Minimum Wage Public Comment

From: Martha Hage To: MinWage Subject: Oppose $15 Date: Wednesday, June 21, 2017 11:57:39 PM

To whom it may concern:

A reasonable minimum wage is $12.

The only locations in the United States of America that have a minimum wage of $15 are the East Coast and the West Coast. The cost of living is significantly higher in those areas. The cost of living would increase in Minneapolis and force people out of our city. Businesses would move out of Minneapolis or close.

As stated above, a reasonable minimum wage for Minneapolis is $12.

Sincerely,

Martha M. Hage [email protected] 612.339.4959

Sent from my iPad

From: Dahler, Ken on behalf of Council Comment To: MinWage Subject: FW: Minimum Wage To the city council attached document Date: Thursday, June 22, 2017 7:26:10 PM Attachments: To the City Council.docx

Ken Dahler l Council Committee Coordinator l City of Minneapolis – Clerk’s Office l 350 S. Fifth St. – Room 304 612-673-2607 l [email protected]

From: [email protected] [mailto:[email protected]] Sent: Wednesday, June 21, 2017 9:13 PM To: Council Comment Subject: Minimum Wage To the city council attached document

Margaret Hastings, MA, LPCC,CEAP,SAP

This is confidential information. If received in error, delete and call Margaret Hastings at ph. 952-457-2288

From: JJ Haywood To: Quincy, John Subject: Minneapolis Minimum Wage Date: Monday, June 19, 2017 8:29:03 PM

Dear Council Member Quincy:

I'm writing you requesting that the Council reconsider the phase in to the $15/hr minimum wage ordinance. There is NO data (because no City has reached $15/hr yet) to support the claims that a $15/hr wage with no acknowledgement of tips is easy and won't result in job losses, business closures and the like. If the Minneapolis $15/hr minimum wage ordinance passes without acknowledging tips as income for restaurant servers/bartenders/delivery drivers, our Minneapolis restaurants will change for the worse. The vibrancy we are seeing with beer halls, neighborhood restaurants, coffee shops, bars, nationally recognized fine dining locations and the like will slow dramatically as full service and delivery restaurants grapple with dramatic wage increases for tipped employees currently paid minimum wage. Its important to note that in a full service restaurant, minimum wage tipped employees make up about 1/2 of the hours worked at the restaurant and with their tips earn among the highest wages in the restaurant - at Pizza Luce in Minneapolis our servers, bartenders and delivery drivers W-2 earnings in 2016 were between $22-30 per hour including the tips they claimed.

Looking at the Ordinance as currently proposed with 2 increases in 2018 for "large businesses" we are forecasting picking up an additional $186,000 of wages in 2018 just to for directly tipped servers, bartenders and delivery drivers. This doesn't include the increases we will give to our other employees to keep pace with inflation and remain competitive in a very tight labor market. We will add a similarly large wage cost in 2019 and 2020 and 2021 as the wages continue to go up. Absorbing these costs without making serious changes to our business is impossible we are not alone in this - all restaurants in Minneapolis will need to look closely at what they do to remain in business. It has been infuriating to be shut out of the discussion on the minimum wage, the absolute refusal by the City Council and the Mayor to consider our position has been astonishing. It's as if small businesses don't matter and as if restaurants aren't part of what makes our city vibrant. As you prepare for the Council meeting next week I ask you to consider the following:

1. It is a myth that a table service and delivery restaurants can simply raise prices to cover the cost of bringing tipped employee wages to $15/hr. This is a $5.50 change (nearly 60% increase) in about 1/2 of the workers in a full service restaurant. The half that already earns well over $20/hr including tips. Demand for restaurant food is elastic, we cannot charge what what ever we want for our food and expect to stay in business. Many guests will not pay $30+ for a pizza, $16+ for a burger and $7+ for a local beer that would be required to "cover" this wage increase. 2. This increase will result in tipped (currently earning $20-35/hr) restaurant job losses as businesses manage increased labor costs by introducing tools like iPad ordering and/or making changes to their service model by abandoning labor intensive table service in favor of counter service. 3. At some point during the march to $15/hr, tips will be replaced by service fees on guest checks to help fund the base wage increases. These service fees will be retained by the business and used to fund employee costs. The adoption of these types of fees coupled with higher guest checks will start to kill the guest's appetite for leaving a gratuity eroding directly tipped full service restaurant employees' take home pay from $24-35 per hour to the actual minimum wage. This is why the Service Industry for Change is so concerned about this issue.

I hope you will consider increasing business size--lots of local independent restaurants have a large number of employees as we employ lots of part-time workers we for example have 100 employees at our Downtown Minneapolis location. I hope you will look to save table service in Minneapolis by doing something different with tipped employees - either by acknowledging tips as income or stretching out the implementation schedule for these workers and finally I hope you look to preserve access to jobs for our youth by implementing a true youth wage not this 90 day training wage.

Thank you. JJ

-- JJ Haywood CEO Pizza Luce 612.554.1955 From: Brock, Lisa A on behalf of Reich, Kevin A. To: Rivera-Vandermyde, Nuria Subject: FW: Minneapolis Minimum Wage Date: Wednesday, June 21, 2017 4:16:16 PM

Lisa Brock Council Associate Minneapolis City Council – First Ward 612-673-2201 [email protected]

Subscribe to Ward 1 E-Mail Updates HERE

From: JJ Haywood [mailto:[email protected]] Sent: Monday, June 19, 2017 8:23 PM To: Reich, Kevin A. Subject: Minneapolis Minimum Wage

Dear Council Member Reich:

Thank you. JJ

-- JJ Haywood CEO Pizza Luce 612.554.1955 From: M Hess To: Quincy, John Subject: minimum wage Date: Sunday, June 18, 2017 9:22:02 PM

Dear Cm Quincy:

I am writing to register my concern about the proposed Minneapolis minimum wage increase which at this point seems like an inevitability.

It seems based on Elizabeth Gliddens quote in the Star Tribune like you on the City Council have already accepted it's Ok to see business owners have their livelihoods severely damaged, or highly paid workers see their incomes drop due to abolition of tips. I have seen nothing about how a small business owner in North Minneapolis is supposed to make a go of it in a neighborhood where they can't raise prices like they can and likely will by my house to account for this big increase compared to neighboring municipalities. I have seen nothing about the domino impact on businesses to increase compensation for workers already above minimum wage. If I have worked up to $15 and that's 50% higher than minimum wage does that mean I deserve $22.50 when the minimum is at $15? What's the impact especially on small businesses for this piling on? The reason there are so many discussions about tip credit , training wage, small business phase in, etc... is that you are so far out of step of everyone around us. If for example Mpls said the minimum wage was MN wage plus $2 there probably wouldn't be need for so many special considerations. The idea the city will evaluate each year how it's going is a joke. Statistics will ensure the impact is neutral to positive. It feels from the start this has been a bit of political theater to implement coastal level wages here in the Midwest. Minneapolis benefits greatly from small neighborhood shops and restaurants and what you are doing is just making it more difficult for this to continue. I really don't want to drive to the suburbs for a nice neighborhood place to eat. Mike Hess Lynhurst From: Lopez Lara, Sara To: MinWage Subject: FW: FEEDBACK FORM FW: minimum wage Date: Thursday, June 22, 2017 2:40:58 PM

Sara Lopez Ward 8 Council Office – Senior Policy Aide Office of Council Vice President Elizabeth Glidden 612-673-2208 [email protected]

From: Glidden, Elizabeth A. Sent: Thursday, June 22, 2017 2:32 PM To: MinWage; Lopez Lara, Sara Subject: FEEDBACK FORM FW: minimum wage

From: M Hess [mailto:[email protected]] Sent: Sunday, June 18, 2017 9:04 PM To: Glidden, Elizabeth A. Subject: minimum wage

Cm Glidden - I remain as a Mpls resident very concerned about the negative impacts of Mpls becoming an island of highly inflated Minimum wage. Your quote in the Star Tribune "“I feel grounded in reality in the sense that I believe what we’re hearing is that, yes, there will be impacts," did nothing to assuage my concern that you are really listening to the business owners and workers who are likely to be hurt by this increase. It seems like you have already accepted it's Ok to see business owners have their livelhoods severely damaged, or highly paid workers see their incomes drop due to abolition of tips.

I have seen nothing about how a small business owner in North Minneapolis is supposed to make a go of it in a neighborhood where they can't raise prices like they can and likely will by my house to account for this big increase compared to neighboring municipalities.

I have seen nothing about the domino impact on businesses to increase compensation for workers already above minimum wage. If I have worked up to $15 and that's 50% higher than minimum wage does that mean I deserve $22.50 when the minimum is at $15? What's the impact especially on small businesses for this piling on?

The reason there are so many discussions about tip credit , training wage, small business phase in, etc... is that you are so far out of step of everyone around us. If for example Mpls said the minimum wage was MN wage plus $2 there probably wouldn't be need for so many special considerations.

The idea the city will evaluate each year how it's going is a joke. Statistics will ensure the impact is neutral to positive.

It feels from the start this has been a bit of political theater to implement coastl level wages here in the Midwest. Minneapolis benefits greatly from small neighborhood shops and restaurants and what you are doing is just making it more difficult for this to continue. I really don't want to drive to the suburbs for a nice neighborhood place to eat.

Mike Hess Lynhurst

From: Brock, Lisa A on behalf of Reich, Kevin A. To: Rivera-Vandermyde, Nuria Subject: FW: minimum wage Date: Wednesday, June 21, 2017 4:17:10 PM

Lisa Brock Council Associate Minneapolis City Council – First Ward 612-673-2201 [email protected]

Subscribe to Ward 1 E-Mail Updates HERE

From: M Hess [mailto:[email protected]] Sent: Sunday, June 18, 2017 9:12 PM To: Reich, Kevin A. Subject: minimum wage

Dear Cm Reich:

I am writing to register my concern about the proposed Minneapolis minimum wage increase which at this point seems like an inevitability.

It feels from the start this has been a bit of political theater to implement coastal level wages here in the Midwest. Minneapolis benefits greatly from small neighborhood shops and restaurants and what you are doing is just making it more difficult for this to continue. I really don't want to drive to the suburbs for a nice neighborhood place to eat.

Mike Hess Lynhurst From: Cathy Heying To: MinWage Subject: $15 hour wage letter Date: Thursday, June 22, 2017 1:56:23 PM Attachments: 15hourletter.pdf

Please see the attached letter for consideration. Thanks. Cathy Heying

From: Dahler, Ken on behalf of Council Comment To: MinWage Subject: FW: Testimony re Minimum Wage Ordinance (17-00723) Date: Thursday, June 22, 2017 7:25:56 PM Attachments: NELP (Mpls 15 Bill)(June 2017).pdf

Ken Dahler l Council Committee Coordinator l City of Minneapolis – Clerk’s Office l 350 S. Fifth St. – Room 304 612-673-2607 l [email protected]

From: Laura Huizar [mailto:[email protected]] Sent: Thursday, June 22, 2017 7:24 AM To: Council Comment Subject: Testimony re Minimum Wage Ordinance (17-00723)

Hello:

Attached please find testimony that the National Employment Law Project would like to submit in support of the proposed Minimum Wage Ordinance under consideration at today’s Special Meeting of the Committee of the Whole. Please let me know if you need any additional information or have any questions. Thank you.

