Stillwater cafe charging 'minimum wage fee'

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Liberal Minnesota blogger Sally Jo Sorensen earlier this week posted an item about a restaurant receipt from a Stillwater cafe (above), which includes a 35-cent minimum wage fee.

MPR News blogger Bob Collins and CityPages also picked up the story about the River Oasis Cafe tab.

During a long statewide debate, many restaurants were among the businesses most opposed to Minnesota's new minimum wage law, which went into effect Aug. 1. The law raised the rate to $8 for most large companies, the first of three annual increases that will hike the standard to $9.50, and some small businesses have said they would be forced to pass on the wage hike to customers.

The receipt above was posted to Facebook a few days ago by the friend of someone who ate at the cafe, who was critical of the little eatery, noting, "Don't you wonder how that makes your employees feel, making them look like the bad guys to their customers."

Another Facebook poster called the new fee a "customer service debacle."

But the cafe responded with several explanations, noting, "We're just trying to figure out how to offset what is a very real cost."

The cafe notes on Facebook:

"With regards to why we're charging a $.35 fee to cover the recent $.75 increase in minimum wage…we estimate the increase in labor cost will will cost our company more than $10,000 per year…which has to be offset by an increase in revenue in order to operate profitably. Rather than increase the prices of our menu items, we chose to charge a flat fee. If the state of Minnesota would pass tip credit, like 43 other states have done, none of this would be necessary. For what it's worth, we pay our people very well. Our dishwashers start at $10/hour, our cooks start at $12/hour and our servers average more than $20 when you consider what they earn in tips."

WCCO reports cafe owners were on vacation but look forward to returning to join continuing debate on the issue.

Minimum wage debate

There has been much public and legislative debate about what effect the law would have on the state's small businesses, and many owners said they would have to pass on the increased labor costs to consumers.

Throughout the debate in the Capitol, DFL lawmakers had argued the wage hike would raise the spending power of working-class Minnesotans. Republicans said small businesses would suffer.

The ultimate economic effect of the 5-day-old law remains to be seen. A few small businesses may close in part because of the wage hike – and that will have a real impact on the lives of people who work there, experts note. But the net effect of the new law on the state's overall economy is unlikely to be significant because there is always churn among small businesses, one economist told the Pioneer Press.

For now, debate isn't fading, and it resurfaced again just this week, as four Republicans vying to unseat DFL Gov. Mark Dayton noted that they were not fans of the new state law, MPR reported. Candidate Scott Honour said he would freeze the minimum wage where it is and work to strip out the provisions in the law that would index future wage hikes to the rate of inflation.

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