Tom Emmer, Republican candidate for Minnesota Governor, wants the minimum wage lowered for service workers who get lots of tips. See "Emmer: Lower wages for tipped workers", Jackie Crosby, Star Tribune, 2010-07-06. He says that the extra wages are taking money from customers. Is he also calling for CEOs with large bonuses to get a lower base pay? After all, these CEOs are also taking money from customers.
His arguments are also weak on other points.
He uses as an example the Eagle Street Grill in downtown St. Paul where "three servers take home over $100,000 a year, including tips."
Do each of the servers take home $100,000 a year or do three servers take home $100,000 a year among them. In the latter case, $33,000 may be a good income for many servers, but many others would like to get that much. If a server receives lots of tips, doesn't that mean they are providing good service to their customers. If they are providing good service to their customers, aren't many of these repeat customers and probably even buying a lot of food and drink. If the customers are buying a lot, the restaurant owners should be very happy to have highly-paid servers.
How many times have you gone into a restaurant where the server has not asked if you want drinks before dinner, has not asked if you want wine with dinner, and has given you a bill without even asking if you want coffee or dessert? Even if the answer will be no, a good server always asks these questions. The server who does will generate more revenue for the restaurant and will get a bigger tip. Oh, but that is taking money from the customers.
If you want to see more realistic figures, see "Tom Emmer goes after food server wages", Rachel Hutton, City Pages, 2010-07-06. She blows lots of the "facts" that Emmer states out of the water. An even better analysis is "Servers, wait staff unlikely to make $100,000", Annie Baxter, Minnesota Public Radio, 2010-07-06, 2010-07-06.
I could go on and on picking apart the arguments of the likes of Tom Emmer, but I'll end with just two.
One was mentioned in Baxter's argument comparing wait staff during slow times to that of sales persons. Many sales persons still get a base pay for getting out there and trying. Do CEOs get a lower base salary when sales are low?
Remember Circuit City. It laid off its highest paid sales staff and went downhill from there. It was the highest paid sales staff that people went to for answers. If they got good answers, they bought. The lower paid staff didn't always have the answers and so fewer people bought stuff from Circuit City. The high-paid servers are generating a lot of sales for their restaurants. Don't knock them!
Other references:
"Circuit City cost cutting madness", Andrew Weir
"How the Mighty Fall", Jim Collins. It is ironic that he mentioned Circuit City in his previous book, "Good to Great". Is there a lesson for Minnesota here?
