilemma/

        • Dave

          I would imagine that 3-5% is probably typical for a restaurant. Obviously that isn’t a lot, and it’s one reason why so many restaurants fail.

  • Vince Tuss

    As for the Minnesota Nice question, I have understood it to have a meaning of passive-aggressive irony, like the “Have a Nice Day” example of Bob’s. Not a compliment.

  • kevinfromminneapolis

    The owners who said they clear 3-5 cents per dollar was pretty revealing. I also hadn’t thought before about how not allowing a tip credit could result in distorted wages between tipped and non-tipped employees.

  • Lisa

    Always left out of these discussions is that generally restaurant employees aren’t guaranteed a 40 hour week or that when they do go to work, that they’ll even be able to work their full shift. If business is slow that day, people (both front and back of house) get sent home and make no money period. These institutions try to make it appear that servers are cackling all the way to the bank after screwing the poor shop owners. Bottom line is that restaurants have managed to build an extremely flexible workforce whose pay is directly subsidized by the consumer. If they can’t make it work using the same parameters as the rest of the business world, perhaps something else is wrong with their business model than Joe Blow getting an extra 10 dollars a shift.