Question 1): Some of Michigan’s largest labor unions are calling on the Democratic-controlled Legislature to let stand a momentous (and controversial) state Supreme Court ruling in July that will eventually increase the minimum wage for all workers in the state’s hospitality industry, including those who receive tips, to some $15 an hour.
This past week, organized labor groups, including the Michigan AFL-CIO, the Michigan Education Association, and the American Federation of Teachers Michigan, sent a letter to House Speaker Joe Tate (D-Detroit) and Senate Majority Leader Winnie Brinks (D-Grand Rapids).
“We urge you to stand firm in support of these worker gains and reject any efforts to obstruct or undermine them,” the unions’ letter said. “The Legislature should let the court’s decision stand as it is, and continue to lead Michigan towards a future where workers and their families can thrive.”
Meanwhile, the high court, which botched some wording in its initial ruling, said in an amended order Wednesday that the state should move forward with plans to raise its minimum wage to nearly $15 an hour by 2028 but should delay a full phase out of the sub-minimum wage for tipped workers until 2030.
The court’s amended order was a response to a request last month by Attorney General Dana Nessel, on behalf of the Whitmer administration, for clarification by the court, which attempted to write law when it’s not equipped to do so. On Wednesday, Justice Elizabeth Welch acknowledged a “clerical” error in the court’s blockbuster July ruling, which requires the state to implement minimum wage and paid sick leave rules proposed in a voter-backed 2018 petition drive the court determined was unconstitutionally weakened by Republican lawmakers.
Because justices (or judges) are loathe to ever admit they’ve made mistakes, Welch contended that the court’s amendment “changes nothing of substance in the (original) opinion.”
However, Michigan’s small business industry — including restaurants, bar owners, and other aspects of hospitality — has argued since July that the new minimum wage, plus continued inflation, will result in not just more business closures and fewer jobs but an “existential” catastrophe.
The day before the high bench published its amended order, a few hundred people gathered on the Capitol lawn in support of retaining the tipped credit, with several servers arguing that the $15 minimum wage would be detrimental because it would increase the cost of food and push customers to avoid tipping.
Some Michigan Democratic lawmakers who have spoken publicly in support of a change to the tipped wage transition did not attend the Wednesday rally, following the release of the unions’ letter.
The unions have scoffed at the hospitality industry’s concerns, claiming that business owners are ‘crying wolf’ and that no such calamity will result from workers being mandated by the state to pay a ‘fair’ wage.
So, will the Democratic Legislature, which is joined at the hip with Big Labor, ignore this issue? Does this mean Republicans are the only ones worried about what might happen, and are their calls for legislative action justified?
Answer 1): Republicans obviously care about this issue far more than Democrats, and even though the Whitmer Administration may be worried about the ramifications of the initiative petition language and the Supreme Court’s verdict, majority Democrats in the Legislature will do nothing to address perceived economic problems stemming from the verdict. Why not? Because Democrats tend to believe that the doomsday scenario being depicted by the business community is exaggerated, if not bogus. Democrats view this as only a “temporary” problem, superseded by the need to bolster low-income workers’ wages to keep up with the cost of living. They view inflation as being caused by global supply chain interruptions. Democrats fault Donald Trump for failing to take the COVID-19 pandemic seriously early on, and also blame ‘corporate greed’ –- both of which they contend have significantly impacted small businesses.
Lost in all this are the thousands of wait staff who have been living on tips and find it nearly impossible to survive on just a higher minimum wage. The reaction of these employees to the new law ranges from ‘That’s a cut for me,’ to ‘The State and the unions are at war with small business.’ Fact is, the collectivist mindset behind the petition language is that sub-par waiters can’t live on the tip system, so once again state government must step in. This amounts to wage-and-price controls, which will lead to disadvantaging the best employees (who get the big tips) and making it harder for the employer to weed-out poor employees (which is a hidden cost to the owners). All this leads to higher costs (and prices) that make it less likely that the general public will be inclined to dine out, while already business remains way down in the restaurant/bar industry post-COVID. Plus, customers over the next half-dozen years are likely to decide that they just don’t need to tip anymore, or at least not tip as generously as they have been.
**************************************************
No big deal. Hookah bars and food trucks are the future in Michigan.