Best,

Laura Huizar Staff Attorney National Employment Law Project 2040 S Street NW, Lower Level Washington, DC 20009 Tel: 202-640-6521 Cell: 407-758-9824 Fax: 202-234-8584 [email protected] | www.nelp.org

This message is intended only for the use of the individual or entity to whom it is addressed, is confidential, and may contain information that is privileged and exempt from disclosure under applicable law. Unless you are the addressee, or are authorized to receive this message for the addressee, you are hereby notified that any dissemination, distribution, or copying of this message, its attachments or any information contained in the message or attachments, is strictly prohibited. If you are not the addressee, please advise the sender by reply e- mail at [email protected] and delete the message and any attachments.

Testimony of Laura Huizar TESTIMONY National Employment Law Project

Increasing the Minimum Wage in Minneapolis to $15 Per Hour

Testimony Concerning File No. 17-00723, Municipal Minimum Wage Ordinance

June 22, 2017

Laura Huizar Staff Attorney

National Employment Law Project 2040 S. Street, Lower Level Washington, D.C. 20009

(202) 640-6521 [email protected]

Across the country, our staff are recognized as policy experts in areas such as unemployment insurance, wage and hour enforcement, and, as is relevant for today’s hearing, the minimum wage. We have worked with dozens of city councils and state legislatures across the country and with the U.S. Congress on measures to boost pay for low-wage workers. NELP has worked with most of the cities in the United States that have adopted higher city minimum wages in recent years and is familiar with their economic experiences.

NELP testifies today in support of increasing Minneapolis’s minimum wage to $15 per hour, and we strongly urge the City Council to reject proposals to exclude tipped workers in the City from the full benefits of the proposed minimum wage increase. Minnesota is one of seven states that guarantee tipped workers what has come to be termed as One Fair Wage.1 Under a One Fair Wage system, tipped workers are entitled to the same minimum wage as all other workers without a reduction in the cash wage paid by the employer based on tips. Minnesota abolished a lower minimum wage for tipped workers in 1984 and has resisted all attempts to bring back a subminimum wage for tipped workers for over three decades.

Growing numbers of U.S. states and cities in just the last few years have adopted a minimum wage of $15 per hour. California and New York approved a statewide $15 minimum wage in 2016. SeaTac, Washington, which was the first city to do so, approved a $15 minimum wage in 2013. San Francisco Mayor Ed Lee brokered an agreement between labor and business to place a $15 minimum wage on the November 2014 ballot, which the voters overwhelmingly approved, and the Los Angeles city council approved a $15 minimum wage in 2015.

The most rigorous modern research on the impact of raising minimum wages shows that raises increase worker earnings with negligible adverse impact on employment levels. As more and more U.S. cities enact local minimum wages, the research has similarly shown that such local measures have no adverse effect on jobs, and implementation of higher local wages has proven manageable for employers. The benefits for low-wage workers and their families of higher wages have been very significant, raising wages in the face of broader economic trends that have led to stagnant and falling wages across the bottom of our economy, reducing economic hardship, lifting workers out of poverty, and improving other life outcomes.

Low paying industries are disproportionately fueling job growth today, with more and more adults spending their careers in these positions. Raising the wage floor, which has badly eroded over the decades even as corporate profits have skyrocketed, is urgently needed to ensure that local economies can rely on workers’ spending power to recover and that the growing numbers of workers relying on low wages to make ends meet can contribute fully to this recovery.

Ensuring that all workers, including tipped workers, are entitled to the same base minimum wage regardless of tips received is a crucial part of any minimum wage increase that seeks to make a significant difference for low-wage workers. The typical tipped worker in Minneapolis struggles on barely more than the minimum wage and faces significant economic insecurity. The complex subminimum wage system is difficult to enforce and results in widespread noncompliance. Workers who are forced to rely mainly on tips as income, rather than on a stable base cash wage paid directly by their employer, face wide fluctuations in paychecks as tips vary from season to season, shift to shift, and customer to customer. The experiences of cities that have already raised their minimum wage to $15 and require that tipped workers receive the full minimum wage directly from their employer show that eliminating the subminimum wage in Minneapolis will not lead to the widespread elimination of tipping or a significant reduction in tipping rates.

Effective enforcement of any local minimum wage law is also necessary to ensure that workers receive the wage increases they are entitled to under local law, and granting workers a private right of action through ordinance is a key way to advance effective enforcement. NELP strongly supports the inclusion of a private right of action in the bill under consideration today.

Finally, raising the minimum wage across the country, including in Minneapolis, would go a long way toward restoring the minimum wage to where it was at its peak, when unemployment rates were low, the minimum wage reflected much higher purchasing power, and the minimum wage was equal to half of what the median worker earned.

Who Would Benefit From A Higher Minimum Wage in Minneapolis?

As the bill under consideration today states, an increase in the Minneapolis minimum wage to $15 per hour would benefit 23 percent of workers in the City, or approximately 71,000 people.2 Workers in Minneapolis simply cannot make ends meet on the state’s minimum wage. The bill explains that a full-time worker earning the state’s minimum wage of $9.50 per hour still makes an annual salary that is about $5,000 below the poverty level for a family of four.3 Moreover, the Economic Policy Institute’s Family Budget Calculator estimates that a single worker with no children who works full-time needed $13.10 per hour in 2014 to make ends meet, and a single worker with one child working full-time needed about $26 per hour in 2014 to afford the basics.4 The cost of living in the City is “among the highest in the state.”5

The Growing List of Cities and States Enacting Minimum Wage Increases Reflects a Deepening Wage Crisis and Popular Support for Bold Change

The U.S. economy has seen steady growth and improvement in the unemployment rate in recent years, but wages have been flat or declining for much of the labor force. 6 Averaged across all occupations, real median hourly wages declined by 4 percent from 2009 to 2014, and lower- wage occupations experienced greater declines in their real wages than did higher-wage occupations.7 Moreover, job growth continues to be unbalanced, with especially pronounced job gains in lower-wage industries and slow growth in mid-wage industries. The worsening prospects and opportunities for low-wage workers have prompted a record number of cities, counties, and states to enact higher minimum wage rates for their residents.

Since November 2012, about 19 million workers throughout the country have earned wage increases through a combination of states and cities raising their minimum wage rates; executive orders by city, state and federal leaders; and individual companies raising their pay scales.8 Of those workers, nearly 10 million will receive gradual raises to $15 per hour.9 More than forty cities and counties and more than forty states have raised their minimum wage since 2012.10

As the Fight for $15 movement gathers strength, advocates in a rapidly growing list of localities and states are calling for a $15 minimum wage. Los Angeles, San Francisco, Seattle, SeaTac, Washington, and Emeryville, California, have already enacted a $15 minimum wage for all workers.11 New York and California approved a statewide $15 minimum wage in 2016.12 More states are also now considering legislative proposals and/or ballot initiatives that would raise the statewide minimum wage to $15, including New Jersey, Maryland, Nevada, and Massachusetts.13

Polling data shows that approximately two out of three individuals support a $15 minimum wage, and support among low-wage workers is even higher.14 A poll of low-wage workers commissioned by NELP found that approximately 75 percent of low-wage workers support a $15

2 minimum wage and a union.15 It also found that 69 percent of unregistered respondents would register to vote if there were a presidential candidate who supported raising the minimum wage to $15 and making it easier for workers to join a union, and 65 percent of registered voters reported that they are more likely to vote if a candidate supports $15 and a union for all workers.16 In Minneapolis, as part of a campaign in 2016 to amend the City’s charter in order to adopt a citywide $15 minimum wage, advocates gathered over 8,000 valid signatures in support of the initiative, which significantly exceeded the required minimum,17 and a poll conducted by Patinkin Research Strategies found that 68 percent of likely voters in Minneapolis would have voted yes to approve adding a $15 minimum wage in the City’s charter.18

The trend in localities and states pushing for higher minimum wage rates will likely continue to intensify as wages continue to decline, inequality remains at historically high levels, and the federal government fails to take bold action to ensure that hard-working individuals can make ends meet.

Higher Wages from Minimum Wage Increases Have Very Significant Beneficial Effects for Low-Income Individuals and Households

The higher incomes that result from minimum wage increases have very direct and tangible impacts on the lives of the workers affected and their families. Significant increases in minimum wages have proven an effective strategy for addressing declining wages and opportunity for low- wage workers by raising pay broadly across the bottom of the city economy. For example, over the decade that San Francisco’s strong minimum wage has been in effect, it has raised pay by more than $1.2 billion for more than 55,000 workers, and it has permanently raised citywide pay rates for the bottom 10 percent of the labor force.19 The widely recognized success of San Francisco’s minimum wage led Mayor Ed Lee to broker an agreement with business and labor to place an increase to $15 on the November 2014 ballot, which the voters overwhelmingly approved.

The higher pay resulting from minimum wage increases translates to a range of other important improvements in the lives of struggling low-paid workers and their households. For workers with the very lowest incomes, studies show that minimum wage increases lift workers and their families out of poverty.20 Similarly, higher incomes for low-wage workers and their households translate to improved educational attainment and health. For example, a study by the National Institutes of Health determined that “[a]n additional $4000 per year for the poorest households increases educational attainment by one year at age 21.”21 Another study found that raising California’s minimum wage to $13 per hour by 2017 “would significantly benefit health and well-being.”22 It stated that “Californians would experience fewer chronic diseases and disabilities; less hunger, smoking and obesity; and lower rates of depression and bipolar illness.”23 Moreover, “[i]n the long run, raising the minimum wage would prevent the premature deaths of hundreds of lower-income Californians each year.”24 Yet another study found that high dropout rates among low-income children can be linked to parents’ low-wage jobs and that youth in low-income families have a greater likelihood of experiencing health problems.25

The Most Rigorous Research Shows That Higher Minimum Wages Raise Worker Incomes without Reducing Employment

The most rigorous research over the past 20 years—examining scores of state and local minimum wage increases across the U.S.—demonstrates that these increases have raised workers’ incomes without reducing employment. This substantial weight of scholarly evidence reflects a

3 significant shift in the views of the economics profession, away from a former view that higher minimum wages cost jobs. As Bloomberg News summarized in 2012:

[A] wave of new economic research is disproving those arguments about job losses and youth employment. Previous studies tended not to control for regional economic trends that were already affecting employment levels, such as a manufacturing-dependent state that was shedding jobs. The new research looks at micro-level employment patterns for a more accurate employment picture. The studies find minimum-wage increases even provide an economic boost, albeit a small one, as strapped workers immediately spend their raises.26

The most sophisticated of the new wave of minimum wage studies, “Minimum Wage Effects Across State Borders,” was published in 2010 by economists at the Universities of California, Massachusetts, and North Carolina in the prestigious Review of Economics and Statistics.27 That study carefully analyzed minimum wage impacts across state borders by comparing employment patterns in more than 250 pairs of neighboring counties in the U.S. that had different minimum wage rates between 1990 and 2006. The study’s innovative approach of comparing neighboring counties on either side of a state line is generally recognized as especially effective at isolating the true impact of minimum wage differences, since neighboring counties otherwise tend to have very similar economic conditions, and the study has been lauded as state-of-the-art by the nation’s top labor economists, such as Harvard’s Lawrence Katz, MIT’s David Autor, and MIT’s Michael Greenstone. (By contrast, studies often cited by the opponents of raising the minimum wage that compare one state to another—and especially those comparing states in different regions of the U.S.—cannot as effectively isolate the impact of the minimum wage, because different states face different economic conditions, of which varying minimum wage rates is but one.)

