Free Minds & Free Markets

Minneapolis City Council Ignores Damning Seattle Study, Passes Its Own $15 Minimum Wage

Workers and business owners have pleaded with council members to consider the cost of their action.

A week after the release of a study revealing the high cost of Seattle's minimum wage, the Minneapolis City Council rammed through a $15 minimum wage over the strenuous objections of workers and businesses.

The council voted 13-1 in favor of a tiered minimum wage roll-out schedule for large and small businesses modeled closely on Seattle's. The first of the wage increases will kick in in January 2018.

"The majority of the city council has given us two middle fingers," said Sarah Webster Norton, of Service Industry Staff for Change, which has been fighting the minimum wage ordinance.

Much of the opposition in Minneapolis has centered on the council's refusal to allow restaurants and bars to credit tips to the base hourly wage of their workers.

The tip credit puts more cash in the pockets of workers and gives businesses more flexibility in adjusting to wage hikes. Webster Norton, a server with 24 years of experience, says she expects businesses and customers will scale back or eliminate tipping, cutting her take-home pay by half.

"We've tried to show them the numbers and show them the math, they absolutely, staunchly refuse to listen," she said.

A survey of more than 100 Minneapolis restaurants by Pathway to 15—a pro-minimum wage, pro-tip credit organization—found that 81 percent of businesses would reduce hours, and another 55 percent would eliminate current positions without a tip credit.

Roughly 63 percent of business owners surveyed said they would implement a service charge or change their tipping model if a tip credit wasn't included in the Minneapolis minimum wage ordinance.

Minneapolis Mayor Betsy Hodges, a minimum wage proponent, however, described tipping in an essay as a legacy of slavery and demeaning to women. Webster Norton said Hodges and the council have abused identity politics to quiet opposition.

"It's insulting to those of us who have tried to hone our craft, who have worked our asses off to become knowledgeable about food and beverage and alcohol and wine," Webster Norton said. "All the things that make a good tipped employee. It basically just implies that we have to use our feminine wiles to get tips."

Steve Minn, a former council member himself and owner of affordable housing developments in the city, told Reason the rush to a minimum wage increase was political pandering by Hodges and councilman Jacob Frey, who are vying for the nomination for mayor at the Democrat-Farm Labor Party convention July 8.

Minn wrote a lengthy op-ed in the Minneapolis Star-Tribune detailing his concerns.

"If this was about good policy, they would have waited and done their study, and paused when the most recent data on Seattle came back," Minn said. "The rush to deal with it this month has everything to do with the mayoral convention that happens in two weeks."

The new ordinance leaves Minn in a tough spot, prohibiting him from raising rents of his affordable housing, thanks to a contract with the Department of Housing and Urban Development. Minn says his alternative will probably be to trim services to his tenants.

"Instead of having three cleaning crews a week," he said, "maybe I'll have two."

Photo Credit: SEIU Local 99/Flickr

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  • chemjeff||

    "It's insulting to those of us who have tried to hone our craft, who have worked our asses off to become knowledgeable about food and beverage and alcohol and wine," Webster Norton said. "All the things that make a good tipped employee. It basically just implies that we have to use our feminine wiles to get tips."

    You know, Ms. Norton, it's not an either/or proposition.

  • mortiscrum||

    Yeah I don't understand her reasoning. All of the skills listed should result in being a better paid employee, not just a better tip-getter. I cannot make heads or tails of the last part.

  • Scarecrow Repair & Chippering||

    Might it be that the minimum wage is now so high that there's no longer much incentive to be skilled? Sure, the worst of the worst will be fired, but the rest will have to take up the slack without any increase in pay.

  • ||

    Might it be that the minimum wage is now so high that there's no longer much incentive to be skilled?

    Non-skilled, feminine-wile-based labor will earn her way more than $15/hr.

