Refuting Emmer’s Myths

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(For my previous posts on Tom Emmer, click here)

For those of you who haven’t been following the Tom Emmer story in the last week, let me bring you up to speed.  Last Saturday in one of the most patronizing publicity stunts I have ever witnessed, Tom Emmer “waited tables.”  I put this in quotation marks because all he really did was shadow a server around a restaurant for a couple hours.  He did no sidework and probably did not even spend the evening living on the $60 his trainer made.  He followed this up with a townhall meeting on Wednesday where he faced a room of angry servers and sycophantic supporters who clearly were not servers.  He faced some pointed jabs, a bag of pennies, and expertly dodged some question.

Here are some of the points Emmer attempted to make at this meeting:

-Servers just don’t understand tip credits

-A tip credit will not reduce server wages.

-If restaurant owners pay their servers less, menu prices will drop and people will tip more.

-The minimum wage is the reason restaurants don’t pay more than minimum wage.

-In 2005 he did vote to eliminate the minimum wage, but that same day he voted to raise it to $9.25 or $9.75 an hour.

I will address these one by one in an effort to provide clarity to the murky waters Emmer is attempting to create.

Tip credits are a tool sanctioned by the federal government and adopted my many states to allow the employers of tipped employees to pay them less than the minimum wage.  This can only be done when the total of the tips they receive plus the lowered minimum wage is equal to or higher than the full minimum wage.

Here is how it works.  Let’s take a state with a minimum wage of $7.25 an hour and a tax credit adjusted wage of $2.13.  A server who works 40 hours a week can be paid $85.20 in wages if they make $204.80 in tips.  If they make less than that, the employer must make up the difference.  Employers are responsible for making sure their employees document these tips to avoid “make up” pay.  In this scenario the server brings home $290 a week.

Emmer claims that instituting a tip credit does not lower server wages.  Using the numbers listed above, a server making $7.25 an hour without the tip credit for 40 hours would still make $290 in wages.  The $204.80 in tips would be additional income bringing their total income for the week to $494.80.  That is a sizable difference.  Emmer can claim to be technically right since he always uses the word “wage.”  With a tip credit tips are included as part of the wage.  The wage in each of the above scenarios remains consistent at $7.25 even though they income varies significantly.  He also started citing a ridiculous study on his website which was fully refuted in a previous post.

Emmer claimed next that overall income would not decline because restaurants would lower prices and people would tip more.  Any server who has worked with coupons knows this is not the case.  Guests in general tip a percent of the total bill.  When menu prices fall and all other things remain equal the percent remains equal and the tip declines.  It also completely contradicts the reason he first introduced the topic at the now infamous Eagle Street Grille townhall.  At that meeting he stated that the reason a tip credit was needed was to increase the profitability of restaurant owners.  If menu prices drop due to a tip credit, then no increase in profitability is achieved.

If a restaurant owner decided to forego the increase in profits and lower menu prices, what would the effects be?  I will use the numbers most favorable to his point.  A server who waits on only 8 guests an hour making the minimum wage of $ 6.15 would receive a tip credit adjusted wage of $2.13.  This frees up $4.02 an hour for each server the owner has working.  It seems considerable until you realize that the $4.02 must be spread between 8 guests.  This means that between the beverage, appetizer, entrée, and dessert an owner can lower prices by $0.50 total.  This is if they also choose to take no profit.  Not quite a stimulus package to Minnesota diners and devastating to server incomes.

Emmer contended next that the minimum wage is the reason owners do not pay more than the minimum wage.  I think he is confusing the word minimum with the word maximum.  Nothing prohibits them from paying servers more in the current system.  His logic is that if they could pay some people less, they would pay some people more.  As someone who has worked in tip credit states for most of my career, I can tell you this is not how it plays out.  Furthermore if an owner decided to pay his head trainer or top server an extra dollar or two an hour, it would still be lower than the minimum wage they are receiving now.

