Five by 8 – 7/6/10: Working for tips

1) Republican gubernatorial candidate Tom Emmer held one of the stranger campaign events on a day when nobody was likely to notice yesterday. He stopped at the Eagle Street Grille in St. Paul, learned that some waiters there make $100,000 a year, and proposed cutting minimum wage for employees “making a lot of money.” What’s a lot of money? He didn’t say. What should the minimum wage be reduced to? He didn’t say. How many jobs would be created at the Eagle Street Grille? He didn’t say.

“With the tips that they get to take home, there are some people earning over $100,000 a year; more than the very people providing the jobs and investing not only their life savings but their families’ future,” Emmer said.

One of the grille’s owners said three of his employees make at least $100,000. Why not all of them? Two things are happening in the situation. People are running up big tabs when these waitpeople work. That’s a direct benefit to the employer, that may be reflecting on the quality of the worker. Isn’t that a win-win? And the waitpeople are probably working more than 40-hour weeks, in which case why would the employer hire more people if he’s got people doing more than the job of one? Oh, there’s also a possibility that these super-waitpeople are making a wage higher than the minimum, in which case, the discussion is irrelevant.

There is an argument on a broader scale about the competitive nature of wage laws from state to state, but restaurants are a different beast from other businesses that pay minimum wage. If someone doesn’t like the price of a burger — because of a higher minimum wage — it’s not as if they’re going to go eat in Mississippi instead (There’s no minimum wage law in Mississippi, where the unemployment rate is 10.7%). And the waitperson is the face of an establishment and is the difference between whether you stay in business or whether you go out of business. You often get what you pay for.

Are these employees victimizing the restaurant owners? Let’s do the math: Someone making $5.25 (the minimum wage for small businesses) in Minnesota, working 40 hours a week, taking no vacations, grosses $10,920 a year. Someone making $89,080 in tips at 20% of the bill (minus alcohol) means the establishment has billed the customers of that waitperson $445,400, not including alcohol. The restaurant is reaping $214.32 an hour return on a $5.25 labor investment in the wait staff. Chances are, there are no benefits being paid.

Is this good or bad? The person with the tips is pushed into a higher tax bracket and is paying a larger percentage of income in taxes. They might even be making enough money to take their family out to restaurants. So — at least with restaurant workers — what’s the problem here?

Let’s go to the mailbag. Here’s Gerald of North Mankato:

Those kind of jobs are rare. If I could find a job that paid 60k a year within 80 miles of where I live I would be there along with another thousand or so people I know. For a 100k a year job I would relocate and pay the employer a 10% finders fee. If Emmer really thinks this is an issue it is a demonstration of being out of touch with the public.

In any event, it’s the restaurant version of “I know a woman on welfare who drives a Cadillac,” a common complaint by those opposed to welfare programs in the ’70s. Few of them actually knew such a woman, but the details — and the facts — didn’t matter. It might well be that a candidate has a logical position on creating more jobs by reducing the minimum wage, but if he can’t say how many jobs and what the minimum wage should be, more than likely he’s telling you about a woman who drives a car.

Let’s hear from you. If you’re a business owner, how many jobs would you promise to create per $1 reduction in the minimum wage? If you’re working for tips, let’s hear about your budget.

2) Are we a region just barely hanging on? Or are we the next success story? It depends on whom you listen to. Joel Kotkin, in a Newsweek article called “Why the Great Plains Are Great Once Again,” says education, energy, and agriculture have the region ready to cash in:

The public schools are excellent; the Dakotas, Iowa, Minnesota, Nebraska, and Kansas enjoy among the highest graduation rates in the country. North Dakota itself ranks third and Minnesota fourth (after Washington, D.C., and Massachusetts) in the percentage of residents between 25 and 34 with college degrees.

Nowhere is this potential clearer than in Fargo, which is emerging as a high-tech hub. Doug Burgum, from nearby Arthur, N.D., founded Great Plains Software in the mid-1980s. Burgum says he saw potential in the engineering grads pumped out by North Dakota State University, many of whom worked in Fargo’s large and expanding specialty-farm-equipment industry. “My business strategy is to be close to the source of supply,” says Burgum. “North Dakota gave us access to the raw material of college students.”

North Dakota gets the most love, though Kotkin acknowledges many of its small towns won’t survive.