Consistent with a long line of similar research, the Dube, Lester, and Reich study found no difference in job growth rates in the data from the 250 pairs of neighboring counties—such as Washington State’s Spokane County compared with Idaho’s Kootenai County where the minimum wage was substantially lower—and found no evidence that higher minimum wages harmed states’ competitiveness by pushing businesses across the state line.28

However, it is not simply individual state-of-the-art studies, but the whole body of the most rigorous modern research on the minimum wage that now indicates that higher minimum wages have had little impact on employment levels. This is most clearly demonstrated by several recent “meta-studies” surveying research in the field. For example, a meta-study of 64 studies of the impact of minimum wage increases published in the British Journal of Industrial Relations in 2009 shows that the bulk of the studies find close to no impact on employment.29 This is vividly illustrated by a graph from the meta-study showing the results clustered around zero:

Another recent meta-study by Paul Wolfson and Dale Belman of the minimum wage literature demonstrates similar results.30

Further underscoring how minimum wage increases are simply not a major factor affecting job growth, economists at the Center for Economic & Policy Research and Goldman Sachs have noted that the U.S. states that have raised their minimum wages above the minimal federal level are enjoying stronger job growth than those that have not.31

The Evidence from Cities That Have Adopted Significantly Higher Local Minimum Wages Similarly Shows That They Have Not Cost Jobs and That Implementation Has Proven Manageable for Employers

The experiences of cities with higher local minimum wages—and the most rigorous economic research on the impact of city wage laws—have shown that they have raised wages broadly without slowing job growth or hurting local employers.

The two U.S. cities that have had higher local minimum wages for the longest period are San Francisco, California, and Santa Fe, New Mexico. Both adopted significantly higher local minimum wages in 2003 and the impact of the minimum wages has been the subject of sophisticated economic impact studies. In San Francisco, a 2007 study by University of California researchers gathered employment and hours data from restaurants in San Francisco as well as from surrounding counties that were not covered by the higher minimum wage and found that the higher wage had not led San Francisco employers to reduce either their employment levels or employee hours worked. 32 A follow-up 2014 study examined the combined impact on San Francisco employers of the city’s minimum wage ordinance and of other city compensation mandates that cumulatively raised employment costs 80 percent above the level of the federal minimum wage. The study again found no adverse effect on employment levels or hours, and found that food service jobs—the sector most heavily affected—actually grew about 17 percent faster in San Francisco than in surrounding counties during that period.33

In Santa Fe, a similar 2006 study conducted after the city raised its minimum wage 65 percent above the state rate compared job growth in Santa Fe with that in Albuquerque (which at that time did not have a higher city minimum wage). It determined that “[o]verall, . . . the living wage had no discernible impact on employment per firm, and that Santa Fe actually did better than Albuquerque in terms of employment changes.”34

A sophisticated 2011 study of higher minimum wages in San Francisco, Santa Fe, and Washington, D.C., compared employment impacts to control groups in surrounding suburbs and cities. It similarly found that “[t]he results for fast food, food services, retail, and low-wage establishments . . . support the view that citywide minimum wages can raise the earnings of low- wage workers, without a discernible impact on their employment . . . .”35

And most recently, a study released earlier this week and conducted by the University of California at Berkeley’s Institute for Research on Labor and Employment found that Seattle’s $15 minimum wage law has “boosted pay for restaurant workers without costing jobs.”36

Low Wages Paid By Large, Profitable Employers Present a Significant Cost to the Public by Forcing Workers to Rely on Public Assistance in Order to Afford Basic Necessities

Nationally, nearly three quarters (73 percent) of enrollments in America’s major public benefits programs are from working families. With wages that leave their earnings below subsistence levels, these workers must rely on additional support from programs like the Supplemental Nutrition Assistance Program (SNAP), Medicaid, Children’s Health Insurance Programs, and the Earned Income Tax Credit (EITC) in order to afford basics like food, housing, and health care.

Data available for some of the largest employers in the retail and fast-food industries indicate that the low wages paid by profitable companies like Walmart and McDonald’s entail substantial costs for the public, as a whole.

A 2013 report from the Democratic Staff of the U.S. House Committee on Education and the Workforce estimates that low wages paid at a single Walmart supercenter cost taxpayers between $900,000 and $1.7 million on average per year.37 Similarly, a 2013 study from the University of California-Berkeley found that the low wages paid by companies in the fast-food industry cost taxpayers an average of $7 billion per year.38 A companion study from NELP found that the bulk of these costs stem from the ten largest fast-food chains, which account for an estimated $3.9 billion per year in public costs.39

Eliminating the Subminimum Wage for Tipped Workers Is a Crucial Part of any Minimum Wage Legislation That Seeks to Make a Significant Difference in the Lives of Low-Wage Workers

For any minimum wage initiative to make a significant difference in the lives of low-wage workers, it should reject a subminimum wage for tipped workers. A subminimum wage for tipped workers has not always existed. Until 1966, there was no federal subminimum wage for tipped workers.40 With the 1966 expansion of the Fair Labor Standards Act (FLSA) to cover hotel, motel, restaurant, and other leisure and hospitality employees who had previously been excluded by the FLSA, the FLSA was amended to allow employers to pay tipped workers a subminimum wage set at 50 percent of the full minimum wage.41 In 1996, when the Republican-controlled Congress raised the federal minimum wage from $4.25 to $5.15, it, bowed to pressure from the restaurant industry,

6 and froze the tipped minimum wage at $2.13, decoupling it from the full minimum wage for the first time, and setting up two decades of a frozen minimum wage for tipped workers.42

Seven states43—California, Nevada, Oregon, Washington, Minnesota, Montana, Maine, and Alaska—do not have a subminimum wage for tipped workers, and Maine voters approved a ballot initiative in November 2016 that gradually eliminates the state’s subminimum wage for tipped workers.44 Tipped workers in these seven states receive the full minimum wage directly from their employer and their tips function as a gratuity should—not as customers subsidizing wages that an employer should be paying, but as supplemental income over and above their wages in recognition of good service. Similarly, Hawaii abolished the subminimum wage for most tipped workers (preserving a very limited subminimum wage of just 75 cents less than the full minimum wage for tipped workers that average at least $7.00 an hour in tips).45

Although some in the restaurant industry claim that most tipped workers earn high incomes, the government data shows that, in fact, the typical tipped worker in Minneapolis earns just a little more than the Minnesota minimum wage. According to the most recent Bureau of Labor Statistics (BLS) data, between November 2012 and May 2015, the median wage, including tips, for restaurant servers in the Minneapolis-St. Paul Bloomington metropolitan area was $8.98 per hour, and the mean (average), including tips, was $10.29 per hour.46 For most of the period covered by the BLS data, the applicable minimum wage was $7.25 per hour, meaning that servers in the Minneapolis metropolitan area averaged between $1.75 and $3.00 an hour in tips—enough to lift them a few dollars above the minimum wage, but not the type of tip income that the restaurant industry often claims is typical.47 Outside of the restaurant industry, tipped jobs include car wash workers, nail salon workers, and pizza delivery drivers—notorious sweatshop occupations where pay is often even lower.

Tipped work is inherently uneven and often unpredictable. While most of us expect to be paid the same for every day or hour we work, for tipped workers this is often not the case. Restaurant servers, who make up one of the largest tipped occupations, may make a substantial amount of money on Friday or Saturday nights but much less on other days of the week. Bad weather, a sluggish economy, the changing of the seasons, a less generous customer, and a host of other factors can also cause sudden drops in their tipped income and lead to economic insecurity.

It is no surprise, then, that, nationally, tipped workers face poverty rates that are about double those for non-tipped workers, and that the poverty rate for waiters and bartenders is even higher.48 Tipped workers across the country are also significantly more likely to rely on public assistance to make ends meet. Close to half (46 percent) of tipped workers and their families rely on public benefits compared with 35.5 percent of non-tipped workers.49

Ultimately, shifting the responsibility to pay workers’ wages to customers under the tipped minimum wage allows employers in a few select industries to benefit from a customer-funded subsidy at the expense of workers’ economic security.

The Complex Subminimum Wage System for Tipped Workers Is Difficult to Enforce and Results in Widespread Noncompliance

The subminimum tipped wage system is difficult to implement and plagued by noncompliance. Both employers and employees find it difficult to track tip earnings, a task that is often complicated by tip sharing arrangements amongst workers. Workers also often fear asking an employer to make up the difference between their earnings and the full minimum wage—an

7 employer might choose to give more favorable shifts to workers who do not make such demands, for example.

Given the implementation challenges inherent in the subminimum wage system, it is not surprising that at 2014 report by the White House National Economic Council and the U.S. Department of Labor found that one of the most prevalent violations amongst employers is failing to properly track employees’ tips and make up the difference between an employee’s base pay and the full minimum wage when tips fail to fill that gap. 50 A survey found that more than 1 in 10 workers employed in predominantly tipped occupations earned hourly wages below the full federal minimum wage, including tips.51

The Restaurant Industry Can Afford a $15 Minimum Wage in Minneapolis without a Tip Credit

While some in the restaurant industry argue that eliminating the tipped subminimum wage would hurt the restaurant industry and/or restaurant workers, the facts belie those claims. In particular, the restaurant industry is strong in the states that have no tipped minimum wage, and sales there have been projected to grow at even faster rates than in many of the states that have retained the tipped minimum wage.

Restaurant sales are expected to reach $799 billion in 2017, according to the latest NRA Industry Outlook.52 Many strong-growth states for restaurant jobs do not allow a tipped minimum wage for tipped workers and must pay tipped workers some of the country’s highest base wage rates. Restaurant employment in California, which has no subminimum wage for tipped workers, is projected to grow by 10.1 percent during the 2016–2026 period.53 In California, the minimum wage is now $10 per hour for small employers (25 or fewer employees) and $10.50 for large employers (26 or more employees), and the minimum wage will reach $15 by 2023.54 In Oregon, where the minimum wage is currently $9.75 and will increase to between $12.50 and $14.75 per hour over the next six years,55 and which similarly has no tipped subminimum wage, restaurant employment is projected to grow by 13.2 percent during that same period.56 And in Washington State, where the minimum wage is $11.0057 and will increase to $13.50,58 restaurant employment growth during the same period is expected to grow by 12.6 percent.59 According to the NRA’s own projections, restaurant employment in the seven states without tipped minimum wage will grow in the next ten years at an average rate of 10.7 percent. 60

Moreover, a 2015 Cornell Hospitality Report looked at the impact of minimum wage increases on restaurant employment and business growth levels over twenty years across the United States. It found that raising the regular and tipped minimum wage will raise restaurant industry wages but will not lead to “large or reliable effects on full-service and limited-service restaurant employment.”61

The Restaurant Industry Is Thriving in Cities like Seattle, San Francisco, and SeaTac That Are Raising Their Minimum Wage to $15 and Have No Tipped Minimum Wage

In addition, the restaurant industry is thriving in cities such as Seattle, San Francisco, and SeaTac, Washington—all of which have all approved a $15 minimum wage and which have no tipped subminimum—demonstrating that this combination is manageable for the restaurant industry and does not hurt jobs.

