Minimum Wage! Hiyah!

I never knew that the way to get rich in America was to become a waiter. I mean, sure,  I suspected; waiters are always driving those sweet ’99 Hyundais, rolling with fat stacks of Washingtons, and spending holidays at their vacation homes in their regular homes. But still, it’s nice of Minnesota Rep. Tom Emmer, R-Delano, to come along to alert the rest of us to the dread scourge of waiters earning a living wage.

For those who live outside my home state, Emmer, the presumptive GOP nominee for governor, has suggested that Minnesota should join those states that allow businesses to pay their servers $2.13 an hour if said servers make tips. Right now, Minnesota restaurants have to pay servers $5.25 if they’re a small employer, or $6.15 an hour if they’re a big one.

Now, you may note that $6.15 an hour isn’t that much. And you may realize that if you’re a typical Perkins server on a slow night, you may only be bringing in another three or four dollars per hour in additional tips. Indeed, if you live here on planet Earth, you’re probably not surprised to find out that, far from being the richest of the rich, the median server earns $9.36 an hour — about $19,000 a year. Of course, Emmer claims that waiters actually average $15.43 an hour, which is a bit better — $31,000 a year.

But Emmer is proposing a wage cut for waiters and bartenders equivalent to $8361.60 a year. Even using Emmer’s inflated statistics, that’s cutting a $31,000 a year salary to $22,638.40 — a 37 percentLike a pay cut for people barely making a living wage. Using real statistics, the pay cut is even steeper — cutting wages 79 percent, from $19,000 a year to $10,638.40.

Why Emmer would want to cut someone’s wages by 79 percent — to literally drop servers below the poverty line — is simple. Servers aren’t rich. Restaurateurs aren’t all rich either, of course. But they’re a lot more likely to be rich than their employees. And Emmer cares very much about making the rich richer. If he has to do so by making the poor poorer, well, that’s a feature, not a bug.

Tom Emmer doesn’t mind snatching away basic protections from the working poor — from people working hard, five days a week, doing what they’re supposed to do. Indeed, he revels in it. Like far too many of his fellow Republicans, Tom Emmer doesn’t care if you work hard. He only cares if you make a lot of money. If you don’t — no matter how hard you work — screw you.

This entry posted in Conservative zaniness, right-wingers, etc., Economics and the like, Elections and politics, Minimum Wage. Bookmark the permalink. 

22 Responses to Minimum Wage! Hiyah!

  1. 1
    Frowner says:

    Tom Emmer is a racist, crony-happy clown. This is precisely in keeping with his simultaneously ugly and foolish politics–you should have seen him marching in the Cinqo de Mayo parade after coming out in support of sb1070, getting booed left and right. In the midst of the booing, his little parade of racist creeps debated whether they should….sing the theme song from Team America World Police to convey their message to the crowd.

    It’s a tragedy for Minnesota that we’ve declined from the merely adequate Perpich to the poorly-chosen Ventura to vile Pawlenty to a candidate who combines Pawlenty’s selfishness with a profoundly undistinguished political career and a profound stupidity.

    I am skeptical of government, but there definitely was a time when “let’s pick on the weak and the poor!” was not the political culture of this state.

  2. 2
    NoCeleryPlease says:

    Not that I am in ANY way suggesting that taking the minimum wage down for servers is a good thing. Because it’s not. Everyone deserves to make a decent living wage – NOT relying on the kindness of strangers.

    But I think you have your tip estimate a bit low.

    I was a server at one of the most craptastic restaurants on earth, and I still pulled down at least $8 to $10 per hour in tips.

    Although… I live in one of the $2.13 per hour states and I think that when people know that the servers make that little, they tip more… so maybe they tip less in states where the minimum is higher. I don’t know.

  3. 3
    Erin S. says:

    Yes, by all means cut the wages of the people who can least afford it instead of the wages of the people who make vastly more money than they need by performing badly at something that isn’t terribly difficult to begin with. For example, Governor of Minnesota.

    The thing that annoys me is that it isn’t like servers in Minnesota are making full minimum wage NOW, and second, it’s not like minimum wage is actually the same thing as a living wage anyway… even IF you can find a full time minimum wage job, which is about as common as Republican politicians who care as much for their poor constituents as they do about the rich ones.