  • jerryg1018||

    What the liberals are trying to do is replace the lost blue collar middle class jobs with higher pay for entry level jobs. They figure some businesses will go under while others will remain and pay the $15 hourly rate which the liberals can keep raising to replace the $45-60K jobs lost. That won't last for long. The cost of a meal will become too exorbitant. I Took my daughter out for dinner Friday night to a Ruby Tuesdays. I had a prime rib, about 5/8 in thick, a small scoop of mashed potato and some zucchini. My daughter had a plate of penne pasta with some chicken and broccoli in Alfredo sauce. We each had a soft drink. The meal cost $47 and some change plus the $9 tip. That was almost $57 for two people. Ridiculous.

  • Ragoftag||

    Hodges is implying that the waitresses only make tips by 'prostituting' themselves for their clients and that there is no real skill involved. Anyone who has worked food service will tell you the big earners know their S**t! This aspersion is a ploy I haven't seen in a few years and meant to shame waitresses. Funny how such people never bring it up when the victim is a waiter...

    Hodges, of course, insulates herself from sexism charges by being female. Let her work 6 tables for an 8-hour shift before she pulls this kinda nonsense.

    Remember, (1) the IRS considers 10% an average tip, (2) women are increasingly eating out and are poor tippers and (3) these waitresses are too often single mothers who need that tip. Tip well for good service and be understanding.

  • Room 237||

    I understand her reasoning fine. What makes me want to tip well? I like a server who is friendly and personable, who understands my questions and has good answers. When I ask about different items on the menu, can answer the question in clear and concise ways.

  • LarryA||

    All of the skills listed should result in being a better paid employee

    And result in class action lawsuits by the "Equal pay for equal work" SJWs. "All we have to do is keep raising minimum wage until that's what everybody's making. Equality!"

  • Fuck You - Cut Spending||

    Christ, what an asshole. The shitty waitresses at Hooters get crummier tips.

  • Fuck you, Shikha (Nunya)||

    She touched my shoulder! The slutty chick touched me! Here's a $15 tip.

  • Rebel Scum||

    OT: Attempt to rob a gun store goes predictably

  • BestUsedCarSales||

    I'm going to pretend the headline photo is the real one.

  • Unlabelable MJGreen||

    Workers and business owners have pleaded with council members to consider the cost of their action.

    Class traitors and kulaks, you mean.

  • SQRLSY One||

    I favor a $400-per hour min wage!!!

    There, ye cheap fuck-tards on the Minneapolis City Council AND Seattle TOOOO, I am WAY the hell more compassionate than ye Scrooges!!!!

  • SQRLSY One||

    Stand back! I have moral superiority, and I am NOT afraid to use it!

  • Dems=Intolerant||

    I like your way of thinking. The city council obviously didn't give a damn about what this would do to there city. So if your going to sink it, it might as well be for a "living wage" of $400.00 an hour. That of course is for an entry level position only.

  • Trollificus||

    That depends on what your definition of "entry" is, dunnit? Or "position", I guess.

  • Unlabelable MJGreen||

    I'd like to hear one argument, any argument, as to why people's labor is not worth $400/hr. Do we really think so little of workers to believe they deserve less?

  • Ragoftag||

    I think the MW should be $100k whether you work or not! Just try and argue against THAT!

  • Rat on a train||

    The city should also give a basic income to tourists and anyone who passes through town.

  • SQRLSY One||

    The city should also give a basic income (MW at BARE-BARE min!!!) to anyone, anywhere, who thinks benevolent thoughts about the Minneapolis City Council !!!!

    Topped ya!!!

  • Dillinger||

    city council should be a minimum wage job...they get their cash from graft anyway

  • Scarecrow Repair & Chippering||

    You've got it -- this explains everything. They get no tips, so why should servers get some kind of fancy high-falutin' tip credit? What do they think they are, better than city councilors? The nerve of some people!

  • Half-Virtue, Half-Vice||

    Hopefully I can leverage a, "now I only make $5 more than minimum wage" pitch from this.

  • BYODB||

    Yeah, it's like they don't even consider that someone who was already making $15 an hour might demand to make more than a McDonalds worker after such a change. I mean, why bust your ass as, for example, an EMS driver when you can just ask 'you want fries with that'?

