Our leading Twin Cities restaurant owners are increasingly struggling to manage their exploding labor costs without the essential tip credit for servers to partially offset increasing minimum wage requirements. Now more than a year after city councils in Minneapolis and St. Paul disrupted restaurant economics by eliminating the tip credit, survival of full-service restaurants is clearly in jeopardy.
With razor-thin margins around 3%, the additional cost of paying servers higher minimum wages without the prior offset of the tip credit will soon wipe out their entire profitability. Full-service restaurants may have no choice but to either aggressively raise prices against strong consumer resistance or impose a surcharge on all checks and eliminate tipping. With many servers earning $30-100 per hour in tips alone, such a surcharge to be shared with support staff would reduce servers' take home pay dramatically. Every server I know understands this attractive tip income may not be sustainable without the tip credit.
Several great local restaurants have already closed for labor-cost reasons and others are on the edge as they cut support staff, implement counter ordering or have chefs serve food directly out of the kitchen. San Francisco with its $15 minimum wage and no tip credit is "killing its restaurants," according to the Wall Street Journal. If the councils' primary goal is to see the minimum wage at increasingly high levels, why not immediately guarantee servers $20 an hour with a restored tip credit. Restaurant owners would embrace such a lifeline enthusiastically.
Bob Macdonald, Minneapolis
INSULIN
Legislators, your watches are slow
I commend Minnesota's elected officials for trying to create an affordable insulin program, but they don't know what "fighting the clock" really means ("Dueling insulin plans are proposed," front page, Nov. 12.) They've debated this matter since last winter and now they're hoping for a special session before the Legislature reconvenes — in February 2020.
Meanwhile, people with diabetes can die within days of running out of insulin. How would you like to fight that clock?
Every 35 minutes another Minnesotan is diagnosed with diabetes, according to the American Diabetes Association. Many of them cannot afford insulin. Yet the clock doesn't stop ticking.
Steve Greenfield, Duluth, Minn.
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Regarding insulin legislation, why aren't we hearing from Minnesotans who depend on other life-sustaining, expensive drugs?
Sara amaden, Edina
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As I understand it from Tuesday's paper regarding insulin, the GOP wants to have patients go to their doctor's offices, submit a form for the doctor to review, have a staff member contact the drug manufacturer, wait for the insulin, and finally have the patients return to pick it up. Whew!