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Restaurants say minimum wage increases too much

Restaurants say minimum wage increases too much

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HELENA - Business owners said Wednesday they are suffering following several increases in the state minimum wage - and want the Legislature to undo parts of a 2006 ballot initiative that voters approved overwhelmingly.

Critics said the effort would undermine the will of the voters, and unfairly penalize the lowest paid people in Montana.

Under one plan, a server's tip income would count toward part of the minimum wage. The plan would essentially freeze the minimum wage at $6.90 for tipped employees, and tips would count toward any future minimum-wage hikes.

Another proposal would remove the state's automatic inflationary increases in the minimum wage.

The state minimum wage is scheduled to rise again in July to $7.25 due to an increase in the federal minimum wage, and possibly to about $7.50 in 2010 when another state inflationary increase kicks in.

Both bills are sponsored by Republican Sen. Donald Steinbeisser of Sidney and were pitched Wednesday to the Senate Business, Labor and Economic Affairs Committee.

Opponents, including restaurant servers, said it is not fair to have their tips count toward the base wage. They argued it also is unfair to restaurant customers who think tips are to acknowledge a job well done - not to subsidize the minimum wage.

Helena waitress Rachel Conn said it's foolish to think servers are paid a lot. She said she makes about $1,100 a month and barely makes ends meet.

"I think it's unfair to say that most waitresses make 25 to 30 dollars an hour," Conn said. "Because that is not the case for most of us."

The administration of Gov. Brian Schweitzer also opposed the bills, saying voters knew exactly what they were doing when they approved Initiative 151 by better than a 2-1 margin in 2006.

"The administration is opposed to this basically on the grounds of fundamental fairness," said Labor Commissioner Keith Kelly.

Restaurant owners said that I-151, coupled with subsequent increases in the federal minimum wage, have boosted their labor costs by 40 percent. The recession has worsened matters, and forced some to close down or reduce their work force, they said.

The Montana Restaurant Association said capping pay at $6.90 for tipped employees would help.

"It would provide some stability for our rapidly increasing wages in Montana," said lobbyist Brad Griffin.

Steinbeisser said his other bill is needed because voters didn't understand they were passing an automatic inflation increase tied to the Consumer Price Index.

"A lot of the voters on I-151 didn't know what the CPI index was," he said.

The bills are Senate Bills 253 and 254.

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