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Minnesota Restaurant Passes Minimum Wage Increase To Workers, Customers

By aaroncynic in News on Aug 8, 2014 7:40PM


Critics of minimum wage increases across the nation often say that any hike workers' earnings would cost employers millions and, if we want to keep our cheeseburgers cheap, we need to keep wages barely above the federal poverty line. In Minnesota, one cafe owner is passing the supposed huge financial burden of a minimum wage increase directly onto consumers.

After Minnesota boosted its minimum wage from $7.25 and hour to $8 an hour went into effect Aug. 1— the state's first wage increase in a decade—the Oasis Cafe in Stillwater began tacking on an extra 35-cent "minimum wage fee" to checks to offset the cost of paying its servers a higher wage. Owner Craig Beemer told the Minneapolis Star Tribune the 75-cent an hour wage hike for his half a dozen servers would cost him up to $10,000 a year.

The charge created a firestorm of Facebook comments, with some people calling for boycotts of the restaurant. Manager Colin Orcutt said the response was “shocking” and that the Oasis was just trying to “protect its employees” with the fee. He also said the restaurant considered letting its servers go and running the cafe as a more traditional fast food counter. “If you raise prices and don’t tell anyone, that seems more backhanded to me,” said Orcutt.

Meanwhile, the Blue Plate Co, a chain of eight restaurants in Minnesota, is passing some of the cost of the minimum wage bump directly to its employees. When customers pay with credit cards, Blue Plate intends to pass the fees onto its servers, which will hit their tips by about 2 percent. One employee said that’s a big chunk of money for people living paycheck to paycheck, anonymously telling the Star Tribune “It’s their choice to accept credit cards, and the customers’ choice to pay with them, it’s not up to me.”

While fighting increasing wages for workers with fees might seem like a dream battle for a libertarian who’s Taxed Enough Already, both Beemer and the Blue Plate Company might want to pay heed to some success stories of other restaurants that pay better wages. The east coast based Boloco Burrito chain pays its employees an average of $11.50 an hour, while the Michigan based Moo Cluck Moo pays its workers $15. Boloco has about two dozen locations, while Moo Cluck Moo recently opened a second and is planning on a third in October, with further expansion next year.

Brian Parker, co-founder of Moo Cluck Moo told Crain’s Detroit that while labor costs make up about 40 percent of business expenses to the tune of $18,000 a month, the company offsets that cost through negotiating cheaper rents, strategic staffing and increasing buying power. He also said a little less money in his own pocket is worth having a harder working and loyal staff:

“I’m taking less money personally. My question is, how much do we have to make? How big of a pile of money do CEOs have to sit on,” said Parker.