In a 2015 front-page story titled “Apocalypse Not: $15 and the Cuts that Never Came,” the Puget Sound Business Journal reported on “[t]he minimum wage meltdown that never happened,” explaining that Seattle’s restaurant industry had continued to expand and thrive as the $15 wage phases in.62 More recent reports confirm neither the city’s economy nor the restaurant industry has suffered.63 The most recent study assessing the impact of $15 on Seattle found that the law has increased pay for restaurant workers without costing jobs while the unemployment rate in the city has fallen to 2.6 percent in the last two years.64 Restaurants “were among the city’s fastest growing industries, with more than 33,000 workers in 2016.”65

Similarly, in San Francisco, where there is no tipped subminimum wage and the minimum wage is increasing to $15, the Golden Gate Restaurant Association reports that, “the metrics show that San Francisco has still seen record restaurant growth.”66 The small suburban city of SeaTac, Washington, which is home to the Seattle airport and many hotels and restaurants, has had a similar experience. Before the Washington city implemented a minimum wage increase to $15 in 2014 for workers in the travel and hospitality industry, opponents warned of adverse consequences. Yet, as The Seattle Times summarized, “[f]or all the political uproar it caused, SeaTac’s closely watched experiment with a $15 minimum wage has not created a large chain reaction of lost jobs and higher prices.”67

Restaurants in Cities That Are Raising the Minimum Wage to $15 and Have No Tipped Minimum Wage Are Not Rushing to Abolish Tipping, and Tipping Rates Have Not Dropped Significantly under Such Policies

Contrary to predictions by some, raising the minimum wage to $15 and eliminating the tipped minimum wage at the same time does not lead restaurants to abolish tipping or lead diners to reduce tipping levels. While a small number of mostly high-end restaurants today are experimenting with getting rid of tipping entirely,68 tipping continues to be the norm in states like California, Washington, Oregon, and Minnesota where tipped workers receive the full minimum wage before tips.

In San Francisco, with its minimum wage increasing to $15 by 201869 and no subminimum wage for tipped workers, the Golden Gate Restaurant Association says that “[d]iners in San Francisco reported an average 19% tip rate”—a healthy rate that does not indicate a decline. 70

These reports are confirmed by national data, which shows that “raising the tipped wage significantly increases earnings of workers in FSRs [Full-Service Restaurants].”71 According to University of California researchers, “tipped workers in equal treatment states [with no tipped minimum wage] earn 14.2 percent more than tipped workers in low tipped minimum states.”72 When looking at only waiters and bartenders, data shows that earnings are about 20 percent higher in states where tipped workers must be paid the full minimum wage before tips, than in states that follow the federal $2.13 tipped minimum wage.73

NELP and ROC-United’s report, The Case for Eliminating the Tipped Minimum Wage in Washington D.C.,74 offers additional quantitative and anecdotal evidence that the restaurant industries in cities like Seattle, San Francisco, and SeaTac, which have all adopted a $15 minimum wage and do not permit a subminimum wage for tipped workers, are thriving.

Robust Enforcement of any Minimum Wage Law Adopted by the City Will Be Necessary in Order to Make a Real Difference in the Lives of Low-Wage Workers, and Granting Employees a Private Right of Action to Enforce the Law Is a Key Part of Any Effective Enforcement System

Wage theft is widespread across the country and across industries, costing workers and local economies billions of dollars each year.75 A seminal 2009 study by NELP and other academic partners surveyed over 4,000 workers and found that 26 percent were paid less than the required minimum wage in the previous work week, and nearly two-thirds experienced at least one pay- related violation in the previous week, such as failure to pay overtime, not being paid for all hours worked, and stolen tips.76 The report estimates that workers surveyed lost an average of 15 percent, or $2,634, of their annual wages due to workplace violations.77

Dozens of other studies of specific industries have uncovered similar rates of wage-related violations. A recent NELP study of business outsourcing, for example, found that the restructuring of employment arrangements through multi-layered contracting, the use of staffing or temp firms, franchising, and other means can result in poor working conditions and a lack of corporate responsibility.78 The report focused on non-compliance in some of our largest and fastest-growing sectors. In the fast food industry, it reported that based on a 2014 study, nationally, nearly 90 percent of fast food workers suffered some sort of wage theft on the job.79 In the warehouse and logistics industry, 23.1 percent suffered minimum wage violations and 67.8 percent suffered overtime violations.80 About 80 percent of port truck drivers who transport goods from ports to railheads or logistics firms are classified as independent contractors, and approximately 80 percent of these workers are misclassified.81

Given the information we have about wage theft nationally, as well as the many challenges facing workers who suffer violations, such as the high cost of legal representation, the possibility of retaliation, and language barriers, the numbers highlighted here likely represent only the tip of the iceberg when it comes to wage and hour violations. In short, the wage theft crisis is not only severe, it is pervasive. It affects industries and occupations across our economy, and while it is especially severe among our nation’s low-wage workforce, it is not limited to those sectors.

An effective enforcement scheme must protect workers who come forward to raise complaints, because that is how the vast majority of workplace violations are identified and remedied, given our complaint-driven system of enforcement. An effective scheme must also include strong public and private enforcement tools to better guarantee compliance and help ensure collection of owed wages.

A private right of action gives workers the right to bring a lawsuit in court to address violations and recover their unpaid wages. It is important because wage theft is rampant and government agencies with limited public resources simply cannot tackle enforcement alone. Additionally, public agencies’ funding and priorities for enforcement can change over time and giving workers access to courts ensures they always have a way to protect their rights. To be effective, a private right of action must also allow workers to recover attorneys’ fees and costs, since the prohibitive cost of legal representation is a significant barrier to low-wage workers who need to protect their rights in court.82 NELP strongly encourages the Minneapolis City Council to preserve the private right of action that has been included in the bill under consideration today.

For more information on enforcement tools that NELP recommends for any effective enforcement system, please refer to NELP’s policy brief entitled, “The Top 5 Enforcement Tools for Local Minimum Wage Laws.”83

Thank you so much for the opportunity to testify today. I would be happy to answer any questions that you may have.

For more information, please contact NELP Staff Attorney Laura Huizar at [email protected]. For more about NELP, visit www.nelp.org or www.raisetheminimumwage.org.

1 Maine voters approved a gradual elimination of the state’s subminimum wage in November 2016. Darren Fishell, “Maine votes to raise minimum hourly wage to $9 next year, $12 in 2020,” Bangor Daily News, Nov. 9, 2016, available at http://bangordailynews.com/2016/11/09/politics/maine-votes-to-raise-minimum-hourly-wage-to-9- next-year-12-in-2020/. 2 Municipal Minimum Wage Draft Ordinance – REVISED (June 21, 2017), available at http://www.minneapolismn.gov/meetings/legislation/WCMSP-199379. 3 Id. 4 Economic Policy Institute, Family Budget Calculator, http://www.epi.org/resources/budget/ (last viewed June 21, 2017). 5 See supra note 2. 6 National Employment Law Project, Occupational Wage Declines Since the Great Recession (Sept. 2015), available at http://www.nelp.org/content/uploads/Occupational-Wage-Declines-Since-the-Great-Recession.pdf. 7 Id. 8 National Employment Law Project, Fight for $15: Four Years, $62 Billion (Dec. 2016) at 1, available at http://www.nelp.org/content/uploads/Fight-for-15-Four-Years-62-Billion-in-Raises.pdf. 9 Id. 10 Id. 11 RaisetheMinimumWage.com, Campaigns, http://raisetheminimumwage.com/state-campaigns/?campaign- status=active (last viewed June 21, 2017). 12 Id. 13 Id. 14 Hart Research, Support for a Federal Minimum Wage of $12.50 or above (Jan. 2015), available at http://www.nelp.org/content/uploads/2015/03/Minimum-Wage-Poll-Memo-Jan-2015.pdf. 15 Victoria Research, Results of National Poll of Workers Paid Less than $15 Per Hour (Oct. 2015), available at http://www.nelp.org/content/uploads/Low-Wage-Worker-Survey-Memo-October-2015.pdf. 16 Id. 17 Erin Golden, “Minneapolis $15-an-hour minimum wage petition has enough signatures for November ballot,” Star Tribune, July 21, 2016, available at http://www.startribune.com/minneapolis-15-minimum-wage-petition-has- enough-signatures-for-november-ballot/387673321/. 18 15Nowmn.nationbuilder.com/poll, Poll: Minneapolis Voters Strongly Support $15/hour Charter Amendment, http://15nowmn.nationbuilder.com/poll (last viewed June 21, 2017). 19 Michael Reich et al (eds.), University of California Press, When Mandates Work: Raising Labor Standards at the Local Level (2014), available at http://irle.berkeley.edu/publications/when-mandates-work/. 20 Arindrajit Dube, Minimum Wages and the Distribution of Family Incomes (Dec. 2013) at 31, available at https://dl.dropboxusercontent.com/u/15038936/Dube_MinimumWagesFamilyIncomes.pdf (“I find robust evidence that minimum wages tend to reduce the incidence of poverty, and also proportions with incomes under one-half or three-quarters of the poverty line”).