  • Number 7||

    they don't? Of course they do and they know that union CBAs are based on min wage. In fact it is probably more about that than the poor schlubs who work at McDs for $15/hr.

  • Robert||

    But the councilwoman said it was about "one fair wage", implying everyone should be paid the same.

  • R. K. Phillips||

    Except for the council members, of course.

  • Half-Virtue, Half-Vice||

    Also continuing the trend of there never, ever, being any good new to show up on Reason about MN.

  • PurityDiluting||

    Gov Mumbles did veto the budget for the legislative branch, surely that's positive news. Not covered here?

  • Fuck you, Shikha (Nunya)||

    Veto because it wasn't high enough?

  • BYODB||

    Yeah, because the minimum wage increase is such a good idea you have to exempt people from it.


  • Scarecrow Repair & Chippering||

    And roll it in in stages. Reminds me of people who drive up to red lights as slowly as possible, stop 30 feet back, then lurch forward 1 foot at a time, as if they are trying to sneak up on the damned light. And then when it does turn green, they are the last ones to start moving. Well, except for me and everyone else behind them.

  • Rat on a train||

    Come to Virginia. People will slow down approaching a green because it could turn red at any moment. It is self fulfilling prophecy.

  • Brian||

    You have to give businesses time to adapt beforehand, so they can plan to not replace people, grow as fast, or find savings elsewhere.

    That way, we can pretend that, once the wage hits, all that happened was people getting more money.

  • BestUsedCarSales||

    If this was about good policy, they would have waited and done their study, and paused when the most recent data on Seattle came back.

    The Seattle data and a new study is the only things that could predict that this was a bad idea.

  • Rich||

    research clearly shows that the more that women are forced to rely on tips for income, the more likely they are to be sexually harassed.

    "Just the tip!"

  • Dillinger||

    >>>It basically just implies that we have to use our feminine wiles to get tips.

    fuck you, Webster Norton. I'm male and waited tables / bartended for a decade...made plenty, with no tits or feminine wiles

  • ||

    Bartending is a skill. *I think* Norton is saying if you aren't being paid or rewarded/tipped for doing a great job, you're effectively being paid simply to be a warm body.

  • Bra Ket||

    I believe Norton is referring to the letter written by the mayor as implying those things.

  • Magnitogorsk||

    Maybe the minimum wage is good for something after all if it can help eliminate the idiotic custom of tipping at restaurants

  • albo||

    Eliminate tipping and you'll get the kind of service you get from a French café waiter, trust me.

  • Ragoftag||

    Maybe that is why they are so rude to foreigners, they'll never see you again.

  • Zeb||

    The upside there is that they aren't in a hurry to get rid of you.
    In my experience, the service you get in European places without tipping is just fine. But I haven't exactly done an exhaustive survey, so you may find differently.

    The main upside of tipping that I see is that it helps to weed out the lousy servers because they can't make enough money.

  • ||


  • Sevo||

    NYT won't allow links, but I checked there after the report last week regarding Seattle's continuing train-wreck.
    Well, the good, ol' NYT noted the study cited here, but then found another from Cal Berkeley which said 'raising the M/W really didn't have much of an effect', if the raise more or less matches what the market is doing anyhow. Believe it or not, the NYT DID include the second clause,
    So as reported by the NYT, so long as the new M/W really has no effect on raising wages, it will have no effect on jobs or hours worked.
    As much as the NYT would hope you ignore it.

  • DRM||

    The thing was, the Cal Berkley study didn't contradict the UW/NBER study. The Cal Berkley study on Seattle was only about restaurants. The UW/NBER study was broader, but did a sub-analysis on restaurants. Both agreed that restaurant employment wasn't significantly affected.

    In fact, the classic NJ study showing no significant minimum wage effect on employment, the root of all the "studies show minimum wage has no negative effects" arguments, was a restaurant-only study. So it's consistent with the UW/NBER study, too.

    Assuming the UW/NBER study didn't massively screw up, what we've discovered is that the restaurant sector is unusually insensitive to changes in the minimum wage, so restaurant-based studies on the effect should not be applied to analysis of the broad effects of an increase in the minimum wage.

