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Foodservice veterans to discuss minimum wage and tip credit

With a new mayor and new city council leadership, St. Paul’s hospitality industry is poised for a year of change. Mayor Melvin Carter III and the St. Paul City Council are already immersed in the push to raise the minimum wage to $15 per hour. New Council President Amy Brendmoen, Ward Four Council Member Russ Stark and new Citizens League Executive Director Pahoua Yang Hoffman met with more than 100 servers, bartenders and other hospitality industry representatives at Sweeney’s Saloon to discuss the tip credit issue.

Hoffman is in the midst of several weeks of scoping studies on the minimum wage issue. She has met with several groups and hoped to have a report ready for the mayor and city council by late January. The study is funded by the St. Paul Foundation, which will also review the findings. Having outside funding and an outside group do the study will maintain its independence, she said.

The scoping process is meant to define key questions, said Hoffman. She is also pouring through several minimum wage studies and reports, and is identifying stakeholders who would be part of a larger study process. The task force could form later this year to start studying the issue.

“This topic is complex,” said Hoffman. “It affects people differently, in different employment sectors.”

The January 8 discussion focused on the tip credit. Proponents of raising the minimum wage contend that more than the increase is needed, to reduce disparities. But those who want to institute a tip credit contend that not having such a credit in place could hurt the very workers it is meant to help in the hospitality industry.

Minneapolis tipped workers and restaurant owners affected by the lack of a tip credit in that city’s minimum wage ordinance have been urging St. Paul workers to get organized now. 

Workers in the front of the house can earn more than $30-plus per hour with tips. Those servers and bartenders could take a hit if a tip credit isn’t in place. Many people who spoke January 8 said the raise to $15 should go to the cooks, prep staff and dishwashers in the back of the house. 

Several speakers at the event said they don’t need a raise, and have made a good living with tips. A few people said they worried about unintended consequences that would hurt restaurants and their ability to make a good living.

Brendmoen urged those present to make themselves heard at future meetings and hearings. “I’m particularly interested in the tip credit issue,” she said. Brendmoen worked her way through college as a waitress and bartender. Her first job in St. Paul was tending bar at Billy’s on Grand.

Matt Gray has been a server at Cathedral Hill’s W.A. Frost restaurant for more than a decade. “Tips are a major source of income for me and many others,” he said. In his case, tips have made up more than 70 percent of his annual income. 

If no tip credit is included in a wage mandate, Gray and others said restaurant owners would have to make difficult choices. “There are many unintended consequences … business models could change,” he said. Some places have eliminated tipping and instead rolled in mandatory service charges. Other places have gone to automatic ordering, on iPads.

To loud applause, Gray said, “With a tip credit, it guarantees that everyone makes at least $15 per hour.”

Jeff Crandall, a bartender at Eagle Street Grille, said “This is what I do. For people not in the industry, to see all of these people who are saying we don’t want a raise, that has to be pretty striking.”

“I don’t need any more money,” said Dark Horse bartender Adam Johnson. “Those in the back of the house need it more.”

Dan Montpetit is from a veteran St. Paul restaurant family. He and his brothers are co-owners of Gabe’s by the Park, purchasing it from Tim Weiss in 2017. They have many longtime Gabe’s employees still working for them and have already had to drop a host spot. “I don’t want to have to make any more cuts,” Montpetit said. “I don’t want to cut people because I cannot afford to pay them. I also don’t want to raise prices for food and drinks.”

Only one person, Eli Edleston-Stein, spoke against the tip credit. He is a tipped worker and said that a tip credit could also have unintended consequences over time. Several people argued with him, especially when he tried to tie the issue of tips to that of sexual harassment in the workplace.

No set strategy has been outlined to bring forward the tip credit issue in St. Paul. If the city does appoint a task force to study minimum wage, council members said the hospitality industry would have a place at the table. 

At this point, Mayor Carter has leaned against a tip credit. City council members said they’re waiting to see what comes out of the Citizens League process.

During his years in the Ward One City Council seat, Carter had an up-and-down relationship with the hospitality industry. In 2009 he brought forward a city ordinance that would have required restaurants to reveal every ingredient in every dish. Many restaurant owners strenuously strongly objected to the idea of revealing secret recipes.

Carter, who has a child with a severe food allergy, wound up scaling back his proposal. Restaurants are required to display information about allergy awareness. 

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