Several problems with this:
(A) numerous restaurants were closed due to the economic impacts of COVID-19 – more will close if they will have to pay workers higher wages as they cannot afford this further economic burden;
(B) I recently stopped into a restaurant where I noticed I am paying $16.00 for a Friday fish dinner that had cost me $10.00 pre-COVID-19 – this newfangled wage increase will drive up consumer costs even more;
(C) more layoffs will occur of restaurant employees due to the adverse cost impact to eateries
(D) I WILL NO LONGER TIP if a waitress or waiter receives a $15.00 per hour wage as my prior tipping behavior will be subsumed in the wage increase;
(E) at the Michigan Republican Convention in Flint last August I was paying $4.00 per hot dog and $6.00 per hamburger at the concession thanks to the prior generosity of the Dem-controlled state legislature – next time I shall pack a lunch.
AOC – a taco bar waitress – campaigned in 2018 on a $15.00 per hour minimum wage law – we are seeing the impact of her folly.
Nice article, Bill, and good to see you on Off The Record.
Well, reading about this now shows me why we have our newest state Supreme Court justice. In his dissent, Justice Zahra made the following statement, “THIS PAST JULY, A MAJORITY OF THIS COURT TOOK THE UNCHARTED PATH OF REVIVING INITIATIVE PETITIONS, ABROGATING UNAMBIGUOUS STATUTORY PROVISIONS, AND DRAFTING NEW STATUTORY LANGUAGE THAT THE MAJORITY DECLARED “EQUITABLE.” FOR THE FIRST TIME IN THE HISTORY OF THIS STATE, THE MICHIGAN SUPREME COURT REMOVED CLEAR AND UNAMBIGUOUS TEXT FROM STATUTES AND INVOKED JUDICIAL POWER TO REWRITE VAST PORTIONS OF THOSE STATUTES. IT DID SO IN AN EXTRAORDINARILY COMPLEX AREA OF LAW PERTAINING TO EMPLOYMENT RELATIONS AND TIPPED SERVICES, WITHOUT ANY OVERSIGHT OR VOTE OF APPROVAL FROM THE ELECTED LEGISLATURE OR THE VOTERS THEMSELVES. CITING BROWN V BD OF ED OF TOPEKA, 349 US 294 (1955), AS ITS PRIMARY SUPPORT, A TOTALLY INAPPLICABLE CASE FROM THE JIM CROW ERA, A MAJORITY OF THIS COURT CHARGED FORWARD WITH A GROSSLY INFLATED VIEW OF ITS OWN POWERS AND ABILITIES. AS A RESULT, THE COURT USURPED LEGISLATIVE POWER IT HAD NO CONSTITUTIONAL AUTHORITY TO WIELD AND, AS EXPLAINED IN THE DISSENTING OPINION, ENACTED INTO THE EMPLOYMENT-LAW STATUTES OF THE STATE “AN INTERNALLY INCONSISTENT AND DEEPLY CONFUSING FORMULA TO SET THE RATES OF WAGES AND TIPPED-LABOR DISTINCTIONS GOING FORWARD IN THIS STATE FOR YEARS.”: If they are going to be essentially legislating from the bench, it might help to have a state legislator on the bench. Too bad there was ‘clerical’ error. Apparently Justice Welch’s clerks lack the skills of a legislator’s clerk. Or they did not read the decision clearly. I will leave up to others to decide which of the last two points is true.
As to any attempt for legislative change, I doubt we will see any kind of “fix” in lame duck. It’s easier to leave it to (and blame) the state Supreme Court. Some restaurants and bars will close, though fast food places and the very high-end restaurants will still survive. I hope that my favorite coney islands make it, but I am not so sure.
Maybe there should have been a vote on the issue. Too bad turning it over to the people did not occur to the majority of the Court.
Bulletin Board material. Thank you.
Great Piece Bill
Typical price increases are
25% Since Covid !All the Restaurants got big time Covid handouts ! Workers got increased tips because the Bills went up ! I think there wages should be 25% less as far as min wage than other Laborers acounting for their tips! That’s fair .So you see I’m
Not an over the top Lib!
A couple more relevant FACTS.
13,000 people were killed in alcohol related traffic accidents last year in the US. Michigan accounts for 500 on average per year.
Beer & wine tax has NOT been raised in Michigan since 1967
Gov Whitmer has conducted State business in Dagwoods Bar in Lansing.
Plymouth Bars are thriving and another Bar in Old Village-Plymouth, opened this week called Red Ryder after the BB gun that was manufactured in Plymouth over 75 years ago
Daisy Rifle moved out of Plymouth in 1958.
