By Olivia Grady

On June 30, 2017, the Minneapolis City Council approved a $15 per hour minimum wage for the city with five to seven years for businesses to comply. The minimum wage applies to most workers, including those who earn tips.

Restaurant workers who earn tips and restaurant owners fought this rule. A restaurant industry group actually found that the average hourly pay for servers at 72 restaurants was $28.56. The association published the study to try to exempt workers who earn tips.

The plan was for a tip credit. Under the tip credit plan, an employee would only cover the difference between the state minimum wage of $9.50 per hour and $15 per hour if the tips did not cover this difference.

Sarah Norton, a Minneapolis server for six years and the organizer of the Service Industry Staff for Change, said:

"This survey proves what we as servers already know. Tipped restaurant employees in Minneapolis are making well above $15 an hour on average. City leaders should focus on giving a raise to the cooks and support employees while preserving the jobs and pay structure for tipped employees."

The concern was that this law would reduce wages for servers and raise costs for restaurant owners if there wasn’t a tip credit.

Ms. Norton also said:

“I’ve clawed, bit, spit and kicked my way to where I am right now. And I’ll be damned if I let this black and white, one-size-fits-all approach slaughter this business that I love.” 

Minneapolis Mayor Betsy Hodges however disagreed. She cited Bureau of Labor Statistics data that found that tipped workers do not make $15 per hour. Also, female workers might be sexually harassed more frequently if they rely on tips.

Mayor Hodges was not alone in her support. The Service Employees International Union (SEIU) also supported a higher minimum wage without a tip credit and organized listening sessions.

Javier Morillo, the head of the SEIU Local 34 suggested boycotting some restaurants on Facebook:

“If you eat out in Minneapolis and one of the places you patronize belongs to the pathwayto15.org group, please consider withholding your patronage until that restaurant leaves the group — or at the very least let your displeasure with their position known to management.” 

Other opponents argued that the state does not have a tip credit, so the city should not either.

Surprisingly, Seattle had a tip credit so the effects on Minneapolis workers will be probably be even worse.