Tipping the pay scales carefully

To all the hospitality workers whom Tom Emmer enraged by suggesting a cut in their base wages, the Republican gubernatorial candidate offered an idea late this week: Let's meet.

On Friday, DFL challenger Margaret Anderson Kelliher countered by offering cold, hard cash: a proposed minimum wage increase of $1.50 per hour for all of Minnesota's lowest-paid workers.

"Clearly, Tom Emmer is out of touch with the challenges facing hard-working families struggling in this economy," said Kelliher, who is speaker of the Minnesota House. "What he has proposed is no different than stealing tips off the tables of working people."

Emmer infuriated many restaurant workers Monday when he said he would support reducing the minimum wage for hospitality workers who earn tips. Minnesota is one of seven states that forbid employers from using a "tip credit" that would allow them to pay less than the full minimum wage otherwise required by law.

Emmer then added to the fury when he said an owner of Eagle Street Grille in downtown St. Paul told him three of the restaurant's servers made more than $100,000 a year, including tips. The owner later said Emmer misspoke. The criticism was immediate and sometimes searing, with many servers saying they work two and sometimes three jobs to make a fraction of that sum.

Emmer's assertion became fodder for talk-radio shows and editorial pages statewide. Democrats swiftly launched a website called serversagainsttomemmer.com, which lists a special of the day: "Wage cuts."

Emmer's team quickly sent an e-mail to calm supporters and clarify his position. Emmer said he favors the "tip credit" as a way to reduce costs for employers, which would allow them to cut prices and hire more workers.

State's wages rank low

Kelliher, meanwhile, proposed raising the minimum wage to $7.65 for employers with annual sales of more than $625,000. The minimum wage would rise to $6.75 for smaller employers.

At $6.15 per hour, Minnesota has the nation's 44th-lowest minimum wage, lower than all neighboring states and even Arkansas.

"As a working mom with two kids in public schools, I know how hard it is to save the money to give my kids the opportunity to succeed," Kelliher said Friday. "In these difficult times we shouldn't be cutting wages for middle-class families."

On Thursday, Emmer surprised supporters and some Republican strategists when he announced a town hall meeting with people in the hospitality industry for 3 p.m. next Wednesday at the Ol' Mexico restaurant in Roseville. The meeting could be testy, as critics are planning to jam the event.

Even fans of Emmer's Facebook page expressed concern. One wrote: "Votes are being lost over this issue. Is this really worth handing this office to the Dems so easily?"

A 'robust' dialogue

Campaign spokesman Bill Walsh offered a positive take, saying the issue has generated "robust" dialogue.

Walsh said Emmer didn't wake up that day planning to talk about the "tip credit," but it came out when a reporter asked about it. "We are not going to script every moment of this campaign," he said. "The tip credit gets a little off message, but it's tangentially related to jobs," a central theme of Emmer's campaign.

On Wednesday, Republican House Minority Leader Kurt Zellers sent a letter to GOP members with talking points on the "tip credit" issue. "When talking about tip credit, keep in mind the issue is not one that plays well with the general public, as they are sympathetic to restaurant servers," he wrote.

Kelliher's DFL challengers embraced her call to raise the minimum wage.

"People who work 40 hours a week should be able to support himself or herself and their families and work toward the American dream," said DFL gubernatorial candidate Mark Dayton.

"As DFL House leader in 2005, Matt Entenza got the last minimum-wage increase in Minnesota signed into law despite [Gov.] Tim Pawlenty's threatened veto, and as governor he will work to make sure we see another," said Entenza spokesman Jeremy Drucker. "After five years of neglect, the purchasing power of the minimum wage has declined dramatically, and it is past time it be raised again."

Potential effect uncertain

Minnesota's minimum wage is $6.15 an hour for companies that earn more than $625,000 annually 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.

A company that makes more than $500,000 a year or operates in more than one state already must pay the federal minimum wage of $7.25.

Last year, when the federal minimum wage was $6.55 an hour, the state estimated that 48,000 Minnesotans made less than that.

While raising the minimum wage can help a worker's bottom line and pump more money into the economy, some economists warn that increasing the base wage can cause businesses to cut staff or delay new hires.

Legislators outside of the gubernatorial skirmish are trying to stay clear of the battle.

State Rep. Paul Torkelson, R- Nelson Township, said he would rather not talk to voters about Emmer's tip credit idea, but Kelliher's plan seems "a bit too far" in the other direction.