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Old 08-06-2014, 07:21 PM  
displacedinMN displacedinMN is offline
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Stillwater, mn cafe faces heat for adding 'minimum wage fee'

http://www.startribune.com/politics/...270235821.html

A small cafe in Stillwater has thrown itself into the big battle over Minnesota’s minimum wage increases, inundating the cafe with dozens of phone calls and online comments this week after it tacked on a 35-cent fee to meal tabs.

Oasis Cafe owner Craig Beemer said the fee is needed to offset the 75-cent wage hike that took effect Aug. 1, the first time Minnesota’s minimum wage has increased in a decade. Even with only half a dozen servers, Beemer says it will cost him $10,000 more a year to pay servers $8 an hour instead of the federal rate of $7.25 an hour. Instead of adding it on to food prices, he added the minimum wage fee” — the only restaurant known to do so in Minnesota so far.

It’s set off a firestorm of debate on Facebook and in the east metro community, with one customer calling the cafe Wednesday to demand a refund and others taking to Facebook to encourage people to boycott the roadside cafe.

“We’re shocked at what’s going on,” manager Colin Orcutt said of the public response. “We’re all appalled at the response for just protecting his employees. We’re just doing what we have to do.”

It’s not the only restaurant responding to the wage hike.

Blue Plate Co., which owns eight restaurants in the Twin Cities and has about 650 workers, says the mandatory wage increase and rising expenses due to the health care law will cost the company $1.25 million, prompting the company to slightly increase prices and add a fee to servers when a credit card is used to pay a tip.

“We believe that the industry is overreacting,” Wade Luneberg of the MN State Council of UNITE HERE Unions told Star Tribune columnist Jon Tevlin this week. “Putting [minimum wage] fees on tickets and passing the cost on to consumers directly is strange at best, and creates an ‘us against them’ mentality while ordering dinner.”

At the Stillwater cafe, which sits at the edge of the downtown and near its historic caves, customers filed in Wednesday for the cafe’s signature burgers or breakfast meals. Despite online boycott threats, business has actually increased so far this week, Orcutt said.

“[Beemer] wants people to be aware we’re a small business and we’re trying to stay open,” he said, adding that the cafe considered running the restaurant without servers and more like a fast-food restaurant to make ends meet. “If you raise prices and don’t tell anyone, that seems more backhanded to me.”

Orcutt has worked in the industry for 10 years and said that he supports a wage hike for employees who don’t make tips, such as fast-food servers. But, he said, it’s different for the cafe’s servers who can make $25 to $40 in tips on top of $8 an hour in a weekend.

Earlier this year, that’s what the Minnesota Restaurant Association proposed, creating a two-tiered system that would give non-tipped employees that higher wage, while tipped employees who earned at least $12 an hour with tips remained at $7.25 an hour. But the Legislature approved the hike for all minimum-wage employees.

Beemer, who lives across the border in Wisconsin and has owned Oasis Cafe the past five years, wasn’t available for comment Wednesday. But Orcutt said Beemer wrote a letter to the Legislature opposing the new law.

Most customers outside the cafe Wednesday supported his decision.

“I think he did the right thing,” said customer Mike Stephan of Taylors Falls, who also owns a small business in Stillwater. “If nothing else, it’s making a bold statement.”
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Old 08-07-2014, 12:32 PM   #16
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Please, show us?
You can't really do the math because he doesn't say how many hours a week the employees work.

Unless I missed it.
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Old 08-07-2014, 12:43 PM   #17
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I guess the "math" thing would be he's charging each table 35 cents to cover wage increases while most servers can and do handle 4 or more tables per hour...therefore a profit increase for himself...?
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Old 08-07-2014, 12:56 PM   #18
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Originally Posted by blaise View Post
You can't really do the math because he doesn't say how many hours a week the employees work.

Unless I missed it.
$.75 * 40 * 6 * 52 = $9360/yr

There are a lot of assumptions in the algorithm (e.g. all six employees work full time, 52 weeks a year).

If the assumptions are accurate, we then have to assume 26,743 tables (assuming 1:1 table:tab) will have to be served w/ the $.35 "fee" to offset the additional cost. That's an average of 73 tabs per day....would be a busy cafe!
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Old 08-07-2014, 01:10 PM   #19
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So basically the mistake he made was calling it "Minimum Wage fee" instead of simply upping his prices like everyone else.