This final point took me quite a while to research.  Hours of scrolling through records from the legislature allow me to address it with some certainty.  Emmer claimed at the recent townhall that he actually voted for a high wage of “$9.25 or $9.75” an hour on the same day he introduced an amendment to repeal the minimum wage which he called “socialism.”  Emmer must have slept through his political science classes because a minimum wage of $6.15 in no way fits the definition of socialism.  Beyond that is where the real story lies and where Emmer is caught red handed playing political games to mislead the voters.

On May 2, 2005, the Minnesota Legislature was finishing debate on the minimum wage increase that would pass later on that day.  In a last second effort to defeat the bill it’s opponents offered many amendments. One amendment was proposed by Rep. Bob Gunther (R) of Fairmont.  It would raise the server minimum wage, but to a lower level than the normal minimum wage.  This amendment was supported by 39 Republicans (including Emmer), who would later vote against the minimum wage increase.  Another amendment was brought up by Rep Marty Siefert (R) of Marshall and would increase the minimum wage to $9.73 and change the wording of the law from “minimum wage” to “livable wage .“ This amendment was supported by 47 Republicans (including Emmer) 40 of which (including Emmer) would vote against the eventual bill.

So how can Tom Emmer propose an amendment to end the minimum wage, vote increase it less for servers, vote to increase it significantly, and then vote to not increase it at all in the same day?   It’s called politics.  Emmer knew he couldn’t really end the minimum wage so he withdrew his amendment.  He knew he couldn’t stop the increase, so he tried to make it less for servers.  He knew it was going to increase, so he tried to increase it to the highest levels in the country hoping to kill the bill.  In the end of the day he voted not to increase it at all which is what he wanted all along.  So when Tom Emmer says “Did anyone tell you I voted the same day to increase the minimum wage to $9.25 or $9,75?” He is again trying to mislead the voters.  If that amendment passed, he still would have voted against the bill.

This will probably be my last Tom Emmer post.  The Research Director for his campaign has declared that the tip credit idea is off the table.  From his Twitter account he declared “No more tip credit after today. We won’t win the issue.”  I am going to call this one a victory for servers everywhere.  This is further proof that when servers are faced with a challenge we have all the tools at our disposal to win.  When a state tries this, we will spread the word.  If your state is next, I know a few hundred people in Minnesota who will join in your battle.  This is a proud day for servers everywhere.

I can’t really wrap this up without mentioning all the great work done by a group of Minnesotans.  Nelson, Connor, Missi and all the great folks over at MN Service Industry Workers Against Tom Emmer for Governor. Kudos to them for some of the best grassroots organizing I have ever seen.

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4 Responses to Refuting Emmer’s Myths

  1. yellowcat July 17, 2010 at 3:30 pm #

    The guy is clearly an idiot. Every server knows management’s mantra of upsell and how increased ticket prices mean more tips.

    All of his political mumbo jumbo is hurting servers now. The more it’s in the news, the more greedy servers seem. ‘Why should they make that much money? They are making more than I am! I’m not tipping them!’ will be the mindset of many diners until this issue is resolved. Meanwhile, he’ll still rake in his 6 figure income and sleep well at night.

  2. Danielle Bethke July 18, 2010 at 10:50 pm #

    Love your blog! I am a server in the Minneapolis area, who attended the Tom Emmer fiasco at Ol’ Mexico last Wednesday.
    It was my first attendance at any type of political anything, and how unsatisfying it was! Nothing but back pedaling, and denying. And his moderator couldn’t have been more annoying, what with her continual plugs for the restaurant’s happy hour at inappropriate moments. The room was filled 2/3rds with Emmer supporters and media, and maybe 1/3rd with servers. Still, it felt good to be there!
    It ended abruptly a full half hour before it was scheduled to end, I’m sure mostly due to the guy who dumped pennies on Emmer’s table. Which was really too bad, considering his stunt was not really related to the minimum wage/server issue anyway.
    Keep up the good work, and thanks for supporting your brothers and sisters up here in MN!

    • tipsfortips July 19, 2010 at 9:57 am #

      The whole thing was more for headlines than for substance. He met with servers to have a headline that said “Emmer meets with Servers.” He had already dropped the tip credit idea and was never serious about the tax exemption. It was a publicity stunt pure and simple. Now he is going to run from the issue. The real challenge is going to be how to keep all of the servers fired up to vote until election day.

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