Republican gubernatorial candidate Tom Emmer rekindled a smoldering debate Monday when he said minimum-wage workers who earn tips should have their wages reduced.
Minnesota is one of seven states that forbids employers from using a "tip credit" to avoid paying the full minimum wage otherwise required by law. The prohibition unfairly burdens restaurants and small business owners and makes prices higher for consumers, and it should be ended, Emmer said.
"We want to make sure that everybody's successful. Not just the employees, but the people who want to enjoy our restaurants," Emmer said. "The employees can't survive -- they can't take home the money they want to -- if there aren't customers, and, more importantly, if the owners ... can't provide the jobs."
Emmer spent the morning at the Eagle Street Grill in downtown St. Paul, where he said restaurant co-owner Joe Kasel told him three of the restaurant's servers "take home over $100,000 a year," including tips.
"Joe's happy his people are doing well -- he wants them to," Emmer said. "He also wants to stay in business."
Minnesota's minimum wage is $6.15 an hour for companies that earn more than $625,000 in sales and aren't covered by the federal standard of $7.25 per hour. For smaller companies, the state minimum wage is set at $5.25 an hour.
While federal law allows states to drop the minimum wage to $2.13 an hour for restaurant workers and others who earn more than $30 a month in gratuities, Minnesota doesn't let employers adjust the minimum wage. Also without a tip credit are Alaska, California, Montana, Nevada, Oregon and Washington, plus Puerto Rico.
Rep. Margaret Anderson Kelliher, the DFL-endorsed candidate for governor, said in a statement that a "tip penalty" would allow "employers to cut wages even deeper for hard-working Minnesotans. That's wrong. As a working mom, I know how hard it is to balance the checkbook at the end of the month. And in this economy, every dollar matters."
DFL spokeswoman Kristin Sosanie called Emmer's stand "appalling."
"We need a governor who will fight to get Minnesotans back to work, not take money out of the pockets of middle-class families and force them to worry even more about how they're going to pay the bills during these difficult times," she said.
DFL Candidate Mark Dayton also disagrees with the proposal.
"It's totally wrong to be trying to take money away from hard-working men and women," he said in a statement.
DFL hopeful Matt Entenza blasted Emmer's plan. "Once again, Tom Emmer proves he doesn't get it," Entenza said in a press release. "While thousands of working men and women are struggling to make ends meet he's proposing cutting into the wages of lower-income earners.
About 4.5 percent of Minnesotans make the state minimum wage or less, according to the most recent report from the Minnesota Department of Labor and Industry. Of those, about 37 percent receive additional pay in the form of overtime, tips and commissions.
Discussions of tip credits often turn heated and partisan.
In 2008, Republican Gov. Tim Pawlenty vetoed a bill that would have raised the minimum wage to $7.75 because it didn't include the tip credit for hourly service workers. Emmer voted against that bill. In 2005, DFLers defeated a tip credit amendment.
Emmer said he supports reinstituting the credit, which he said hasn't existed in Minnesota since 1990. He quoted a 2008 Hospitality Minnesota survey of restaurant owners that said state servers make an average of $15.43 an hour in wages plus gratuities.
"Minnesota's menu prices are comparable to California and New York," he said. "We have some of the highest prices in the country. It just gets passed on to consumers."
Jackie Crosby • 612-673-7335