He tried to show everyone how unhappy he is with the rate change and now its blowing up in his face.

He also sounds like a horrible person to work for.
Yup. This dummy is simply using his business to voice his political views.
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Old 08-07-2014, 04:01 PM   #20
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Everyone does realize that his math is completely incorrect and he's just ****ing his customers. You all did the math right?
They do math that makes Republicans feel better.
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Old 08-07-2014, 04:15 PM   #21
Loneiguana Loneiguana is offline
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Originally Posted by WhiteWhale View Post
The costs of running a business has no impact on that business's ability to prosper. It's all supply and demand. There are no other factors involved.

Really smart people on CP told me this.
This amount of derp saddens me coming from you.

A item cost x because that's what enough people are willing to pay for it. AKA what "the market will bear". Raising prices doesn't make more money to cover increased costs, it makes less money because decreases the amount sold of x.

If this company could have sold the same amount of x with this "fee", they would have done it already. Companies don't wait for a minimum wage increase to make more profit.

The free hand of the market will slap this company around.
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Old 08-07-2014, 04:47 PM   #22
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Duhh, minimum wage gets raised and stores have to raise prices to pay their minimum wage workers more....

Who is honestly surprised by this?

Next you will be telling me your shocked when landlords raise all the rents.........

ANd prices of other things go up

No one has ever heard of inflation? If you suddenly give a mandatory 15%-20% raise to a pretty big chunk of workers, there is going to be some inflation ....
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Old 08-07-2014, 05:25 PM   #23
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Quote:
Originally Posted by Loneiguana View Post
This amount of derp saddens me coming from you.
I'm sure you're not.

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Originally Posted by Loneiguana View Post
A item cost x because that's what enough people are willing to pay for it. AKA what "the market will bear". Raising prices doesn't make more money to cover increased costs, it makes less money because decreases the amount sold of x.
Good job. Now imagine COSTS going up, but knowing the market can't bare a price increase. I'm literally talking about the simple fact that overhead increases costs. When costs increase and the market does not move, businesses have to take action to get their profit margins in line or everyone they employ loses a job.

Are you going to tell me, for example, that shipping costs have not caused prices of various items to increase?

Overhead, or the cost of doing business, matters.

Quote:
Originally Posted by Loneiguana View Post
If this company could have sold the same amount of x with this "fee", they would have done it already. Companies don't wait for a minimum wage increase to make more profit.
Tell me all about what businesses do. As a successful business owner I'm intrigued by your vast knowledge in this field you have no experience in. They don't wait for anything. Many small businesses over the past 10 years have been hammered with higher shipping/fuel costs damaging their bottom line. Taxation also damages the bottom line. Higher income taxes and higher wages means higher payroll tax (do you know what payroll taxes are?) and that impacts overhead.

Things that eat into your bottom line don't FORCE you to raise prices. They force your business to operate with less money, raise prices, or cut corners elsewhere.

It's simple.. overhead, or the cost of doing business, is a factor in businesses being available to have jobs in the first place.

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Originally Posted by Loneiguana View Post
The free hand of the market will slap this company around.
You can't talk about free hands when you're trying to force something on the market.
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Old 08-08-2014, 06:05 AM   #24
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Originally Posted by Loneiguana View Post
They do math that makes Republicans feel better.
Go ahead and do the math for us then, sport.
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Old 08-08-2014, 07:47 AM   #25
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Originally Posted by Loneiguana View Post
This amount of derp saddens me coming from you.

A item cost x because that's what enough people are willing to pay for it. AKA what "the market will bear". Raising prices doesn't make more money to cover increased costs, it makes less money because decreases the amount sold of x.

If this company could have sold the same amount of x with this "fee", they would have done it already. Companies don't wait for a minimum wage increase to make more profit.

The free hand of the market will slap this company around.
The amount of derp in this post doesn't surprise anyone.
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Old 08-08-2014, 08:00 AM   #26
Loneiguana Loneiguana is offline
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Originally Posted by WhiteWhale View Post
I'm sure you're not.

