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Minnesota cafe shows customers the cost of minimum wage hike, Internet gets mad

By   /   August 13, 2014  /   No Comments

By Eric Boehm | Watchdog.org

STILLWATER, Minn. — It’s a Monday afternoon and there are only a handful of people hanging around inside the Oasis Café in Stillwater.

There’s a waitress and a single cook, along with a guy in a back room washing dishes. Only a few of the retro-styled booths with their pale green cushions are being used, and there’s no one sitting in on the matching green stools that line the stainless steel wrap-around countertop taking up most of the space in the main dining room in the 1950s-style diner.

Doris Day is singing “Dream a Little Dream of Me,” on the radio overhead, though it is partially drowned out by the sizzling of hamburgers on the grill in the open-air kitchen behind the counter.

An older couple, probably retired, sits in one of the corner booths and chats with Tracy, the middle-aged waitress, about a mutual acquaintance in town. A man who has just finished eating and paid his bill gets up to leave. Tracy turns to him and says good-bye.

Watchdog.org photo / Eric Boehm

MID-DAY AT THE OASIS: The Oasis Cafe is about as nondescript as any other small diner in middle America – you’d drive right past it if you weren’t looking for it. But it’s been at the latest epicenter in the national political fight over the minimum wage.

“See you next time,” he replies, a regular in this little lunch spot in a small town along the La Croix River on the eastern edge of Minnesota.

As he’s leaving, another couple arrives and Tracy greets them by name. More regulars.

This small, nondescript diner with room for only 15 or so cars in the parking lot could be any local establishment in any town in the Midwest. But what makes the Oasis Café different is an extra 35-cent fee tacked onto each patron’s check.

Last week, a patron posted a photo of a receipt on Facebook and complained about the 35-cent “minimum wage fee” on the bill. The photo quickly went viral, shooting the Oasis Café straight into the center center of the national debate over the minimum wage.

Talking heads like MSNBC’s Joe Scarborough talked about it. The Today Show did a segment about the cafe’s new fee, and thousands have weighed in with comments on social media.

All that because the Oasis Café decided to add a small fee on to each bill, beginning on Aug. 1, in order to cover the added costs imposed by Minnesota’s new mandatory minimum wage, which took effect on the same day.

“It’s been a crazy week,” said Tracy, the waitress who declined to give her last name, when I asked about it.

Giving a raise, but at a cost

The state Legislature voted in May to raise the minimum wage to $8 per hour, with further increases planned in the next few years until the hourly minimum hits $9.50 in 2017.

The move won praise from progressives coast-to-coast, including the Obama White House, which is pushing for a $10.10 minimum wage at the federal level.

But the higher minimum wage means higher costs for many businesses in Minnesota, hitting small restaurants and other mom and pop shops particularly hard. Many likely will increase their prices a few cents to cover those costs. Some may lay off staff or avoid hiring new workers. In either case, there are consequences of a higher minimum wage, but they remain unseen.

At the Oasis Café, owner Craig Beemer decided to make the costs visible — right at the bottom of each customer’s check.

Watchdog.org photo / Eric Boehm

MINIMUM WAGE FEE: Higher costs are a given when the minimum wage goes up – but the Oasis diner doesn’t hide the extra costs inside the price of food, they put it right on the receipt.

Beemer told the St. Paul Pioneer Press that he intended to draw attention to the added costs, but he doesn’t see himself as a political activist even though the higher wage mandate will cost him $10,000 this year.

I’m not some (tea party) guy making a big stand,” he told the paper last week. “It’s been pretty shocking how this thing has blown up.

The extra fee was right there on the bottom of the check I paid on Monday afternoon, after eating a burger and a chocolate milkshake — seriously, this is the kind of place where you just have to have a burger and shake as soon as you walk in the door, and it was delicious.

“He’s just trying to teach people a lesson in market forces,” said Mike Hickey, state director of the Minnesota chapter of the National Federation of Independent Business, which represents small businesses and opposed the minimum-wage hike.

That lesson, in the form of an extra fraction of a dollar, has created a firestorm of controversy on the Internet, particularly among the very people who supported the higher wage, but apparently do not want to be forced to see the consequences of such policy.

Bluestem Prairie, a liberal political blog in the Land of 10,000 Lakes, was one of the first to pick up the story last week. It labeled the restaurant’s new fee “tacky.

On his national show, Scarborough said he understood how difficult running a small business like a restaurant can be, but then pivoted to criticize the Oasis Café’s new fee.