21 William Copeland & Elizabeth J. Costello, Am. Econ. J. Appl. Econ., Parents’ Incomes and Children’s Outcomes: A Quasi-Experiment (Jan. 2010) at 1. 22 Rajiv Bhatia, Human Impact Partners, Health Impacts of Raising California’s Minimum Wage (May 2014) at 3, available at http://healthpolicy.ucla.edu/publications/Documents/PDF/2014/SB935_HealthAnalysis.pdf. 23 Id. 24 Id. 25 Lisa Dodson & Randy Albelda, Center for Social Policy, Univ. of Mass., Boston, How Youth Are Put at Risk by Parents’ Low-Wage Jobs (Fall 2012) at 9–13. 26 Editorial Board, “Raise the Minimum Wage,” BloombergView, Apr. 18, 2012, available at http://www.bloomberg.com/news/2012-04-16/u-s-minimum-wage-lower-than-in-lbj-era-needs-a-raise.html. 27 Arindrajit Dube et al, The Review of Economics and Statistics, Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties (Nov. 2010) at 92(4): 945–964. A summary of the study prepared by NELP is available at http://nelp.3cdn.net/98b449fce61fca7d43_j1m6iizwd.pdf. 28 Similar, sophisticated new research has also focused in particular on teen workers—a very small segment of the low-wage workforce affected by minimum wage increases, but one that is presumed to be especially vulnerable to displacement because of their lack of job tenure and experience. However, the research has similarly found no evidence that minimum wage increases in the U.S. in recent years have had any adverse effect on teen employment. See Sylvia Allegretto et al, Industrial Relations, Do Minimum Wages Reduce Teen Employment? (Apr. 2011) at vol. 50, no. 2. A NELP Summary is available at http://nelp.3cdn.net/eb5df32f3af67ae91b_65m6iv7eb.pdf. 29 Hristos Doucouliagos & T.D. Stanley, British J. of Indus. Relations, Publication Selection Bias in Minimum-Wage Research? A Meta-Regression Analysis (May 2009) at Vol. 47, Iss. 2. 30 Paul Wolfson & Dale Belman, Upjohn Inst. for Employ. Res., What Does the Minimum Wage Do? (2014). 31 Center for Economic & Policy Research, 2014 Job Creation Faster in States that Raised the Minimum Wage (June 2014), available at http://www.cepr.net/index.php/blogs/cepr-blog/2014-job-creation-in-states-that-raised-the- minimum-wage. 32 Michael Reich et al, Univ. of Calif.-Berkeley, The Economic Effects of a Citywide Minimum Wage (2007), available at http://www.irle.berkeley.edu/cwed/wp/economicimpacts_07.pdf. 33 Michael Reich et al (eds.), Univ. of Calif. Press, “When Mandates Work: Raising Labor Standards at the Local Level,” (2014) at 31, available at http://irle.berkeley.edu/publications/when-mandates-work/. See also Susan Berfield, “San Francisco’s Higher Minimum Wage Hasn't Hurt the Economy,” BloombergBusiness, Jan. 2014, available at http://www.businessweek.com/articles/2014-01-22/san-franciscos-higher-minimum-wage-hasnt-hurt- the-economy; Carolyn Lochhead, “S.F. praised as model for U.S. on increasing minimum wage,” SF Gate, Jan. 28, 2014, available at http://www.sfgate.com/politics/article/S-F-praised-as-model-for-U-S-on-increasing- 5183378.php. 34 Bureau of Business and Economic Research, University of New Mexico, Measuring the Employment Impacts of the Living Wage Ordinance in Santa Fe, New Mexico (June 2006), available at http://bber.unm.edu/pubs/EmploymentLivingWageAnalysis.pdf. 35 John Schmitt & David Rosnick, Center for Econ. & Policy Research, The Wage and Employment Impact of Minimum‐Wage Laws in Three Cities (Mar. 2011) at 1, available at http://www.cepr.net/documents/publications/min-wage-2011-03.pdf. For a helpful overview of this literature on the impact of city minimum wages, see Michael Reich et al, Local Minimum Wage Laws: Impacts on Workers, Families and Businesses: Report prepared for the Seattle Income Inequality Advisory Committee (Mar. 2014) at 17–19, available at http://murray.seattle.gov/wp-content/uploads/2014/03/UC-Berkeley-IIAC-Report-3-20- 2014.pdf. 36 Gene Johnson, “Study: Seattle minimum wage hasn’t cut jobs,” The Washington Post, June 20, 2017, available at https://www.washingtonpost.com/national/apnewsbreak-study-seattle-minimum-wage-hasnt-cut- jobs/2017/06/20/c6480040-55f4-11e7-840b-512026319da7_story.html?utm_term=.e53010039d07. 37Democratic staff of the U.S. House Committee on Education and the Workforce, The Low-Wage Drag on Our Economy: Wal-Mart’s low wages and their effect on taxpayers and economic growth (May 2013), available at http://democrats-edworkforce.house.gov/imo/media/doc/WalMartReport-May2013.pdf. 38 Sylvia Allegretto et al, Fast Food, Poverty Wages: The Public Cost of Low-Wage Jobs in the Fast-Food Industry (Oct. 2013), available at http://laborcenter.berkeley.edu/publiccosts/fast_food_poverty_wages.pdf.

39 National Employment Law Project, Super-sizing Public Costs: How Low Wages at Top Fast-Food Chains Leave Taxpayers Footing the Bill (Oct. 2013), available at http://www.nelp.org/content/uploads/2015/03/NELP-Super- Sizing-Public-Costs-Fast-Food-Report.pdf. 40 William G. Whitaker, Congressional Research Service, The Tip Credit Provisions of the Fair Labor Standards Act at CRS-3 (Mar. 2006). 41 Id. 42 Id. at CRS-6. 43 Restaurant Opportunities Centers United & National Employment Law Project, The Case for Eliminating the Tipped Minimum Wage in Washington, D.C. (May 2016), available at http://nelp.org/content/uploads/Report- Case-Eliminating-Tipped-Minimum-Wage-Washington-DC.pdf. 44 See supra note 1. 45 Hawaii currently allows employers to take a 75 cent tip credit when employees earn $15.50 or more an hour in wages plus tips. In 2017, employers will continue to be authorized to take a 75 cent tip credit but only if employees earn $16.25 or more per hour in wages plus tips. Ultimately, the minimum wages plus tips threshold will rise to $17.10 in 2018. See State of Hawaii Department of Labor and Industrial Relations, Notice to Employees: Tip Credit under the Hawaii Wage and Hour Law (June 2014), available at http://labor.hawaii.gov/wsd/files/2014/06/Tip-Credit-Notice-with-exhibits-June-2014.pdf. 46 National Employment Law Project, Minnesota Has Consistently Rejected a Lower Minimum Wage for Tipped Workers—and Minneapolis Should Not Consider One Now (Feb. 2017) at 2, available at http://www.nelp.org/content/uploads/MN-One-Fair-Wage-Reject-Lower-Minimum-Wage-for-Tipped-Workers- Minneapolis-2-27-2017.pdf. 47 Id. 48 Sylvia A. Allegretto & David Cooper, Twenty-three Years and Still Waiting for Change: Why It’s Time to Give Tipped Workers the Regular Minimum Wage (July 2014), available at http://www.epi.org/files/2014/EPI-CWED- BP379.pdf (“[T]he poverty rate of non-tipped workers is 6.5 percent, while it is 12.8 percent for tipped workers in general and 14.9 percent for waiters and bartenders.”) (hereinafter “Allegretto & Cooper (2014)”). 49 Id. at 3. 50 National Economic Council et al., The Impact of Raising the Minimum Wage on Women and the Importance of Ensuring a Robust Tipped Minimum Wage (Mar. 2014) at 7, available at http://www.whitehouse.gov/sites/default/files/docs/20140325minimumwageandwomenreportfinal.pdf. 51 Id. at 6. 52 National Restaurant Association, 2017 National Restaurant Association Restaurant Industry Outlook, http://www.restaurant.org/Downloads/PDFs/News-Research/2017_Restaurant_outlook_summary-FINAL.pdf (last viewed June 21, 2017). 53 National Restaurant Association, Projected Restaurant Employment Growth 2016-2026, http://www.restaurant.org/Restaurant/media/Restaurant/SiteImages/News%20and%20Research/Forecast/2016/ 2016-Employment-Growth-Map.jpg (last viewed June 21, 2017). 54 United States Department of Labor, Wage and Hour Division, Minimum Wage Laws in the States – January 1, 2017, https://www.dol.gov/whd/minwage/america.htm (last viewed June 21, 2017); RaisetheMinimumWage.com, Campaigns, http://raisetheminimumwage.com/state-campaigns/ (last viewed June 21, 2017). 55 Id. 56 National Restaurant Association, Projected Restaurant Employment Growth 2016-2026, http://www.restaurant.org/Restaurant/media/Restaurant/SiteImages/News%20and%20Research/Forecast/2016/ 2016-Employment-Growth-Map.jpg (last viewed June 21, 2017). 57 United States Department of Labor, Wage and Hour Division, Minimum Wage Laws in the States – January 1, 2017, https://www.dol.gov/whd/minwage/america.htm (last viewed June 21, 2017). 58 Janet I. Tu, “Voters approve minimum wage increase to $13.50 in Washington state,” The Seattle Times, Nov. 8, 2016, available at http://www.seattletimes.com/seattle-news/politics/washington-state-minimum-wage-initiative- 1433/. 59 National Restaurant Association, Projected Restaurant Employment Growth 2016-2026, http://www.restaurant.org/Restaurant/media/Restaurant/SiteImages/News%20and%20Research/Forecast/2016/ 2016-Employment-Growth-Map.jpg (last viewed June 21, 2017).

60 Based on NRA employment data for California, Nevada, Oregon, Washington, Alaska, Minnesota, and Montana. See National Restaurant Association, Projected Restaurant Employment Growth 2016-2026, http://www.restaurant.org/Restaurant/media/Restaurant/SiteImages/News%20and%20Research/Forecast/2016/ 2016-Employment-Growth-Map.jpg (last viewed June 21, 2017). 61 Michael Lynn & Christopher Boone, Have Minimum Wage Increases Hurt the Restaurant Industry? The Evidence Says No! (2015), Cornell Hospitality Report, available at http://scholarship.sha.cornell.edu/cgi/viewcontent.cgi?article=1000&context=chrreports. 62 Paul Constant, “You Should Read This Story About Seattle’s ‘Minimum Wage Meltdown That Never Happened,’” Civic Skunk Works, October 23, 2015. 63 Blanca Torres, “A year in, ‘the sky is not falling’ from Seattle’s minimum-wage hike,” The Seattle Times, March 31, 2016, available at http://www.seattletimes.com/business/economy/a-year-in-the-sky-is-not-falling-from- seattles-minimum-wage-hike/. 64 See supra note 36. 65 Id. 66 Samantha Higgins, Golden Gate Restaurant Association, The State of the Industry: An Update from GGRA’s Executive Director (Apr. 2016), available at http://ggra.org/the-state-of-the-industry-an-update-from-ggras- executive-director/. 67 Amy Martinez, “$15 wage floor slowly takes hold in SeaTac,” Feb. 13, 2015, The Seattle Times, available at http://www.seattletimes.com/seattle-news/15-wage-floor-slowly-takes-hold-in-seatac/. 68 See, e.g., Pete Wells, “Danny Meyer Restaurants to Eliminate Tipping,” Oct. 14, 2015, The New York Times, available at http://www.nytimes.com/2015/10/15/dining/danny-meyer-restaurants-no-tips.html; Bret Thorn & Nancy Kruse, “Is tipping on the way out?,” Nation’s Restaurant News, Mar. 1, 2016, available at http://nrn.com/operations/tipping-way-out; Phil Vettel, “No-tipping policy begins at NYC restaurant and industry is watching,” Chicago Tribune, Nov. 20, 2015, available at http://www.chicagotribune.com/dining/ct-no-tipping-nyc- restaurant-danny-meyer-20151119-story.html. 69 RaisetheMinimumWage.com, Campaigns, http://raisetheminimumwage.com/ (last viewed June 21, 2017). 70 Samantha Higgins, Golden Gate Restaurant Association, The State of the Industry: An Update from GGRA’s Executive Director (Apr. 2016), available at http://ggra.org/the-state-of-the-industry-an-update-from-ggras- executive-director/. 71 Sylvia Allegretto & Carl Nadler, Tipped Wage Effects on Earnings and Employment in Full-Service Restaurants, Industrial Relations, Vol. 54, No. 4 (Oct. 2015), available at http://www.irle.berkeley.edu/cwed/allegretto/pubs/AllegrettoNadler.pdf. See also Albor Ruiz, Domino’s Pizza workers win settlement holding parent corporation accountable for franchise’s labor law violations, Daily News, Feb. 13, 2014, available at http://www.nydailynews.com/jobs/labor-lawsuit-domino-fall-article-1.1613963 (discussing settlement in lawsuit against Domino’s Pizza and the sweatshop conditions for workers). 72 Allegretto & Cooper (2014) at 11. 73 Id. 74 Restaurant Opportunities Centers United & National Employment Law Project, The Case for Eliminating the Tipped Minimum Wage in Washington, D.C. (May 2016), available at http://nelp.org/content/uploads/Report- Case-Eliminating-Tipped-Minimum-Wage-Washington-DC.pdf. 75 Brady Meixell & Ross Eisenbrey, Economic Policy Institute, An Epidemic of Wage Theft Is Costing Workers Hundreds of Millions of Dollars a Year (Sept. 2014), available at http://www.epi.org/publication/epidemic-wage- theft-costing-workers-hundreds/. 76 National Employment Law Project et al., Broken Laws, Unprotected Workers: Violations of Employment and Labor Laws in America’s Cities (Sept. 2009), available at http://www.nelp.org/publication/broken-laws- unprotected-workers-violations-of-employment-and-labor-laws-in-americas-cities/. 77 Id. at 5. 78 Catherine Ruckelshaus et al., National Employment Law Project, Who’s the Boss: Restoring Accountability for Labor Standards in Outsourced Work (May 2014) at Executive Summary, available at http://www.nelp.org/content/uploads/2015/02/Whos-the-Boss-Restoring-Accountability-Labor-Standards- Outsourced-Work-Report.pdf. 79 Id. at 11. 80 Id. at 15. 14