Good job. Now imagine COSTS going up, but knowing the market can't bare a price increase. I'm literally talking about the simple fact that overhead increases costs. When costs increase and the market does not move, businesses have to take action to get their profit margins in line or everyone they employ loses a job.
Did you just conclude that a minimum wage increase will cause businesses to run into the red and go out of business?

Since you claim to be a successful business owner, you should know that there are a lot of different ways to save money and earn money that is not raising prices. Decrease turnover, increase performance standards of employees. Expand Job duties. Discourage overtime. Review other costs for savings. ect.

Plus, you are not even looking at the demand side of the equation, the most important by the way, that says there will be an increase in demand for goods and services from the minimum wage increase. Which means more sales... if you don't increase your prices over your competition.

Quote:
Originally Posted by WhiteWhale View Post
Are you going to tell me, for example, that shipping costs have not caused prices of various items to increase?

Overhead, or the cost of doing business, matters.
And the answer isn't raising prices because raising prices decreases your sales while giving your competition, (who also had a wage increase) that did not raise prices, your customers.

In a competitive, free market, the last thing you do is raise prices because it immediately gives your competition an advantage and your customers.

Quote:
Originally Posted by WhiteWhale View Post
Tell me all about what businesses do. As a successful business owner I'm intrigued by your vast knowledge in this field you have no experience in. They don't wait for anything. Many small businesses over the past 10 years have been hammered with higher shipping/fuel costs damaging their bottom line. Taxation also damages the bottom line. Higher income taxes and higher wages means higher payroll tax (do you know what payroll taxes are?) and that impacts overhead.
I can easily tell you that if a company could sell the same number of x at a higher price at the same volume, they would do that. They don't, because it would mean less of x sold. Less of x sold means less profit. And then it doesn't matter what their overhead is.


Quote:
Originally Posted by WhiteWhale View Post
Things that eat into your bottom line don't FORCE you to raise prices. They force your business to operate with less money, raise prices, or cut corners elsewhere.

It's simple.. overhead, or the cost of doing business, is a factor in businesses being available to have jobs in the first place.

Only bad or lazy business owners feel they are "forced" to raise prices because of minimum wage increase when there are multiple other steps to decrease overhead that can be taken.

Quote:
Originally Posted by WhiteWhale View Post
You can't talk about free hands when you're trying to force something on the market.
A wage floor is not forcing anything onto the market. It is ensuring society is not paying for your labor through the social safety net.

If a company cannot pay a living wage and make a profit, the company is unsustainable and will require government assistance, either to the company or the employee. Currently, the government assistance goes mainly to the employee.
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Old 08-08-2014, 08:02 AM   #27
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Old 08-08-2014, 08:16 AM   #28
Loneiguana Loneiguana is offline
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Originally Posted by Brainiac View Post
The amount of derp in this post doesn't surprise anyone.


Sure, correctly pointing out what companies charge for x is the optimal price for the most amount of sales is derp.

And pointing out that an increase in price decreases sales is derp.

Maybe for idiots like yourself.
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Old 08-08-2014, 08:33 AM   #29
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Originally Posted by displacedinMN View Post
http://www.startribune.com/politics/...270235821.html

"We believe that the industry is overreacting,” Wade Luneberg of the MN State Council of UNITE HERE Unions told Star Tribune columnist Jon Tevlin this week. “Putting [minimum wage] fees on tickets and passing the cost on to consumers directly is strange at best, and creates an ‘us against them’ mentality while ordering dinner.”
Really? Passing the cost on to consumers is "strange at best"?

This kind of thinking is mind boggling to me. Do Dems seriously think they can legislate business owners to decrease their profit margin with laws like this? Of course they will pass the cost on. It's like a total disconnect with reality.

Obviously this guy is doing it in a way that broadcasts his politics, and if it blows up in his face his his own fault. But that's the only story here.
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Old 08-08-2014, 08:36 AM   #30
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Really? Passing the cost on to consumers is "strange at best"?

This kind of thinking is mind boggling to me. Do Dems seriously think they can legislate business owners to decrease their profit margin with laws like this? Of course they will pass the cost on. It's like a total disconnect with reality.

Obviously this guy is doing it in a way that broadcasts his politics, and if it blows up in his face his his own fault. But that's the only story here.
Do Republicans seriously believe that companies can just willy nilly raise prices and decrease demand for their product, therefore decreasing profit margin. It's a total disconnect with reality.
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