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No Room for Compromise on Lower Tipped Minimum

Betsy Hodges asserts that a tip credit would harm women workers

Mayor Hodges makes her case against counting tips.
Eater file photo

Yesterday Minneapolis Mayor Betsy Hodges addressed the hot button issue of minimum wage increase for her city in The Case Against a Tip Penalty. Minneapolis city officials are pushing for an across-the-board minimum wage increase to $15 an hour, up from the current $9.50 per hour, while restaurant owners have fought to have their concerns heard about the damage this could do to already thin profit margins.

Restaurant owners have argued that a tip credit/penalty would allow for income earned as a tipped employee, that would put the workers average hourly rate well above the proposed minimum wage. Currently, Minnesota is one of seven states that does not permit businesses to pay a lower minimum wage to tipped workers.

Mayor Hodges’ plea implies that anything other than an across-the-board increase would not only be an affront to hourly workers but “... it will leave tipped workers falling behind and subject to sexual harassment.” She also argues that any so-called compromise between her stance and business owners is “unworkable.”

She goes on to equate tipping to a holdover from forced servitude, seemingly implying that servers earning less hourly are mostly women trapped in employ. Hodges writes, “It is not widely known that tipping as an institution is rooted in the history of slavery. The notion of tipping is not native to America, but was imported from Europe just as slaves were emancipated.”

The restaurant owners whom have spoken with Eater Twin Cities to are concerned about public backlash, but more importantly their employees.

Not allowing a lower tipped minimum could further exacerbate the income disparity between front of the house employees (like waiters) and back of the house employees (like cooks), who typically can't legally partake of tip pools.

As the minimum wage rises higher and higher in states like Oregon and California, which also don't allow for a lower wage for servers, an increasing number of restaurants have raised prices and eliminated tipping altogether as a way deal with the income disparity. Several local restaurants experimented with that policy, but most did away with the practice in the face of diner confusion and an ingrained tipping culture.

Read the entirety of Mayor Hodges letter here.

Affected or concerned by this policy change? Respond in the comments or email mpls@eater.com with thoughts. Eater will update this story as the debate develops

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