81 Id. at 22. In addition, “in audits of employers in 1999 and 2000, the US Department of Labor (USDOL) found high rates of minimum wage, overtime and other violations across the country, including in 50 percent of Pittsburgh restaurants, 74 percent of Georgia day care centers, 50 percent of St. Louis nursing homes, 38 percent of Reno hotels and motels, and 47 percent of adult family homes in Seattle, to name just a few.” National Employment Law Project, Winning Wage Justice: An Advocate’s Guide to State and City Policies to Fight Wage Theft (Jan. 2011) at 5–6, available at http://www.nelp.org/content/uploads/2015/03/WinningWageJustice2011.pdf. 82 Id. at 31. 83 National Employment Law Project, The Top 5 Enforcement Tools for Local Minimum Wage Laws (Dec. 2015), available at http://www.nelp.org/publication/the-top-5-enforcement-tools-for-local-minimum-wage-laws/.

From: Carol To: MinWage Subject: Minimum Wage Date: Thursday, June 22, 2017 2:26:16 PM

I am a restaurant owner in Minneapolis and have been for 25 years. I have no issue with a 15.00 minimum wage as long as there is a tip credit, although it takes the motivation to work harder out of the employees control. My servers at 9.50 an hour plus tips average 25.00 to 30.00 per hour and that is at all 9 Keys Cafes locations. If you do not implement a tip credit you will create a path to self serve restaurants only, more chains, and poor service as they will get 15.00 an hour for just being there .This could make many restaurants want to leave or choose to stay out of Minneapolis. This could affect the tips given by customers as well, if they have knowledge that a server is making 15 dollars they may not feel it is necessary to tip resulting in the average hourly wage actually dropping for a server. Servers often become servers so they don't have to work 40 hours a week to make a living, a 15 minimum wage with no tips would change this. We will lose many great servers in the city of Minneapolis.

Thank you, Carol Hunn-Gregory Keys Foshay bar and Grill 651-274-3837

Did the Mayor and the city council shut down the light rail today to prevent people from attending the meeting? Interesting timing.... From: Brock, Lisa A on behalf of Reich, Kevin A. To: Rivera-Vandermyde, Nuria Subject: FW: Minimum Wage Date: Wednesday, June 21, 2017 4:16:40 PM

Lisa Brock Council Associate Minneapolis City Council – First Ward 612-673-2201 [email protected]

Subscribe to Ward 1 E-Mail Updates HERE

From: Ian Huxford [mailto:[email protected]] Sent: Monday, June 19, 2017 4:17 PM To: Reich, Kevin A. Subject: Minimum Wage

Dear Mr. Reich, I am a 27 year old left leaning independent in your district. I bought a house in the Minneapolis neighborhood in 2012 and love this city. I am contacting you to voice my opposition to the $15 minimum wage vote. I believe it is not based on any good economic data and will have a negative effect on small businesses in Minneapolis. I could support a minimum wage increase, but $15 seems very aggressive to me and feels like a number picked out of thin air to make people feel good. If you vote for the minimum wage increase I feel like I will have no choice but to support whatever Republican challenger comes up next election cycle. Thank you, Ian Huxford

From: Josh H To: MinWage Subject: Wage ordinance Date: Thursday, June 22, 2017 2:25:25 AM

To whom it may concern,

My name is Josh Hoff. I have been a line cook in the state of Minnesota for 9 years. I have had a degree in culinary arts for 6 years.

I have a few comments and questions I'd like submitted to public record at the hearing about wage draft ordinance on June 22nd 2017.

Here I go:

What are the potential damages to our small business community?

Could there be a potential backlash on the disability and wellfare dependant community?

Will this increase the employment rate due to prospective gain in wages, or will the wage increase put too much pressure on businesses forcing them to cut staff and slow hiring?

Will tipped employees be included in the wage increase?

Could this lead to more or less employees being tipped? Support staff, cooks, dishwashers, servers, counter service, etc.

Is it better to have a higher minimum wage and less concrete schedules? When business is slow and employees hours are cut will the increase be worth it?

Comments:

I feel minimum wage is for unskilled labor; people coming into a new field of labor without experience or work history.

To increase the minimum is to assume the base wage will also increase as knowledge and skills are developed in the work place. In the restaurant industry, this seems impossible as profit margins can be razor thin and increase or decrease monthly or weekly.

A business under this new wage could find itself in the black for the busy months and having to close its doors permanently after one month of slow gains.

More personally:

After 6 years with a degree relevant to the restaurant industry, my wage has increased $3.50. I currently make $14.50/hr and I am lucky to have it. I am very good at this job and consider it my craft. This proposed wage increase would leave me at the same wage as amateurs in my field and at the employers discretion for more money. Servers and bartenders in this business make anywhere from $5-$35/hr tips on top of there minimum wage every shift. Most people may not know, but servers in modestly priced restaurants are making between $20/hr and $30/hr including tips and base wage today. By increasing the minimum wage, without a tip credit or special consideration for tipped employees, the already inappropriate wage gap between front and back of the house will be exaggerated to the industry's detriment.

It is my personal opinion that if direct service employees were legally able to share their tips with non-direct service employees the wages in the restaurant industry would stabilize, and there would be no need to increase the minimum wage for our industry at all.

From: Glidden, Elizabeth A. To: MinWage Subject: FW: Minimum Wage Ordinance, Tip Credit Date: Thursday, June 22, 2017 2:01:35 PM

From: Wood Kidner [mailto:[email protected]] Sent: Tuesday, June 20, 2017 2:16 PM To: Council Members Subject: Minimum Wage Ordinance, Tip Credit

I would like to comment on the proposed minimum wage ordinance, in partial support but urging thoughtful phasing and exceptions and in firm opposition to the recommendation to not allow a tip credit.

The ordinance is well intentioned and addresses a real problem. I think it is a leap of faith to think that Minneapolis can unilaterally impose an aggressive leap to a $15 minimum as a city of 400,000 in a metro area of over 2.5 million people without causing a pretty significant migration of service and light industrial businesses outside the city borders, with the impact falling hardest on those with limited transit options and service, many of them exactly whom the ordinance is intended to benefit. I urge the City Council to think carefully about the level of the increase, the phase in schedule and in particular exceptions in favor of small business. Also to be willing to revisit the policy based on actual results. It would be far better to raise the wage on a regional basis, although I recognize that the climate for that right now is not bright.

Finally, to not allow a tip credit seems non-sensical and counter-productive, and I have not seen a good justification for this policy. It will produce a heavy burden on small business that seems motivated more by social engineering than true equity concerns, and is likely to be detrimental to both finances and quality of life in Minneapolis. It seems extremely likely that a $15 minimum wage with no tip credit will:

1. Result in a small number of servers and others already making more, often significantly more, than $15 to get a raise.

2. Result in many more restaurants and other service businesses to change their business model to counter service or IPad ordering to be able to afford the already significant raises to other non-tipped employees, resulting in a less efficient/ customer pleasing business model (or they would be doing it already) and wage cuts or job losses for many more employees.

3. Make the differential cost of operating in Minneapolis that much higher for small businesses (with no benefit to those targeted by the ordinance making less than $15 all in), resulting in additional closures or movements of businesses outside the city limits resulting in fewer job s and lower taxes in Minneapolis and a less vibrant city.

I hope you will reconsider the highly dubious policy of no tip credit.

I have no direct interest in this, just a background in finance as well as having my own business prior to retirement.

Wood Kidner 4926 Colfax Ave S Minneapolis MN 55419

From: Ann Kim To: Frey, Jacob; MinWage; Palmisano, Linea; Hodges, Betsy A. Cc: Conrad Leifur Subject: Re: Minneapolis City Council/Pathway to $15 Date: Thursday, June 22, 2017 6:00:59 PM

As the owner of three Twin Cities restaurants, two in Minneapolis, and the employer of more than 160 individuals, I have watched the recent actions of the Minneapolis City Council with a great deal of interest and increasing alarm. I am seeing what looks like a headlong rush to raise the minimum wage in the city without acknowledging business economics, especially as it pertains to carving out an exemption for tipped employees.

The well-being of our employees, manifested through fair pay and good working conditions, is at the core of what I believe in as a restaurateur. With my husband and co-owner, Conrad Leifur, we believe that a gradually phased-in increase in the Minneapolis minimum wage is reasonable and fair.

But passing this measure without an exception for tipped employees runs counter to common sense. Our tipped servers currently make an average of $38 per hour; raising their minimum wage to $15 per hour would actively increase wage disparity between those employees and our non-tipped staff.

Tipped income is taxable. By definition, it is income. But somehow we are moving forward as though this isn’t case. This is not esoteric economics—this is a very basic business reality.

We have not had a fundamental acknowledgment from the Minneapolis City Government that restaurants operate on a different model than other businesses. We learned that a tip exemption was not going to be included in the minimum wage measure while scheduled public listening sessions were still yet to take place. We have felt shut out of the process by government officials with whom we share fundamental values, and with whom we should be able to find rational common ground.

Increasing the minimum wage without an exemption for tipped employees will hurt the restaurant industry. Our business is always economically difficult, operating on slim profit margins. We will have to increase prices at our restaurants by a minimum of 10 percent across the board without a tipping exemption— which will have immediate and concrete consequences for our businesses, guests and, by extension, our employees.

It’s no exaggeration to say that, in many ways, the food business has been a broken one for some time -- no one knows this more than those of us in the industry who are working very hard to make substantive and sustainable change. But today it seems that our city government has opted to ignore our voices and discard the sort of dialogue upon which healthy communities are supposed to be based.

We welcome the opportunity to work with caring, engaged leadership toward meeting the needs of the working people of our city. But the process currently taking place feels unnecessarily rushed, and influenced by the election season. The decisions being made today will impact lives and businesses in ways that are not being fully considered or debated—impacts that will be irreversible.