  • MarkLastname||

    You expect anyone to actually read the studies?? If you fucking live science you just say 'studies say' then move along.

  • Sevo||

    "Assuming the UW/NBER study didn't massively screw up, what we've discovered is that the restaurant sector is unusually insensitive to changes in the minimum wage, so restaurant-based studies on the effect should not be applied to analysis of the broad effects of an increase in the minimum wage."

    As an investor in SF restaurants, I can state that MOST are not insensitive to a M/W raise; it affects nearly all labor costs in the business.

  • DRM||

    Sorry, in the fully qualified sentence phrase "the restaurant sector is" would be "the short-term employment rates and hours in the restaurant sector are".

    It does affect almost all labor costs in the restaurant business, sure. But it appears that doesn't translate particularly strongly on the number of staff they need to employ and the hours worked by those employees. Bankruptcies of restaurants because of the effect would (or at least could) eventually cause a decline, but over timescales that the studies of minimum wage affect exclude to minimize confounding effects other than wages.

    But in non-restaurant sectors, by the UW/NBER study, the result of increased minimum wage is an immediate cutback in hours for employees that exceeds the gain from wages, to the result that employees see an immediate loss in take-home pay.

    The important, headline point here being that that the UW/NBER study shows negative effects without contradicting the earlier studies, but confirming them. The problem with the earlier studies is not that they were wrong, but that the conclusions were applied too broadly.

  • And you believe that why?||

    After reading the UW/NBER study I must agree things don't look good for large increases in minimum wage.

    I do have my doubts though. Many conclusions were drawn by looking at the total number of hours worked by people who earned $19 or less. It is possible things are being missed. To illustrate, here are two speculations.

    There is a lot of noise about job losses in retail overall. There are a lot of low wage workers in retail. In general we expect cities to adopt the latest trend faster than the hinterlands. We should also expect that some of these sales positions have been replaced by deliver drivers, a higher paying occupation. Perhaps this has skewed the numbers more than has been accounted for.

    Potentially local regulations are preventing new businesses that can employee low wage workers. How many years of school does it take to style hair in Seattle?

    Just to be clear, the one thing that isn't in doubt is that jobs have been lost. The question is will new jobs replace the old, as has been the historical trend. I am actually glad that Seattle is trying this experiment. I live 2,500 miles away. If it blows up, like it looks like it will, my local economy won't be badly affected. If for some reason Seattle enters a golden age with all residents getting richer, well, I won't like it, but raise the MW it is.

  • albo||

    How about a minimum wage of $0 because you can't get a service job now?

  • loveconstitution1789||

    This minimum wage law looks kinda funny lookin'.

    Uh-huh. In what way?

    Oh, just in a general kinda way

    Darn tootin'!

  • Fuck You - Cut Spending||

    "Somalians Demand Simoleons"

  • Fat Stanley||

    Headline checks out.
    Poetic license also found to be in good standing ("Somalis for Simoleons" doesn't scan)

  • Quo Usque Tandem||

    Good, Another "field study" in a place that I do not reside.

  • And you believe that why?||

    I like this news. Minnesota's median income is closer to where I live. It will be good to have data to use to run a counter-campaign, if necessary.

  • RabbitHead||

    Coincidently, today is the three year anniversary of the closing of my Minneapolis restaurant. I never lost money, but there were years when my lead server made more than I did. I also moved out of town.

    Not renewing that lease was the best decision ever. They have been heading in this direction for years.

    I do expect business in the first-ring suburbs to pick up.

  • OGREtheTroll||

    Its a rough business. People don't understand. I often have to explain that a store making $1.5M in sales means the owner is lucky to pocket $60K a year...if hes the sole owner and doesn't have to split that. And hes probably there 80 hours a week too.

  • BestUsedCarSales||

    Almost no one understands business. I have a friend who runs the store, and people are consistently confused that he doesn't just want inventory hanging around forever. Like, people don't understand that stores have goods to sell, that it ain't worth shit to them.

