Republican gubernatorial candidate Tom Emmer revealed more than he likely intended Monday when he proposed a reduction in the state-mandated minimum wage paid to tipped employees, most of them restaurant servers.
On Monday, the GOP endorsee attempted to cast himself as a friend of restaurant owners and their customers who would stand to gain from lower labor costs if Minnesota allowed a "tip credit" exception to the state minimum wage.
That wage is $6.15 per hour for employees at establishments with more than $625,000 per year in sales and $5.25 for smaller employers. Federal law allows states to reduce that wage to as little as $2.13 an hour for employees who make more than $30 a month in gratuities -- a difference known as the "tip credit." Minnesota is one of seven states that does not permit a minimum-wage discount for tipped employees.
On Tuesday, Emmer appeared to be trying to add that he's a friend of tipped employees, too. He posted on his website (www.emmerforgovernor.com) a University of Nebraska economists' study that argued that wait staffs in states with a tip credit make as much income as those in states without the credit. The reason: Labor market forces and interstate competition compel restaurants to pay comparable wages in all states, regardless of disparate minimum-wage laws.
The result is a contradictory message with a cynical aftertaste. Emmer appears to be telling business owners that he wants to do them a favor at their workers' expense. Then he tells those same workers: Don't worry. Your employers will discover they can't really lower your pay, no matter what state law says.
Emmer made matters worse by repeating a tidbit he credited to restaurant owner Joe Kasel of St. Paul's Eagle Street Grille. Three servers there "take home over $100,000 a year," Emmer said Monday.
With the $100,000 claim, from which Kasel later backtracked, Emmer made himself appear gullible and out of touch with reality. Most of the state's 45,000 waiters and waitresses take home much less. State data puts their median wage, tips included, at $9.36 an hour. Even if a waiter at the median worked 40 hours a week -- and most don't -- his annual income would be less than $20,000.
In his remarks on Monday, Emmer hinted that his real interest may lie in a full repeal of the state minimum-wage law. "It's the free market only up until you start talking about the minimum-wage law," he said in response to a reporter's query about whether highly tipped restaurant servers were not simply a consequence of the marketplace at work. Emmer indicated he would not object to their earnings if they weren't backed by a state-mandated minimum wage. He was asked: Should that law be repealed? "I don't know if you could do that," he replied.
The tip credit remarks arose during Emmer's multiday "Freedom and Prosperity" campaign tour. That context says much about Emmer's still-unfolding plans for pursuing prosperity. He's suggesting that the state will gain if government frees employers to ratchet down the pay of already low-wage workers.
That's a far cry from the policy priority recommended by leading economists, including state economist Tom Stinson and the Federal Reserve Bank's Art Rolnick. They've often argued that Minnesota's policies should be tailored to fit this state for participation in a knowledge-based global economy.
It follows that the asset state government should prize and prioritize is its human capital. Minnesota needs a campaign debate focused on how to increase workers' skills, not on reducing their pay.