Sincerely,

Ann Kim

Chef/co-owner

Young Joni, Pizzeria Lola, Hello Pizza -- Ann Kim, Owner/Chef Pizzeria Lola 5557 Xerxes Ave S | Minneapolis, MN 55410 C (612) 964-5633 | W (612) 424-8338 www.pizzerialola.com | facebook.com/pizzerialola Hello Pizza 3904 Sunnyside Road | Edina, MN 55424 C (612) 964-5633 | W (952) 303-4514 www.hellopizza.com | facebook.com/hellopizza Young Joni 165 13th Ave. NE | Minneapolis, MN 55413 C (612) 964-5633 | www.youngjoni.com From: Ritchie, Heidi on behalf of Frey, Jacob To: alison kirwin Cc: MinWage; Singleton, Marcus Subject: RE: Minimum wage- tip credit Date: Thursday, June 22, 2017 10:00:04 AM

Hi Alison-

Thank you very much for your perspective and your feedback. Your comments are much appreciated and I will make sure they are entered in the public record.

From: alison kirwin [mailto:[email protected]] Sent: Thursday, June 22, 2017 8:32 AM To: Johnson, Andrew; Quincy, John; Warsame, Abdi; Cano, Alondra; Johnson, Barbara A. - City Council; Yang, Blong; Gordon, Cam A.; Glidden, Elizabeth A.; Frey, Jacob; Reich, Kevin A.; Palmisano, Linea; Bender, Lisa; [email protected] Subject: Minimum wage- tip credit

Dear City Council Members,

I own a small business in Minneapolis that has been in business for 67 years. For those who don't know, we are a very popular breakfast spot in Dinkytown with 14 seats and great, inexpensive food. We depend on our regulars (students, business people and neighborhood folks) to sustain our business. The suggested $15/hour minimum wage would deeply affect our business in a negative way. My employees make $7.75/hour, as we are considered a small business. With the addition of the tips that they earn, they routinely make over $15 per hour, and on busy days it can be over $20. The new minimum wage would nearly double my payroll. Not only would I have to raise the wages of 80% of my employees, but I would have to raise the wages of my top paid employees who already make $24/hour. These people are considered managers in our restaurant, and work harder than the rest of the staff. If the rest of the employees are making $15 + tips, conceivably totaling more than $24 per hour, I would have to raise their wages to at least $30 per hour to compensate. Contrary to popular belief, there is not a whole lot of profit built into businesses like mine. My partner and I don't make a significant amount more than our top paid employees. To make up for this giant wage increase, we would have to significantly increase our prices. This may mean that people who dine in our restaurant on a weekly basis, sometimes several times a week, would possibly make the decision to cut back their visits, resulting in a loss of business. It may mean that people would tip less, knowing that the employees already make a "livable wage". It may mean that people who would venture into Minneapolis from the suburbs, or St. Paul, might stop for a meal before they crossed into our city to avoid high priced meals. The difference in what Minneapolis restaurants would have to charge compared to surrounding cities, would put them at an unfair disadvantage. A tip credit would make this situation more fair. As tips are considered income by the IRS, they should be included in the earnings considered in this matter. I would hate to think that this increase in wages, without a tip credit considered, would be the undoing of small businesses that make up the landscape of our city. I think many people would be quite angry if Al's Breakfast, a staple in the Minneapolis community since 1950, would cease to exist because of decision like this. As a new owner in this business, I have been approached by many people about second locations for this Minneapolis institution. As I consider location options, this could greatly impact my decision. Do I open a second location where I have to pay employees double what I would pay in another community? Do I want to charge people what will feel like an excessive amount for simple breakfast food? These are things that I will be considering as I move forward. Our city depends on small business owners. They are what make our city unique and outstanding. Making it hard for them to function will remove many of them from this landscape. Please consider these things as you approach this vote. Thank you, Alison Kirwin Co-owner at Al's Breakfast 612-423-6863 From: Glidden, Elizabeth A. To: MinWage Subject: FW: In support of a tip credit! Date: Thursday, June 22, 2017 2:24:46 PM

From: Ashley Kreidler [mailto:[email protected]] Sent: Monday, June 19, 2017 6:17 PM To: Gordon, Cam A.; Frey, Jacob; Johnson, Barbara A. - City Council; Yang, Blong; Warsame, Abdi; Goodman, Lisa R.; Glidden, Elizabeth A.; Cano, Alondra; Bender, Lisa; Quincy, John; Johnson, Andrew; Palmisano, Linea Subject: In support of a tip credit!

Dear Council Member,

As we move forward with the $15 minimum wage increase, I ask that you allow for a tip credit for tipped workers.

I am proud to live in a city that is adopting a $15 minimum wage and believe it is a positive step in the right direction for low income people and families. However, a $15 min wage for servers/bartenders/other tipped workers that make over $15/hour will not only harm small business, but also the employees that rely on tipped income to support themselves and their families. Prices in restaurants will undoubtedly go up, and the tipping system that we rely on will no longer exist.

I fully support the min. wage increase but also believe the service industry deserves its own system so that thousands of Minneapolis workers don't suffer as a result.

Please let us keep our income!

Sincerely, Ashley Gaard From: [email protected] To: MinWage Subject: $15 min wage Date: Thursday, June 22, 2017 11:34:32 AM

To all City Council members, At this public hearing I ask that you please listen to the actual business owners in your city with an open mind. We are not the bad guys! We care deeply about the community and our employees. But neither of those will be helped if you implement an across-the-board increase to $15/hour without regard to the health of businesses.

While your intentions are good, the unintended negative consequences of raising the minimum wage to $15 for Minneapolis alone will be far-reaching. If you are determined to implement a Minneapolis- only increase, you need to implement it in a way that will minimize the negative impact and give those of us who have mortgaged our homes and taken out SBA loans to open a business time to adjust. Every dollar increase costs us $37,000....that is about 3000 extra Pad Thai chicken we would have to sell! So the cost for us, and most full-service restaurants, is tremendous. It is not just the cost of raising the wage for those making minimum wage, but raising all wages because those with more experience and skill need to make more than minimum wage. That is something your charts and reports don't seem to take into account; that and the fact that many Minnesota customers are price sensitive. We cannot lose money and stay in business! So we will need to raise prices, which in turn will drive some customers away. That is the dilemma we face if you proceed with this ordinance without allowing a tip credit and without allowing a long enough time period to adjust.

So please consider: 1) the need for a tip credit for restaurants for directly tipped employees (not counter service employees) in order to survive the tremendous cost increase without needing to price ourselves out of the competition, as well as to keep balance between the front-of-the-house and kitchen employees. And 2) the need to implement the increase over 7 years to allow time to adjust, especially for independently-owned businesses.

Thank you for your careful consideration of this. Best Regards, Katey Leitch Ginger Hop Restaurant

From: Wallace, Lindsey A To: MinWage Subject: FW: The Minneapolis Tip Credit Debate Date: Thursday, June 22, 2017 3:35:34 PM

Please include the below comment in the public record for minimum wage, thanks!

From: [email protected] [mailto:[email protected]] Sent: Tuesday, March 28, 2017 4:40 PM To: Council Members Subject: The Minneapolis Tip Credit Debate

Ladies and Gentlemen of the Minneapolis City Council, Good Afternoon, my name is Taylor MacDonald. Not a long standing resident of the Twin Cities, having just moved here almost 3 years ago, I am new to the Minneapolis service industry in comparison to some of my fellow co-workers and friends that I now call my restaurant extended family. I have however worked in the service industry previously in South Florida since 2003.

I started working back of house as a line cook and over the course of 6 years worked my way up to kitchen manager and sous at the restaurant I worked in for 10 years. I made a livable wage but it wasn't until I transitioned from kitchen to server that I was able to have wonderful interactions with guests and had the ability to legitimately dictate the form and craft of service that would cause me to reach the level where I am today. After moving to Minnesota mid 2014 and seeing that I would be making an hourly wage that was almost double the Florida hourly wage for servers I was ecstatic! I couldn't believe that cost of living in Minneapolis metro area was easily half the amount that it was in Fort Lauderdale. Not to mention I felt I was working in an industry that cared about customer service so much more in-depth than the one I had recently come from. Within 6 months of relocating, I had gotten a job with Surly Brewing Company as a server in their new facility. There, the taproom works off of a tip pool for the entire shift and the tips collected are formulated and distributed fairly amongst the staff, tipped staff (servers and bartenders) as well as percentages going to support staff (barbacks, hosts, wait assists and bussers).

One of the reasons I decided on my move from Florida to Minneapolis was due to the fact that I felt better opportunity awaited me here. The ability to learn more about the service industry I love working in (food, local sourcing, beer and coffee). I've learned a lot in the last 3 years and am greatful for the knowledge my superiors and business owners have taught me. However, I feel that if the tipping system in Minneapolis goes away and a standard $15 dollar an hour wage is given to ALL employees, I may end up having to leave this industry I've spent over a decade learning about and perfecting my craft for. With Federal and State taxes imposed in Minnesota, the pay for a 35-40 hour work week at $15 dollars an hour will never be able to help me buy a home in the state that I have decided to call my home. The state where I want to start a family. While living here I met a woman who will soon become my wife (we recently got engaged). She is a server in Minneapolis as well and a much better one, I must admit, than I. This transition to an all around wage scares us because both of us are ready to start our lives as a family and purchase a home and have children. Both of us being over the age of 30, and eventually wanting to possibly go back to school and learn a new trade, this will no longer be an option if both of us are getting paid $15 an hour. My wife has expressed wanting to go back to school and get out of the service industry and this change in wages may happen so quickly for us that she feels like she may not have a chance to get out and go back to school quick enough before this is set in motion. We have no other industry to turn to in order to make a living to support our future family. We are afraid we will have to uproot again and relocate.

I am by no means saying that non tipped employees don't deserve to be brought above the poverty line. They work their asses off and every facet of a restaurant would fail to work without kitchen staff or support staff. However, all we are asking is for the option to give the raise to them and freeze tipped employees wages and let us keep the tips we work so hard to make. Let us govern ourselves, not all servers and business owners are selfish and if it comes down to it we would prefer giving any raises to kitchen and non tipped staff than the answer from any server you ask is absolutely!

As of right now, the only positive option I am aware of for the minimum wage increase is Pathway to 15. This will give business owners the opportunity to span out the increase without having to resort to drastic changes in staffing or menu pricing and avoid restaurant closure. The same options were given to other cities, such as Seattle, with success in keeping small businesses thriving.

Thank you in advance for your listening ear and hopefully come the near future, enough of the career servers and bartenders voices will be heard and we will be able to have an option when weighing in on this issue.

My regards and trust, Taylor MacDonald

Sent from my LG V10, an AT&T 4G LTE smartphone

From: [email protected] To: [email protected]. Subject: Minimu wage constituent letter Date: Thursday, June 22, 2017 11:18:00 AM Attachments: letter regarding min wage and tip credit.docx

To: Mayor Betsy Hodges and the entire City Council From: Omar Marei and Deanne Michael Re: Proposed Minimum wage proposal and Tip Credit

Minimum wage:

Let us start out by saying that first, we see ourselves as left leaning progressives, who have made a conscious decision to stay in the city and not flee to other communities. What we love about the city outweighs some of the negatives, higher property taxes, parking challenges, air plane noise, etc.