For the record: North Dakota’s minimum wage is $7.25 an hour.

3) I’ve long thought that air conditioning and the backyard deck killed America’s sense of community. With air conditioning, we didn’t need porches anymore, where we’d sit and drink our lemonade, fan ourselves, and chat with the widow Hooper about the neighborhood news. And yet, when it gets hot and humid, our love of the American community spirit is sorely tested., however, says there’s more to the equation. Science writer Stan Cox appears to suggest, and this seems a bit of a stretch, air conditioning is nearly a tool of the Republican Party:

Love it or hate it, refrigerated cooling has been a major boon to the Republican Party. The advent of A.C. helped launch the massive Southern and Western population growth that’s transformed our electoral map in the last half century. Cox navigates all of these scientific and social angles with relative ease, providing a clear explanation of how A.C. made the leap from luxury to necessity in the United States and examining how we can learn to manage the addiction before we refrigerate ourselves into the apocalypse.

Things could be worse. You could live in the northeast, where temps will hit 102 today. But it’s a wet heat.

4) What are the limits of charitable giving? Oil spills, American Public Media’s Marketplace suggests. Charitable Gulf relief efforts have raised very little money, unlike recent disasters in Haiti and elsewhere. What’s going on? “When there’s a natural disaster, people feel like there’s nothing anybody else could do about it; we all have to chip in. But in this kind of thing, people expect the corporation and they expect the government to do things,” Stacy Palmer of the Chronicle of Philanthropy says.

Like other disaster efforts, this one comes with its own music video. But it’s not doing any good.

5) Hardball Times today has issued its annual ranking of baseball teams’ surcharges on ticket prices. The Twins finish 14th. The average additional fees amount to $6.75 per ticket. The lowest is Milwaukee ($2.50). “Biggest shock on the list?” Writer Chris Jaffe says. “Easy one: The Twins didn’t go crazy with increasing their gouging costs now that they have a new stadium.”

Bonus: Mouse and scientist sleep together; scientist thrilled. “No big whoop, as they say in my neighborhood, just your average little-mammal-snoozes-next-to-big-one story,” says NPR’s Robert Krulwich.


Minneapolis is one of four possible sites for the 2012 Democratic National Convention. For the host city, is a national political convention worth the trouble?


Midmorning (9-11 a.m.) – First hour: Corporate money and the 2010 midterms. The Supreme Court’s ruling in the Citizens United case caused an uproar among advocates of campaign finance reform, and raised concerns over an influx of corporate cash into political campaigns.

Second hour: Dubbed “the word merchant,” federal judge James M. Rosenbaum will retire this summer after almost a quarter century of hearing famous cases. He tells us about some of his most challenging cases, and how a judge knows he’s right.

Midday (11 a.m. – 1 p.m.) – First hour: Is the economic recovery stalling? Chris Farrell and Louis Johnston explore that question.

Second hour: Short presentations from a variety of people presenting their one “big idea” at the 2010 Aspen Ideas Festival.

Talk of the Nation (1-3 p.m.) – First hour: Barbara Bradley-Hagerty discusses a new twist in murder trials: Neuro-law, or “my brain made me do it.”

Second hour: Redefining adulthood. For years we’ve heard about boomerang kids and extended adolescence. Now, the new health care law allows parents to cover their kids until they’re 26. And some college graduates who can’t find work can find their way back to mom and dad’s.

All Things Considered (3-6:30 p.m.) – In the first four months of this year, Immigration and Customs Enforcement deported more than 3,000 people from the region that includes Minnesota. That’s on pace to be a third higher than last year. Many of these were people who came to authorities’ attention when they were booked into county jails. ICE’s top priority is deporting criminals. But fewer than half the people returned to their home countries had any criminal convictions. MPR’s Sasha Aslanian will have the story.

The final section of the Paul Bunyan Trail connecting Brainerd to Bemidji will soon be completed, says MPR’s Tom Robertson. That’s a 100-mile stretch. What’s been the impact? Has it been a boost for the economies of the small towns along the route? More tourists? Is there a greater interest in biking these days?

Laura Yuen will have the latest on the contract settlement vote by Twin Cities nurses, while Jess Mador looks at how common — or not — retirement pension plans are these days.