  4. 4
    RonF says:

    Why Emmer would want to cut someone’s wages by 79 percent — to literally drop servers below the poverty line — is simple.

    Emmer didn’t propose to cut someone’s wages. He proposed that their employers be permitted to cut their wages if they choose to do so. Or, they can keep them where they are. Or, they can increase them. But he’s not the one who signs their paychecks, so he’s not the one cutting their wages.

    Restaurateurs aren’t all rich either, of course.

    Nope. In fact, the most recent study showed that 25% of restaurants fail in the first year and by the 3rd year that number gets to 60%. Given that those numbers are culled from data for the Columbus metro area from 1996 – 1999, I bet they are higher now given the current economic climate.

    But they’re a lot more likely to be rich than their employees.

    Based on the above numbers I bet they’re more likely to be bankrupt than their employees are as well. If they succeed they deserve to be rich – they’re taking more risk. If a restaurant fails the wait staff goes looking for new jobs but still have the assets they had when they started working for the restaurant. OTOH, the owner loses his or her investment.

    I can’t speak to Emmer’s motivations. But people who take greater risks deserve greater rewards if they succeed, as they’ll have greater punishment if they fail.

    Given your speculations about Emmer’s motivations, has he himself said why he proposed this?

  5. 5
    chingona says:

    @ NoCelery … Apparently your restaurant was not as craptastic as the one I worked at. I could make $8-$10 on a Friday or Saturday night, but the rest of the time, I was getting maybe $5-$6 back when the minimum wage was $4.25/hour. It was a $2.13/hr state, and I remember passing many a slow night calculating at what point my hourly rate would slip below minimum wage. It happened more than once, and yes, they’re supposed to make that up, but no, they don’t.

    Also, it’s generally been my experience that the only people who know that servers don’t make minimum wage are people who worked as servers.

  6. 6
    Jeff Fecke says:

    Emmer didn’t propose to cut someone’s wages. He proposed that their employers be permitted to cut their wages if they choose to do so.

    And without state protection, many will. Because they can. Which is why starry-eyed liberals like me think it’s okay to have regulation — because nobody should work full-time and still be below the poverty line.

  7. 7
    Mimi says:

    Not to mention how many fewer people are going out to eat because they can no longer afford it – my husband and I used to go out 3-4 times a week when we met. Then we got hit by two rounds of job loss each, and I started spending a lot more time on the second shift because dinner *had* to be made every night because we could no longer afford eating out.

    Though we’re both always good tippers – a history in food service does that to you!

  8. 8
    Dan Hicks says:

    I complete agree with the sentiment in the post, but the numbers you don’t make any sense — maybe you got your examples confused?

    Let’s say the `median server’ works at one of the ubiquitous big chain restaurants 40 hours/week, 50 weeks/year, currently making $6.15/hour in wages and an average of $3.21/hour in tips. Or, $18,720/year. If wages drop to $2.13/hour, she (or he) now makes $4.02/hour in wages, or $14,460/year including tips. (*Not* $10.638.40.) That’s a loss of income of 22.8% or a reduction of wages of 65.4%. (Devastating, certainly, however it’s measured, but neither is near 79%.) If the server’s also, say, a single parent, you’re right that it puts her (or him) just below the poverty line ($14,570 for two people).

  9. 9
    leah says:

    Emmer didn’t propose to cut someone’s wages. He proposed that their employers be permitted to cut their wages if they choose to do so.

    This is what I like to call a distinction without a difference. Either way, due to his actions (should the proposal pass), their wages will be cut. He’s still the origin.

    In other words, what Jeff said @ 6.

  10. Pingback: Michael Alan Miller » Just another redistribution

  11. 10
    nm says:

    Most restaurants fail in the first few years, but not because of employee wages. It’s the cost of food, supplies, and maintenance that lead to bankruptcy. Most restaurants that fail could pay staff nothing at all* and they would still fail.

    *And many restaurants that fail do pay staff nothing at all, in the sense that they’re mom & pop operations with no employees.

