Missoula Restaurateurs Testify in Support of Cutting Minimum Wage

January 28, 2009 in 2009 Legislative Session

by jhwygirl

Today was the Senate Business, Labor & Economic Affairs committee hearing for SB254, and SB253, which would allow an employer tip credit against the minimum wage, both proposed by Sen. Donald J Steinbeisser.

SB254 would eliminate increases to minimum wage based on the cost of living index (normally around 2.5 to 3 percent per year), freezing it at the current $6.90 per hour. SB253 would allow employers a tip exemption for the hourly wage, allowing them to deduct tips from the hourly wage to an amount of the current $6.90 per hour.

Tipped employees wages would freeze at $6.90 an hour providing their tips made up any increases in minimum wage.

Adding further mess to Steinbeisser’s two proposed bills, in SB253, the minimum wage would be indexed to inflation. It just “sticks it” to tipped wage earners.

Montana is one of the few states that does not allow a tip credit – but I’ll also point out that Montana ranks at the bottom of the list of state’s in terms of median income.

Montana’s minimum wage was increased by inflation because of overwhelming support for Initiative 151. That initiative passed with a vote of 285,535 to 107,294. Sen. Donald J Steinbeisser wants to reverse that.

How’s them’s bananas?

SB254 was blogged about here. Please note that there was no executive action (i.e., vote) taken today, and it is not too late to contact the committee members, letting them know how you would like them to vote. Contact information is in that post.

But who was there to testify in favor of the tip credit SB253? Restaurant lobbyists and owners were apparently there in force: Brad Griffin of the Montana Restaurant Association; Blu Funk of Restaurant Showtime in Big Fork and Chairman of the Montana Restaurant Associaton; Jon Bennion of the Montana Chamber of Commerce; Hu Hot’s owner Linda Vap from Missoula, who owns 3 Hu Hot’s; Casey Ryan, owner of Famous Dave’s and Applebee’s in both Missoula and Bozeman; Rob Smith, of Outback Steakhouse’s; Bob Miller of the Bearclaw Bar & Grill in Mcallister. In general, restaurant owners testified that they can not meet these increases in wages – that tipped employees were taking home more in tips than their managers make, in amounts of more than $1,300 a month in the rural towns in central Montana, at places like Eddie’s Corner, a truck stop.

Opponent Keith Kelly, Commissioner of the Montana Department of Labor & Industry testified that this bill would apply to a huge swath of positions – not just waiters and waitresses – people like taxi drivers, hotel staff, and barbers and beauticians. He noted that while the committee had heard from restaurateurs that faced rising costs, but he questioned by the increase in costs to the employee weren’t being focused on – that the employees faced increase costs in gas and groceries and every day costs. That it is these people, in the lowest wage scales, that spend their money in the market – so cutting wages is contradictory to trying to help the economy. “It spirals the economy down quicker,” he said. Kelly questioned why people who leave tips should be leaving tips to help an employer meet minimum wage. Isn’t that the obligation of the employer? Kelly noted that few people make 20% tips, from surveys that they have conducted.

{{applause for Keith Kelly, please}}

Testimony for SB254 went essentially the same way with the same people.

All in all, I have to say, I don’t buy it. Cutting wages and holding back on wage increases simply is the wrong way to go in this economy. Virtually all economists agree with that. In congress, right now, they are working very hard – people like Senators Baucus and Tester – to get money back into the hands of regular people on Main Street.

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