We support progressive views and taking the lead on initiatives that are beneficial to people, society and the environment. That said, we plead with the City leadership to slow down and make a decision with all eyes open, all views taken into account, a fair discussion and analysis of the pros and cons.

Our first concern is the notion of one size fits all. There is much debate about what the appropriate level that is for a fair sustainable minimum wage. What works in outstate Minnesota surely would differ from Urban areas. What is appropriate in New York City or San Francisco is likely different from Minneapolis. Perhaps what works for the Kenwood area may differ from some parts of the City that are more economically depressed and would benefit from entrepreneurs encouraged to start small businesses and restaurants without a mandate that may prohibit their economic chance for succeeding.

Why not approach this as a Hennepin County initiative. Get broader buy in, and a transition plan that the whole metro agrees with. First and foremost, this would insure a fair playing field, and minimize or avoid further incentives for businesses (and residents) to flee the City limits for the suburbs. Please, please, we urge our leadership to take a holistic view. Let’s do a good thing with regards to sustainable wages, but let’s be smart about.

Tip Credit:

Above, we are appealing for a rethink of the Minimum wage. Here we want to share our strong views about the lack of a Tip Credit in the current draft ordinance.

Our first question is what is the objection? If the goal is to insure all employees are at a threshold, either $15 or an amended amount, why not include the tips? The tips are already included as taxable wages that the employee pays FICA on, and the employer pays FICA and other business taxes. To us this seems like a small business suicide, and likely harmful to the employees that were intended to be benefited.

With a Tip Credit, the servers who currently do not earn the new minimum wage of $15 or agreed amount will benefit by the proposed new ordinance. Meanwhile, without a Tip Credit, the small neighborhood business owners will suffer considerably, be at risk of not surviving and or moving to adjacent communities, such as Richfield, Edina, Highland Park (St Paul), Golden Valley, Robbinsdale, Fridley, Columbia Heights, etc. We urge our leaders to please slow down, take time to have an informed two way dialogue, talk about the risks associated with not having a Tip Credit, vs having a Tip Credit. Rather than risking economic ruin onto our small businesses, let’s take a phased approach. Start with a Tip Credit and revisit the topic regularly to evaluate the successes or lack of successes intended. Why throw out the baby with the bath water. Minneapolis has so many vibrant small business restaurants in many of the neighborhoods; let’s not risk losing them, either to economic failure or relocation to neighboring cities. We have a nice cute small neighborhood restaurant that we support up to three times a week, we often walk there. They have affordable prices, in addition to the great food and service. But there is no question that their cost of doing business will jump considerably. This no doubt means one of several things, raising prices, relocating outside of the City limits or going out of business. If they raise prices, we will go much less often, less business for the owners, less income for the servers. We currently have a choice of another restaurant which we also like, but we rarely go because their prices are much higher, so pricing does matter.

Please, our plea is lets slow down, listen, do the right thing (fair sustainable wage), but do it thoughtfully!!!! Let’s not let special interests and their campaign contributions cloud clear and fair thinking. Let take a lead in a fair democracy where all citizens’ voices are valued, rather than a few moneyed special interests. We urge our leadership to put as much vigor into this idea as you are putting towards the sustainable wage topic (which we support – in a thoughtful manner).

Omar Marei and Deanne Michael 5015 Wentworth Ave Minneapolis, 55419 [email protected] From: Dahler, Ken To: MinWage Subject: FW: Comments for June 22 hearing. Speaker number 160 Omar Marei Date: Friday, June 23, 2017 8:35:44 AM

Ken Dahler l Council Committee Coordinator l City of Minneapolis – Clerk’s Office l 350 S. Fifth St. – Room 304 612-673-2607 l [email protected]

-----Original Message----- From: Omar Marei [mailto:[email protected]] Sent: Thursday, June 22, 2017 9:13 PM To: Council Comment Subject: Comments for June 22 hearing. Speaker number 160 Omar Marei

I stand here as a citizen of mpls not as a business owner, just a passionate resident who grew up and loves mpls I support the $15 wage but with an amendment for a tip credit. I implore you to not throw out the baby with the bath water Until we have a level playing field thru out Hennepin cry and Ramsey cry, please avoid the one size fits all approach. Be flexible w our smal and thriving locally owned neighborhood small businesses

I am not opposed to the $15 wage - but we are at a loss as to why you are opposed to tip credit. Please explain why ? It is taxable income ,EE and ER pay fica, employer taxes, fed and state income taxes are paid. What I ask is how can you have it both ways, tax the tip income, yet not count the tips as part of hourly wage - please explain !!

Why can't we start w tip credit and revisit the topic annually ? Mean time we enhance the thriving small business restaurant community

We would be devastated to lose our neighborhood restaurant which we use as our extended kitchen three times a week.

Raise prices and we will reduce our visits, the restaurant will have less revenue, in addition to the added cost for tipped workers. They will either shut down, or move to adjacent communities- why risk messing with a business that thrives and does not hinder the goal of $15.

Until the playing field someday becomes level, please consider the tip credit - why hand our adjacent communities of Edina Colombia hrs Richfield or fridley low hanging fruit incentive to draw away many of our thriving small businesses in mpls. What is benefit of the $15 if we lose these businesses

Please let's proceed cautiously and rationally and take extra time if that is what we need

Omar (mobile) From: Wallace, Lindsey A To: MinWage Subject: Public Comment Date: Thursday, June 22, 2017 3:23:16 PM

Please include the below comment in the public record for minimum wage, thanks!

From: Shannon Marple [mailto:[email protected]] Sent: Monday, June 12, 2017 1:10 PM To: Bender, Lisa Subject: Tip credit

Dear Ms. Bender,

I don't have to tell you that we are on the verge of making the long overdue and absolutely necessary implementation of a $15/hr minimum wage hike. I think this is fantastic. Every person who is willing to work hard deserves to make a livable wage. I do however, need to make my voice heard regarding the tip credit debate.

I have worked in the restaurant industry for almost 25 years. Nearly 20 of those years have been spent working in the thriving restaurant community in Minneapolis. I love what I do. I take great pride in what I do. I have spent years honing my skills, developing my craft and learning all I can about running a successful restaurant. I am blessed to be able to say that I currently work as a bar manager and bartender at Hell's Kitchen downtown. I love my job and my industry. I enjoy talking about food and wine with my guests and doing everything in my power to give them a positive and memorable dining experience. I'm able to make a very good living doing what I do and and that living is based largely on tips. Contrary to the propaganda that has been put out there in the news media, those of us who have chosen this industry as a career do not feel that tipping is degrading. We certainly don't feel it should be compared to "slavery". We have chosen this industry, in part, because of the flexibility it provides with scheduling and income. I can't count how many people I know who have been able to raise their families and spend as much time as possible with them because of this flexibility. Many of these people are single parents.

I am writing you to let you know how absolutely vital it is that a tip credit is factored into the new minimum wage legislation. I am not saying this only because it will, inevitably, negatively affect my wages and those of so many in my industry. I also say this because it will absolutely decimate the restaurant community as we know it. Profit margins of restaurants are incredibly thin. Most small, independent restaurants will be forced to close. We will be left largely with cafeteria style dining and expensive fine dining. The few casual, full service restaurants that try and stay open in this climate will be staffed by young, inexperienced kids who don't know the difference between between a Merlot and a Moscato and more importantly, they won't care. Raising the minimum with no allotment for tips will create the need for restaurants to raise their prices astronomically and do away with tipping in favor of a "service charge". Please don't let it come to this!

I implore you Ms. Bender, please make your vote on this issue one that will help all restaurant employees, both tipped and non tipped. Please vote to freeze wages at $9.50 for tipped employees. Please don't vote to destroy our vibrant restaurant community.

Thank you for your time and attention.

Sincerely, Shannon Marple-Hespe

From: Joseph Musco To: MinWage Subject: Minimum wage issues: Social Security, Medicare, FICA, FUTA, SUTA Date: Thursday, June 22, 2017 1:15:47 AM

I support a $15 an hour minimum wage with no tip credit implemented immediately.

Any wage lower than $15 per hour compounds the plight of the poor and all Americans as they age. Social Security is calculated based on your taxed wages and employer match. Under reported tip income damages the safety net (reducing payments to unemployment insurance and Medicare) for all people over time and directly for individuals who get less back in Social Security due to underreporting of tip income.

The Minnesota Restaurant Association claims a $28/hour average wage for servers. Are they paying the payroll tax match at a $28/hour average as well?

If any tip credit waiver to the $15 hour wage is negotiated, I propose it be tied to the IRS Tip Rate Determination Agreement (TRDA), as are currently popular in hospitality center Las Vegas, Nevada. These agreements insure tax compliance by all, require 75% of workers to agree to them, and commit hospitality businesses to fair and honest tax policies. Employees and employers certify a tipped wage and promise to pay taxes and allow for periodic audits at that wage.

I oppose tip credits.

However, if any tip credit or waiver should be proposed so that a $15/hour wage can pass, any compromise should include a requirement by Minneapolis establishments to commit to an IRS TRDA tip agreements which stipulate a tipped wage greater than $15/hour.

Please see the IRS website for specifics about TRDA agreements. https://www.irs.gov/businesses/small-businesses-self-employed/voluntary-compliance-agreements- restaurant-tax-tips

Thanks, Joseph Musco Minneapolis, MN From: Brock, Lisa A on behalf of Reich, Kevin A. To: Rivera-Vandermyde, Nuria Subject: FW: Minimum Wage Date: Wednesday, June 21, 2017 4:17:00 PM Attachments: image002.png

Lisa Brock Council Associate Minneapolis City Council – First Ward 612-673-2201 [email protected]

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From: Lynn Noren [mailto:[email protected]] Sent: Monday, June 19, 2017 10:05 AM To: Reich, Kevin A. Cc: Noel McCormick Subject: Minimum Wage

Greetings Council Member Reich,

I’m writing on behalf of Rise, Inc. a provider of community-based employment and housing services with an office in your district at 2003 Central Avenue NE. Rise has over 19 locations throughout the Twin Cities and Central Minnesota, and we partner with businesses throughout the State of Minnesota to support people who have disabilities in obtaining jobs and housing of their choice. Our team members at Rise are paid according to rates that are established by the Minnesota Legislature for Medicaid programs throughout the State. We find ourselves in a difficult time as the rates have not increased in the past three years. A wage increase for “some” of our team members is not possible---and our current hiring rate is $12.50, quite a difference from $15.00 per hour. We have no means of increasing pricing, as I said previously, the rates for payment are set by the legislature, with wage rates also governed by the rate frameworks.

The people we support need the services that are provided by Rise and would be at risk of losing them if they are provided in Minneapolis if the wage rate is enacted. There are thousands of community-based service providers who are also in the same boat---these important services would be forced to close down their Minneapolis-based operations.

I’m sure that you can understand this challenge. I’d be more than happy to discuss it with you further to see if there is a way to account for Medicaid funded programs in Minneapolis. It’s hard enough for us to operate these days, with no increases in funding---a higher wage rate is just not possible. Please assure that the people being served in Minneapolis who have disabilities and other challenges can continue to have the supports they need!

Lynn Noren President

Phone: 763.783.2814 | Fax: 763.786.0008 8406 Sunset Rd NE | Spring Lake Park, MN 55432 | rise.org

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