  12. 11
    Ruchama says:

    Let’s say the `median server’ works at one of the ubiquitous big chain restaurants 40 hours/week, 50 weeks/year, currently making $6.15/hour in wages and an average of $3.21/hour in tips. Or, $18,720/year. If wages drop to $2.13/hour, she (or he) now makes $4.02/hour in wages, or $14,460/year including tips.

    I think you mixed up your numbers. If the wages drop to $2.13 an hour, he or she is making $2.13 an hour in wages. The $4.02 is the difference between the old wage and the new one. So then wages plus tips is $5.34 an hour, which works out to $10,680 a year.

  13. 12
    RonF says:

    nm @ 11: how do you know? And it doesn’t matter whether your staff are the owners and staff or not – they still have to eat and pay their rent and buy clothing, etc. They still have to be paid. Their labor is not free just because they are related to the owner (or ARE the owner).

    leah @ 9; if someone cuts your pay they’ve made the decision and cut your pay. If someone changes the legal environment that enables someone else to cut one’s pay, one’s pay may or may not be cut – the responsibility belongs to the person actually signing the check. The fact that your pay got cut doesn’t mean that anyone but the person who actually cut the pay is responsible for doing so.

  14. 13
    nm says:

    Ron, I know from my own and others’ experiences in the restaurant business. But don’t take my word for it. Look at what Forbes says about it: food costs are typically 25% to 40% of restaurant revenues, while payroll is down around 20% to 25%. Then there’s rent, marketing, and other overhead costs. A slightly different (in that it doesn’t consider economic causes of failure to be as important as family/time pressures and failure of imagination) viewpoint can be found in a study here (pdf), from the Cornell Hotel and Restaurant Administration Quarterly.

    And, BTW, having your kids work for you is practically free. You don’t need to pay them more than allowance.

  15. 14
    Sebastian says:

    RonF, I have a question for you.

    As you probably know, there are laws that specify what bumpers you can have on your car. You must have a bumper of a certain size, at a specific height, with some specific parameters that make it less likely that the car will kill whomever it hits. In the same vein, there is a law (at least in France and Britain) that forbids pop-up headlights on new cars. Too many kids died on these in a short period.

    Would you be OK with a politician trying to get these laws off the book? After all, he’s not the one who endangers your life… it’s the person who mounts circular saws on his Hummer. And retractable headlights look good and save fuel…

    Full disclosure: a friend of mine is keeping a 80s Toyota Supra alive, and it has that kind of headlights. My wife knew someone who was practically cut in half by the headlights of a similar car in Boston, and thinks Pete’s an asshole for not junking that car (he’s got others) I disagree with her.

  16. 15
    La Lubu says:

    RonF, what Emmer’s proposal would do is take the wage burden away from the employer, and put that burden on the taxpayer instead. People who don’t earn a living wage need subsidized housing, Medicaid, LINK cards, LIHEAP (assistance with utilities), etc. From the conservative perspective, why is it better that the public make up for the lack of living wages rather than the employer?

    In other words, this is in effect a subsidy to private employers, without those private employers being held accountable in any way for that benefit. Unemployed people are held accountable for their unemployment benefits. TANF recipients are held accountable for their benefits.

  17. 16
    Simple Truth says:

    La Lubu – brilliant! Absolutely brilliant. Maybe it was common sense to everyone else but I’ve been reading this thread, trying to justify for a reason besides justice/decency that wages should at least be min. wage. And you hit the nail on the head.
    In my economics class, we learned about hidden cost, and how even the most libertarian economist recognizes the need for regulation in order to make those costs be borne by the person/business creating them. That housing cost, a living wage, should be borne by a business claiming to pay at least minimum wage. Because really, if they don’t, it shifts the surplus to the business instead of society under the traditional supply/demand curve and we all lose out.
    I’m so excited now. Economics and sociology make me geek out.

  18. 17
    RonF says:

    From the conservative perspective, why is it better that the public make up for the lack of living wages rather than the employer?

    I don’t presume to speak for conservatives in general. However, note that you present a binary solution set; either employers provide money to people working for them or else the Federal government does. I say that presuming that all the programs you mention are primarily Federally funded, but I could be wrong on that. Conservatives point out that there are other alternatives. One would be dependence on local government funding. While it’s not a huge distinction, at least you are closer to the officials making the decisions and your vote and your letters have more influence. Other more significantly different alternatives would be that either such programs be funded by private charities or that they simply either do not exist at all or they don’t exist to the extent that they do now.