With the minimum wage as low, historically, as it is right now, you might not want to advertise your contempt for raising it, on the bill,” he said.

His co-host, Thomas Roberts, said he would rather see restaurants raise the price of food instead of putting the extra fee on the bill.

It seems like it’s a revenge tactic,” he said.

 

So, charging people an extra 35-cents for their food is OK, but charging people an extra 35-cent fee on top of their food charges is a revenge tactic and shows contempt for the minimum wage increase?

Many on social media had the same economically illiterate reaction.

“You couldn’t just increase your prices for two meals by 35 cents,” wrote one woman on the restaurant’s Facebook page. “Shame on you.”

“To be clear, I fully support a minimum wage increase and would not have objected to a slight change in menu prices to offset this cost,” wrote another. “But to do it this way is just a dick move on your part.”

After the photo of the receipt went viral and ended up on national talking-head programs, the restaurant received so many calls last week that they temporarily disconnected their phone.

Not just in Stillwater

On Monday, servers working at the Oasis Café said the calls have been mixed. Some supportive, some angry.

Few of them are from people in town, though.

DON'T BE MAD AT THEM: Angry about the minimum wage fee? Yell at the politicians who implemented the higher wage mandate, or take an economics class. Or just enjoy a delicious burger and shake

DON’T BE MAD AT THEM: Angry about the minimum wage fee? Yell at the politicians who implemented the higher wage mandate, or take an economics class. Or just enjoy a delicious burger and shake

“One woman called and I answered and she said she had to call and say something because she’d seen the story on Facebook. But she didn’t even know where Stillwater was, and she wasn’t even from Minnesota,” Tracy said, laughing a little.

Has this kind of online activism poisoned any chance of a rational debate over the costs and benefits of a higher minimum wage? Or is it a good thing to have so many people engaged on an issue that has been thrust front-and-center in the national political scene?

Probably a bit of both, but the angry messages directed at Beemer and his staff are clearly missing the mark.

Those angry about having to pay higher prices because of an increasing minimum wage should be upset at the politicians who forced those higher costs on business owners across Minnesota.

And when those higher costs are hidden inside the price of food, as many Facebook commenters seemed to think should have done, they are easy to ignore. But that doesn’t mean they don’t exist.

Anyone who thinks differently is either economically illiterate or politically motivated, said Hickey.

“So they’d rather he sneak it into the price of the corn or the green beans? It’s just baffling,” Hickey said. “It shows that people don’t know how a market economy works.”

The minimum-wage debate in this country has been hijacked by front groups leading politically charged protests and hashtag wars on social media.

In Stillwater, the Oasis Café has been the eye of the storm for the past week, but it will soon move on to another place where the outrage machine can be turned up to 11 against another business owner who is simply responding to the economic incentives created by the political powers-that-be.

But on this Monday in Stillwater, there are no actual protests. There are no people holding signs and chanting. There is no one screaming in all caps about the moral superiority of their point of view.

There’s the regulars sitting in their normal booths, chatting with familiar faces and munching on delicious hamburgers — and paying a little more to be able to do it.

And despite the reaction from national pundits and hashtag activists, business has been good at the Oasis.

Tracy said it’s been the busiest week since she started working there.

“Yeah, it’s been like free advertising,” chimes in a second waitress who has just started her shift in advance of the dinner rush.

“You know what they say. Any publicity is good publicity,” Tracy said. “It’s been good for business.”

Boehm can be reached at EBoehm@Watchdog.org and follow @EricBoehm87 and @WatchdogOrg on Twitter for more.

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Eric is a reporter for Watchdog.org and former bureau chief for Pennsylvania Independent. He lives in Minneapolis, Minnesota, where he enjoys great weather and low taxes while writing about state governments, pensions, labor issues and economic/civil liberty. Previously, he worked for more than three years in Harrisburg, Pennsylvania, covering Pennsylvania state politics and occasionally sneaking across the border to Delaware to buy six-packs of beer. He has also lived (in order of desirability) in Brussels, Belgium, Pennsburg, Pa., Fairfield, Conn., and Rochester, N.Y. His work has appeared in Reason Magazine, National Review Online, The Freeman Magazine, The Philadelphia Inquirer, The Washington Examiner and elsewhere. He received a bachelor's degree from Fairfield University in 2009, but he refuses to hang on his wall until his student loans are fully paid off sometime in the mid-2020s. When he steps away from the computer, he enjoys drinking craft beers in classy bars, cheering for an eclectic mix of favorite sports teams (mostly based in Philadelphia) and traveling to new places.