  • NotAnotherSkippy||

    Downtown is a pain in the ass anyway. Parking is much better in the burbs.

  • OGREtheTroll||

    If a restaurant can't take the tip credit then they can go ahead and pool tips for the entire staff, including cooks and dishwashers. Or just do away with it entirely, because why suck more money out of customers that isn't going to the businesses bottom line? Ban the tipping and raise prices to offset the wage increase; customers don't pay as much as they would with tipping, and the servers make less than they did before the wage increase took effect.

    But theres no way those restaurants are going to pay the servers minimum wage and still let them take home a tax on the customers of 20% of gross sales.

  • RabbitHead||

    Management can't include employees "who don't normally receive tips" like cooks in mandatory tip pools. Nor can they include managers, supervisors or anybody with an ownership stake. (which included my 12 year old daughter when she bussed tables, and the lead server) so divvying it up among the staff isn't easy

    This is the death blow to little independent budget diners. The only way to stay afloat at those wage rates, and serve people for less than $15 a meal is going to be counter service using disposables. No dishwashers, No servers. Not so green, but what can you do?

  • Queen Screwup||

    It amazes me how many people in this country are too stupid to know the purpose of minimum wage and are willing to be forever underpaid. Worst part is that they're breeding. Ugh.

  • Enemy of the State||

    Progressives to humanity: My good intentions trump your economic reality...

  • rudehost||

    I don't completely mind these progressive experiments. Just like Detroit places like Seattle and Minneapolis will make great cautionary tales about what progressive policy leads to. It does suck for proggie victims but then again most of them likely voted for the abuse.

  • Jimothy||

    It's the perfect progressive policy: it's generosity using someone else's money, and when people lose hours or jobs as a result, it just goes to prove what they already knew. Business owners are nothing but money hungry, therefore, we need more government policies to protect workers (or former workers, who lost their jobs because of the last policy designed to protect them).

  • Qsl||

    I really wish they would try these experiments Podunk, Alabama; you know, places with actual grinding poverty. I mean if these experiments don't affect employment and help the poor, then you should start seeing a flourishing in Small Town, USA. Strangely these experiments only take place in areas that were wealthy to begin with.

    I'm actually perturbed that Seattle and Minneapolis are taking up the cause. These are great cities and you are jeopardizing a ton of capital investment just to test if the price of labor affects business (again). All of those factories in China must be there for the climate.

    Much like domestic abuse victims, the refrain "trust me, this time it's different" will be heard until there are bodies stacked like wood in the basement and there is no one left to question how clumsy you must be to be so bruised all the time.

  • DrZ||

    ""We've tried to show them the numbers and show them the math, they absolutely, staunchly refuse to listen," she said"

    Try to talk sense to a liberal is like talking to a wall.

    They will come down on those of us who are skeptical about "climate change" as being unscientific, but when it comes to hard numbers that deal with the economy, liberals are deniers.

  • Nate Pickering||

    No, science only counts when it dovetails with your political agenda and makes you feel happy. Did you not get the memo?

  • Trollificus||

    It didn't have a cover sheet so I assumed I didn't have to read it.

  • Tionico||

    maybe its time the folks of Minneapolis go find a bit broom and give the stupid council a clean sweep..... sounds like they could not care less about the people who supposedly elected them. Maybe they will care a bit more after they are removed from office. Could not happen to a more deserving lot.

  • DRM||

    St. Paul, assuming it can avoid idiocy, will be a great beneficiary.

  • MarkLastname||

    Cue prog complaints about a 'race to the bottom.'

  • Mark22||

    [Sarah Norton:] It basically just implies that we have to use our feminine wiles to get tips.

    Honey, you ain't got no "feminine wiles", you got cankles and a hair-don't.

    As a customer, I want quick, efficient, accurate service, a polite demeanor, and a professional appearance. You should try those some time and maybe your tips would increase.

  • Budbug||

    "Maybe this time it will work!"

    The Liberal Mantra

  • ||

    I say bring in all the robots. For doctors, truck drivers, the whole fucking fast food chain of production. Everything. Now.

