Rising wages will come at the peril of Twin Cities restaurants


Rising wages are very good for workers. Not so much for the keepers of the Twin Cities' restaurants. Fibonacci Blue

Reader Jamie Robinson responds to Muddy Pig closes suddenly:

If you are wondering about all the restaurant closures lately, consider this: What many people are unaware of is that the last minimum wage increase from $7.25 to $9.65/hr without a tip credit, a 33 percent increase, mandated that full-service restaurants pay only their highest earning employees (servers and bartenders earning well over $20/hr) even more.

This was all over the past three years during a cook shortage, in which natural market forces have pushed cooks’ wages over $15/hr. This put many restaurants on the verge of failure.

The last phase in of that increase was January 1st of this year. July 1st will start the Minneapolis phase-in for $15/hr without a tip credit, representing another 55 percent increase mandated to only the highest earning employees during a cook shortage.

St. Paul is sure to pass their own $15/hr minimum wage without a tip credit this summer. Full service restaurants will choke under these increases without a tip credit. Even very successful restaurants will struggle under these increases if we don’t get a tip credit soon. 


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