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Continued: Schafer: Small raise for workers means a big cut for owners

  • Article by: LEE SCHAFER , Star Tribune
  • Last update: August 16, 2014 - 8:21 PM

But that’s the law, and Landgraff said he teased his client that the solution seemed obvious: Find one good employee capable of doing the jobs of two people. His client wasn’t that amused.

Landgraff said any restaurant operator still in business in 2014 is pretty savvy about minimizing labor hours, so cutting staff hours further would be very tricky.

Cutting hours doesn’t mean shortening the hours open for business. It means instead of six servers coming in at 10:30 a.m. for lunch, three would come then and the rest later. The minute the manager sees the lunch traffic slow down, she starts sending servers home.

The risk, of course, is that five minutes after sending two servers home, nine tables of guests show up and service then slips enough to have some think twice about ever coming back.

A price increase is also challenging to implement, with lots of other meal and entertainment options available to customers.

So it’s easy to see why one owner, of the Oasis Cafe in Stillwater, decided to try a small fee. It was a price increase, but signaled to the customer that more money wasn’t going to the house.

It was something less than completely successful, considering the storm that later blew up on social media. Even Gov. Mark Dayton described the move as “tacky” and all but called for a boycott.

That kind of criticism of a small-business owner by the state’s governor certainly seems, well, a bit tacky.

The increase that just took effect is not, of course, a one-time event. The minimum-wage steps up an additional $1 per hour next year and 50 cents in August 2016.

Without even looking at a spreadsheet, you know the lost income for Landgraff’s client over the 12 months after next year’s increase will be close to $55,000. Unless other costs are cut, after the second raise gets implemented his income may have been nearly cut in half.

Founder Luke Shimp of the popular Red Cow restaurants, with locations in Minneapolis and St. Paul, is already looking ahead. He just increased prices for some main menu items, an increase he called “minimally invasive” to his customers, to make up for this year’s wage increase. He knows he won’t be raising prices again next year.

There is, he said, only so much he can charge for even the best mushroom-swiss burger.

“I hate to say it,” Shimp said, looking ahead to the wage increase next August, “but I don’t have a plan.”

lee.schafer@startribune.com • 612-673-4302

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