Server forum on tips, Minneapolis minimum wage reveals industry confusion

About 80 people gathered Monday night at Northbound Smokehouse and Brewpub for a listening session designed for service staff to explain why the living they earn in tips should exempt them from a rise in the minimum wage.

Tips are the flash point in a minimum-wage debate at Minneapolis City Hall, and the servers who organized the event on Monday say that if the minimum wage rises across the board, restaurant prices will either rise ruinously, or independent restaurants will have to close or replace waiters with electronic tablets to take orders.

But it took more than an hour for someone to make that point. Restaurant owners got three of the first four speaking slots, and the next three speakers were waiters or bartenders who argued from the other side of the debate, saying that the minimum wage should rise for everyone, including servers.

"This policy of having no tip credit or tip penalty, just having a flat $15 an hour minimum wage, is coming because right now we have some incredible income disparities," said Matt Barthelemy, a bartender at Du Nord Craft Spirits.

Barthelemy said he leans toward a gradual rise to $15, without a carve-out for servers, as a way to combat income inequality and racial economic disparity.

Sarah Webster Norton, one of the event's organizers, responded that while racial disparities are a problem in Minneapolis, they are not relevant to the debate over tips.

"This argument that we're having today is not about that. We're not talking about race today. We're talking about income," she said.

"I lived in Sweden where the minimum wage was $22 an hour, and believe me, they still tip," Meldrum said.

Then Drew Madland, a server at Young Joni, said the organizers of the Pathway to 15, the Minnesota Restaurant Association, are talking out of both sides of their mouths. They argue for a carve out from the minimum wage for tipped workers in Minneapolis, but are also supporting a GOP-led effort at the Capitol to block local labor ordinances, including any sort of municipal minimum wage.

"The Pathway to 15 in theory assumes that we're all for that, right? But [the bill recently passed by the Minnesota House] would not only prohibit us from setting our own minimum wage but it would roll back sick time," Madland said. "All this conversation we're having would be pointless."

Servers who support an ordinance in which tips are counted toward the minimum wage found their footing when Michaelann Gillis stood to speak. A Smack Shack server who was bouncing her 8-month-old daughter on her knee throughout the meeting, Gillis made the business case for why a server's minimum wage should stay at $9.50.

"I'm a homeowner at $9.50 an hour because I'm good at my job," Gillis said. "I make respectable money. And I'm afraid that the $15 an hour will jeopardize my owners. Smack Shack is a big deal. It makes a lot of money. But guess what, it has a lot of overhead."

"He's not sitting in a $5 billion mansion on the lake. He's a real man and a real person, and $15 an hour affects a large company like that. What's it going to do to the little guy next door?" Gillis said.

Clara Schultz, a server at Rare Steak & Sushi in the Grand Hotel who is putting herself through college at the University of Minnesota, said she agrees with Gillis that failing to count tips toward the minimum wage would hurt small businesses.

Schultz grew up in Minneapolis' Seward neighborhood on her mother's Social Security payments, and said the tips a server can make are a critical path out of poverty.

"It's kind of a nice loophole for the poor," Schultz said. "If you have a particular personality, you can make a lot of money."

The real problem in the restaurant industry, she said, is not that servers don't make enough money, it's that servers are almost all white.

Adam Belz • 612-673-4405