Minimum wage differences affect border towns

HUDSON, Wis. – Kris Grove regularly drives west past the Shanghai Bistro here on her way to work as a server at the other Shanghai Bistro just over the river in Stillwater.

The Wisconsin location is closer to her home in River Falls, but differences in the states' minimum wage laws allow the Hudson bistro to pay servers only $2.33 an hour plus tips — while the Minnesota side pays $8 an hour, plus tips. And with bumps each of the next two years, that starting salary will hit $9.50 in 2016 under Minnesota's new minimum wage law.

In the national debate about minimum pay, the 10-mile gulf between the Shanghai Bistros offers a look at what happens when states chart different courses for low-wage service workers. While Minnesota's higher minimum wage took effect last month, Wisconsin has kept its base rate of $7.25 for most workers and a third of that for tipped employees. Its Legislature took up the issue earlier this year, but it didn't pass, even as Wisconsin's neighboring states, Minnesota and Michigan, both approved increases.

A handful of Wisconsin counties, from Milwaukee to La Crosse and Eau Claire in the western region, will have advisory referendums in November asking residents if Wisconsin should raise the minimum wage to $10.10. But those measures will have no binding power, unlike ballot measures in Nebraska and South Dakota, which are all asking voters to raise wages for the lowest earners.

Interviews suggest that it is too soon to gauge the effect of Minnesota's new law on the Wisconsin workforce, but managers at the Shanghai Bistros described the problem of western Wisconsin workers crossing the river as a long-standing pattern that will likely intensify with the wage hike.

Critics of minimum wage increases argue they raise prices and make it harder to secure entry-level jobs, as businesses have to cut back on employees. That's been the case at Stillwater's Shanghai Bistro, where bar manager Phillip Werner said the food costs a little more due to Minnesota's higher wages, insurance and taxes. The Teriyaki salmon is $17 at the Minnesota bistro, but $15.50 at the Wisconsin one.

Landing a job in Stillwater is more difficult because the business cannot afford as many servers as it has on the Wisconsin side and servers need to be experienced enough to handle more tables than in Hudson.

The Minnesota bistro receives many applications from Wisconsin residents, some of whom balk at his suggestion to work in the Hudson location. Werner sympathizes.

"What would you do?" he asked.

President Obama, who wants to raise the minimum wage to $10.10, appeared in Wisconsin over Labor Day weekend, voicing solidarity with a movement by fast-food workers to more than double the minimum wage to $15 an hour. Hundreds of fast-food employees protested and went on strike Thursday in big cities across the country, including in Milwaukee, where a U.S. congresswoman was arrested.

The issue has already surfaced in the Wisconsin governor's race, with Gov. Scott Walker accusing opponent Mary Burke of only backing a minimum-wage increase to $10.10 because she doesn't have a real jobs plan. Walker has spoken adamantly against raising the minimum wage, saying that such positions are largely for young people starting out and voiced caution about limiting opportunities for them when youth jobless rates "are still way too high."

Until Aug. 1, Minnesota's minimum wage was less than Wisconsin's and below even the federal level, at $6.15. But the state always mandated that tipped workers receive the same pay, unlike its western neighbor.

"I cannot attract a good adult employee into my business offering them minimum wage," said Brandner.

While he doesn't plan to scale back on his business west of the St. Croix, Brandner maintains that customers should expect to see lower prices for casual dining in Wisconsin border towns as a result of their wage differences.

In Superior, Wis., McDonald's employee Kourtney Sande is much like the low-wage worker Walker has described. She balances college classes with up to 30 hours a week taking orders for Big Macs and fries, and knows her career will one day hold more than her $7.40 an hour position.

Yet with a raise of only 15 cents in the last four years, Sande has wondered if she should try to land a higher-paying job by crossing over to Duluth. She likes her job and appreciates her bosses' willingness to give her flexible hours, but she needs the income to help pay her tuition.

"I love the state I'm from … but I wish it could catch up a little bit and not think that people can live off $7.25 an hour," said Sande.

More than a dozen Wisconsin counties and cities will ask voters in a ballot question in November if they support increasing the minimum wage to $10.10. While some critics decry the move as a ploy to raise Democratic turnout, supporters hope it will heighten pressure on state lawmakers.

"There's a strong belief among working people that if you work full time you shouldn't have to need food stamps," said Bill Brockmiller, president of the Western Wisconsin AFL-CIO in La Crosse.

Many of the servers in Stillwater already have returned to college in Wisconsin, including Grove's 19-year-old daughter. But Grove, 46, is not going anywhere.

She worked for two decades as a server in Wisconsin, preferring to be close to home while her children were young. Later, she realized she could triple her earnings by driving just a little further west. Grove knows many others who do the same, including a single mother she worked with in River Falls who left for a job serving tables at the Olive Garden in Oakdale.

Werner, the bar manager, asked Grove if she'd like to work at the Hudson Shanghai Bistro over the winter, when business slows down in Stillwater, without its expansive patio.

Maya Rao • 612-673-4210