Opposition to raising minimum wage fails scrutiny

  • Article by: KRIS JACOBS
  • Updated: March 20, 2013 - 9:03 PM

The majority of small Minnesota businesses have no employees besides the owners, so the increase wouldn't apply.

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Restaurant owners are pleading in these pages, in commentaries and letters, for the legal right to cap and freeze the wages of their servers immediately if the minimum wage should be raised this legislative session.

While it’s true that many servers make more than the minimum wage with tips, most are not employed in high-end restaurants. According to the Bureau of Labor Statistics, the median wage for servers in Minnesota (including tips) is $8.84 per hour.

Another argument used by the hospitality industry is that if owners weren’t paying servers so handsomely, they’d be paying cooks and kitchen staff better. If this were true, cooks and kitchen staff in surrounding states (where there is a tip penalty on servers) would be better paid than in Minnesota. But the opposite is true. In the four states bordering Minnesota, restaurant cooks are paid an average of 58 cents per hour less than in Minnesota. Dishwashers in these states are paid an average of 25 cents per hour less than in Minnesota.

The latest Minnesota Job Vacancy Survey provides no evidence that low-wage industries have fallen on hard times. Although the survey shows that we have more high-wage openings than we’ve had in years, it also shows that we have as many low-wage job openings as ever.

More than a quarter of all openings are in two large industries — retail trade, and accommodation and food services. For openings in these two industries, the combined median wage is $8.31 per hour.

In both of these low-wage industries, job openings fell sharply during the Great Recession. But they have increased dramatically over the last three years. In retail trade, job openings rose by 183 percent; in accommodation and food services, they rose by 224 percent.

Finally, there’s the matter of the vast damage supposedly inflicted on thousands of mom-and-pop shops all over the state: According to the U.S. Small Business Administration, 76 percent of Minnesota’s small businesses are owner-operated, with no employees, which means that for the great majority of small businesses, the minimum wage is an issue of no consequence.

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Kris Jacobs is executive director of the JOBS NOW Coalition, a statewide advocacy group for low-wage workers.

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