    You are presuming that any shortfall from an employer must be made up by the government. As far as I can perceive, this is not the conservative viewpoint.

  19. 18
    RonF says:

    O.K. I’m posting a second comment because when I try to edit the first one the text in the window keeps scrolling to the top. This happens when I post from home (using Windows 7) but not from work (using Windows XP).

    Simple Truth:

    Because really, if they don�t, it shifts the surplus to the business instead of society under the traditional supply/demand curve and we all lose out.

    Do you then think that business and society are separate entities?

  20. 19
    Ampersand says:

    Ron, Medicaid is mostly funded by the states, but a lot of folks are arguing that the feds should pay for more of it in the future.

    One problem with having the states fund such things is that many states have little or no ability to deficit spend in an emergency. So just when things are bleakest and people need help most, the states are the most likely to be making cuts. That’s bad for the economy (it tends to prolong recessions), and bad for people.

    Also, I’d say business and society are overlapping but distinct entities. Businesses are part of society, but there’s a lot more to society than business. Also, many of the biggest businesses are transnational corporations, and thus not part of any one society.

  21. 20
    Elusis says:

    eople who don�t earn a living wage need subsidized housing, Medicaid, LINK cards, LIHEAP (assistance with utilities), etc. From the conservative perspective, why is it better that the public make up for the lack of living wages rather than the employer?

    This is exactly the criticism that has been leveled at Walmart for over a decade. It’s been a long while since I heard specific stats, but in the early 2000-s I remember hearing that because their wages were so low and so many were refused full-time employment, a fairly significant number of Walmart employees qualified for public aid of a variety of sorts – children covered by state health insurance rather than Walmart’s because it was unaffordable, parents getting written-down charity care at ERs when they needed medical treatment, etc. etc.

    It’s more of the privatization of profits/socialization of risk & costs that we’ve seen in the banking meltdown.

  22. 21
    La Lubu says:

    Conservatives point out that there are other alternatives. One would be dependence on local government funding……private charities or that they simply either do not exist at all or they don’t exist to the extent that they do now.

    The problem with that is the population base usually isn’t anywhere near what it would need to be for local funding to suffice. We see that right here in Illinois, RonF, with our school districts. Local property taxes are the largest funding mechanism for the schools, which means wealthy suburbs (like the one you live in) have what they need to provide a good education for their students; inner city school districts (like the one I live in) do not have what we need—and would have even less if it weren’t for Title I. Think about that for a minute—that’s just local funding being the primary, not the sole source.

    Theoretically, you and your neighbors on your block, or in your subdivision, could form your own self-funded health insurance company. But with that small of a population base, how long do you think it would be before your company was insolvent? Economy of scale, RonF, economy of scale.

    As for private charities, economy of scale affects them, too. But more importantly, there is no reciprocity for private charities—they can deny a person needed help for any or no reason at all. They are allowed to discriminate. Governmental assistance comes with an enforceable contract—the person requesting help has certain criteria to meet and agrees to certain terms, the government also has certain criteria to meet. There is an explicit agreement of non-discrimination on race, sex, ethnicity, language, creed, color, national origin, religion….it’s not comprehensive as it doesn’t include sexual orientation or gender expression (thus leaving out LGBT people—and that needs to change)….but it’s better than what most private charities offer. Private charities aren’t accountable to the public the way local governments are, so it intrigues me that you would like to see the burden shift to local sources, knowing full well that local sources mean less accountability, not more. For that matter, local government isn’t as accountable to the public as the federal government. Who is going to enforce an abrogation, or refusal to enter a contract for assistance, when the Sheriff is the brother-in-law of the Mayor? Remember, it wasn’t local authorities that protected the right of Afro-American students to attend school with Euro-American students.

    Since you don’t claim to speak for all conservatives (I don’t claim to speak for all progressives, either, but do hold that my economic views are typical of labor unionists), here’s a question for you personally. Do you personally agree that it should be legal to pay sub-living wages, and that the sole burden of responsibility for the consequences of that sub-living wage should be on the person that accepts that sub-living pay?