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Minneapolis won't hit $15 minimum wage for years, so why is Whiskey Junction closing now?

It cites the impending minimum wage hikes, but it won't hit $15 for small businesses till 2024.
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The Whiskey Junction this week became the first bar-restaurant to blame the impending Minneapolis minimum wage hike for its closure.

The biker bar in Cedar-Riverside announced on Tuesday it'll be closing its doors for the final time on Dec. 31, with owner Tom O'Shea pinning the blame on Minneapolis voting in favor of a $15 minimum wage without a tip credit.


What is the tip credit? And why does the Minneapolis mayor not like it?

"Unfortunately, after recent changes in the Minneapolis ordinances regarding minimum wages and primarily the lack of a tip credit provision, we feel now is the time to get out of the bar business," he wrote on Facebook.

"We fought for a voice to explain how minimum wage without a tip credit will be detrimental to the small bar and restaurant owners of Minneapolis but we were not listened to. Therefore its on to the next adventure!"

While Minneapolis voted for a $15 wage that doesn't take into account tips, it won't be until 2024 that small businesses with fewer than 100 employees – including most restaurants – will be required to pay that as a minimum wage.

These businesses won't see their first incremental minimum wage hike until July 1, 2018, when it rises to $10.25 an hour for small Minneapolis businesses. 

So why close now, if there are still seven months before The Whiskey Junction will have to start paying a higher base wage?

GoMN got back in touch with the bar to find out more behind the decision, with spokeswoman Sara O'Shea saying it was taken with the future in mind.

"A smart business operates on a 5+ year plan," she said. "If you don't foresee being able to be successful in that time, quitting while you're ahead may be the best decision.

"As of now, the staff is paid, bills are paid, we are in the green. We don't foresee a long-term future for the business and have made the very conscious decision to close now."

'We won't be the last'

The absence of a tip credit in the minimum wage ordinance was cited as only one of the factors in the decision to close, but the bar added that "in an already difficult industry, it played a huge role in the decision to get out now."

"We may be the first to outright say this is a factor, but we won't be the last," Sara O'Shea said. "Some will follow suit in getting out while ahead, some will try for a while to make it work and fail, a few will be able to figure it out.

"Unfortunately for the diverse restaurant industry in Minneapolis, most of those that make it will likely be corporate," she added.

Members of the Minneapolis restaurant industry were in court on Friday, fighting a lawsuit against the city to stop it from implementing a higher minimum wage without a tip credit, KSTP reports.

Organizations including the Minnesota Chamber of Commerce are seeking a temporary injunction so the new minimum wage for large employers doesn't rise to $10 an hour on Jan. 1.

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