  • Uncle Jay||

    RE: Minneapolis City Council Ignores Damning Seattle Study, Passes Its Own $15 Minimum Wage
    Workers and business owners have pleaded with council members to consider the cost of their action.

    Oh, goody-goody!
    Now Minneapolis had joined Seattle and LA in the race to the bottom of the economic ladder.
    Won't life be wonderful in Minneapolis as more people become unemployed and business fold?
    Jesus of Nazareth got it wrong.
    The love of money is not the root of all evil.
    Altruism is the root of all evil.

  • R. K. Phillips||

    Silly Uncle Jay—you are making the error that any politician could be a genuine altruist.

  • ||

    Well, the rise of the Minimum Wage was meant for the Rich to share their wealth to people whom they benefit from. But, unfortunately many today just don't want to share...

    Truly sad... these are just the norms of today...

    "But know this, that in the last days critical times hard to deal with will be here. 2 For men will be lovers of themselves, lovers of money, boastful, haughty, blasphemers, disobedient to parents, unthankful, disloyal, 3 having no natural affection, not open to any agreement, slanderers, without self-control, fierce, without love of goodness, 4 betrayers, headstrong, puffed up with pride, lovers of pleasures rather than lovers of God, 5 having an appearance of godliness but proving false to its power; and from these turn away. 13 But wicked men and impostors will advance from bad to worse, misleading and being misled."
    (2 Timothy 3:1-5; 13)

    The Good News is:

    "When the wicked sprout like weeds And all the wrongdoers flourish, It is that they may be annihilated forever." (Psalms 92:7)

    -According to Chronology, the Bible is 3,500 years old, & if you doubt this, go to a *Museum not the Internet. The Bible has been translated into about 2,600 languages, and billions of copies printed & distribute. More than 90 percent of the people in the world can read the Bible in their own language. And each week, more than a million people get a Bible! Yes, there is no other book like the Bible. Have a Bible question?

  • Sevo||

    "Have a Bible question?"

    Why does in include nonsense about a guy who has never been shown to exist?

  • And you believe that why?||

    I must confess I have had the wrong understanding of tipping my whole life. My first job was in a restaurant and I've done everything I can to avoid working in one again since. This leads me to assume the only reason anyone else would take the job is because they are stuck. As I know how hard it is to do a despised job well, anyone who can do a reasonable job deserves a little bit of outside help to improve their station in life. Therefore, in my mind, the tip has always actually been an act of charitable giving. We just give it the income label so those that receive this charity can have their safe space. It is also best to pay the tip in cash. This allows the person getting your donation to use it toward there most pressing concerns. Hopefully they make the choice to better themselves. If not, hopefully they got some joy before having to return to service.

    Now that I know that tipping is the publicly acceptable form of paying for prostitution I guess I'll have to stop. I've never had to pay for the real thing in life and there is no need to pay for that particular service either.

  • gordo53||

    Fiscal responsibility or at least the traditional notion of what that is has all but disappeared from government. If $15/hr is good, then why not $20/hr or even $25/hr? Try supporting a family of four on $15/hr. Not much fun. So let's throw caution to the wind and pay our low skilled workers a livable wage. One way to look at it is as a huge government subsidy for intelligent automation. The loss of many low skilled jobs to automation is all but a given. Might as well speed up the process.

  • jmlandry||

    Ahh the Minneapolis city council. As a property owner in Minneapolis and a landlord I have seen the insanity with my own eyes.

    First, if you are signing a lease you must furnish voting information to your tenant so they are not disenfranchised.

    Next they are trying to force all landlords to consider Section 8 tenants. Most don't want to rent to them because of additional inspections, paperwork etc...

    If you ever go by City Hall you can see the $60,000 water fountain that the city council had installed.

    Not to worry, if you are a woman or a minority you are eligible to provide food service for the upcoming Super Bowl! Women and minorities only please.

    Fucking idiots.

  • Butler T. Reynolds||

    "We've tried to show them the numbers and show them the math, they absolutely, staunchly refuse to listen,"

    While they f-ing love science, they really f-ing hate math.


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