He decided to be transparent about a state-mandated increase in his costs. The audacity. In the uproar over Minnesota’s increased minimum wage, the Oasis Cafe in Stillwater has been called many things. We’ll add this: The establishment is a refuge for smart public policy. Owner Craig Beemer’s decision to add a 35-cent charge to every bill to offset the minimum wage increase to $8 is a useful move. He is making what lawmakers hoped would be a largely hidden “tax” apparent to all. Good for him. When legislators tax or otherwise cause expenses for private enterprises to increase, they do so expecting the effect will melt invisibly into the cost of doing business, and no one will be the wiser. Not so, Beemer is saying with the “minimum wage fee” on every customer tab. He began adding the charge on Aug. 1, the day the increase took effect, the Pioneer Press’ Nick Woltman reported. A 75-cent increase in the minimum wage will amount to about $10,000 in additional costs for his business, which he said operated at a loss last year. His move is “not as calculated as people think,” Beemer told us, but it drew national media attention last week, fueled by angry Facebook posts. The move also defies the common retailing rules in which businesses do their best to hide price increases. On grocery shelves, for example, as the cost of ingredients grows, packages often shrink. In other market segments, however, we largely accept without blinking the layeringon of taxes and government fee after fee. They’re passed directly to consumers and detailed rigorously on everything from airline ticket receipts to the statements we receive from utilities, cable companies and trash-haulers. The scope — and the tone — of the outcry over a simple 35-cent fee is confounding. Even Gov. Mark Dayton piled on, calling the practice “tacky,” during a radio broadcast. Yet, the state has some relevant experience with “hiding” added costs. Lawmakers attempted to cover their tracks when MinnesotaCare — tax-subsidized health insurance for lowincome workers — was created with a 2 percent provider tax to help pay for it. The statute forbade providers from itemizing the tax on receipts to patients. “Politicians just didn’t want to be blamed for the tax,” University of St. Thomas economics professor John Spry told us. A court ruled that the state should not enforce that “do-not-tell” provision. For a tax that “will be passed along to the consuming public,” the 1993 ruling said, it is vital to the public interest “that there be full and accurate disclosure of the economic implications of the statute.” As a government official, your natural tendency is to say, “Here’s this shining object” I can provide for you, Spry said. “Don’t look at the cost.” Meanwhile, lawmakers’ decisions have consequences. When it comes to a minimumwage increase — not exactly a tax, but a state-mandated increase in operating expense nonetheless — “the consequence is that we’ll make adjustments,” said Dan McElroy, of Hospitality Minnesota, a coalition that includes the state’s restaurant, lodging and resort and campground associations. In a survey last year, 93 percent of those responding said they’d likely increase prices, according to McElroy. Establishments also are reducing working or operating hours or adjusting their “service style” to reduce labor costs. Margins in restaurants are “not anywhere near sufficient to absorb this increase, and particularly future increases,” McElroy said. Legislation last spring — delivered by DFLdominated state government — will move the state’s wage floor from $6.15 an hour to $9.50 — the second-highest in the nation — by 2016. Tip-credit proposals have been debated as a compromise. The approach would allow employers to pay tipped employees less than nontipped workers, as long as their total earnings reach a certain threshold, Woltman reported. Beemer has “felt passionately about this issue for a long time,” McElroy told us. “I certainly understand why he wanted to do it that way.” The Oasis Cafe is a small restaurant, he said. Beemer “knows a lot of his guests. This provokes a conversation that he or his wife can have” with them. “While our family is conservative in our views, it was never our intent to make some grand political statement about the minimum wage debate,” Craig and Deb Beemer wrote in a joint statement posted Friday on Facebook. “Our decision to offset the recent increase in minimum wage was what we believed to be the most honest and transparent way to communicate a significant increase in our operating cost.” There it is. We hope Gov. Dayton accepts the Beemers’ invitation to lunch at the Oasis to discuss the issue in person.
Posted on: Mon, 11 Aug 2014 16:19:29 +0000
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