Plymouth has lost numerous restaurants along Ann Arbor Rd. the last 10 years – remember Zax steakhouse?
Remember Station 885, and of course 336 Main, and the Sardine Room and Daly’s.
Plymouth Pub is still around – I think?
The only one I can think of that is still around is Bode’s – founded in 1959.
Plymouth Pub is still there. Station 885 is gone but it was bought out by Stella’s and then closed. Methinks COVID did it in
As for Daly’s, the Rite Aid that replaced it has closed.
Plymouth ROC has closed (old Holly’s By Golly), but I suspect they too never recovered from COVID.
Never been to Dagwood’s in Lansing, but I have been to Kelly’s Downtown. Nice place for lunch or a drink.
Bode’s is still there, Stella’s is still near the old post office (now a Westborn Market), and EG Nicks as well.
I may have to try the new bar.
Should have mentioned some of the Lansing bars.
Kelly’s Irish Pub was a favorite hangout of Michigan government officials.
Omar’s is one of the oldest existing bars in Lansing and another favorite of many government employees. Bunsky’s was around during the 1980s on Capitol Ave. – just a block or two from the State Capitol Bldg.
All I remember about Omar’s is that during secondary bargaining between UAW Local 6000 and the Department of Education at the School for the Blind in the late 1980s, management negotiators led by Walt Conyers went there for dinner during a break. On Good Friday. He came back around 10 pm and said we were at impasse. I think it is near the new convention center and Lugnuts ballpark. I’ll still take Kelly’s.
IF THE TIPPED MINIMUM WAGE IS ABOLISHED, MICHIGAN WILL HAVE NO BARS AND RESTAURANTS!
I’VE BEEN TO ALASKA, CALIFORNIA, MINNESOTA, MONTANA, NEVADA, OREGON, AND WASHINGTON. I had an awful time in those places because they have NO BARS AND RESTAURANTS because they all banned the tipped wage!!!1.
Leanne and Tim Sullivan you are invited to 1142 S Main, Plymouth. My wife calls my Law Office of 39years My Michigan Museum
And the Democratic Party ,excuse Me ,the former Democratic Party , at one time , claimed it was supportive of small business and the Middle Class. No longer ! Elitist Progressive leadership ,represented by Presidential candidate Harris, A.O.C. and others ,wield the power .
Hi Bill, interesting question and I noted it was brought up on OTR as well (dapper appearance on your part). 😉
So, are bars and restaurants doomed . . . I’m assuming you mean even more so than they were due to Covid. Unlike the MSM which tries like heck to blame Trump for the Covid closures, I blame the Blue state lockdowns Blue state governors imposed seemingly in an attempt to hurt Trump. Vengeance lockdowns/mandates which may have caused untold deaths in my book. But that’s a different story.
So, what is a tip? I’d like to define it as a free will contribution to a hired server to encourage good service, and in some cases, information. My emphasis is on “free will”.
When I was young and growing up, I was introduced to the custom of rounding up to the nearest whole dollar so as not to have to fumble with coins. My younger adult hood was familiar with buying a 12 oz brew for $1 and giving $2 to the waitress including a tip. That’s a 100% tip. For small purchases, or maybe a $3.50 breakfast, 50 – 100% tips were common. But at the same time, at least in the circles my parents frequented, a 10% tip for a family meal was pretty standard. After all, a meal could mean a significant chunk of the family budget. I know, even then, the affluent and political class were giving larger tips . . . but then again . . . that was for them, not for the Untermensch.
So, since then, it took a boss to inform me that if I wanted to represent the company properly, I was going to have to up my tipping game. He wasn’t going to accept a tip less than 20% and expected more if I was entertaining clients. Never mind that applying that kind of tip was forcing me to exceed our $15 daily meal allowance. That particular boss assured me he would always accept my expense reports, but subsequent bosses didn’t see it that way and I was forced to pay for many a partial meal that exceeded my limit, tip or no tip. The same scenario occurred even when daily meal limits increased; after all, food prices increased as well.
So, just before Covid, some restaurants got smart and began their own form of pressuring patrons for tips by taking the ability to privately set customer’s own tip amount. We had to declare our tip by voice and the point-of-sale (POS) clerk would make sure they would announce our tip loudly if it wasn’t where they wanted. I got kinda good at announcing a $1 tip once they began announcing tips aloud.
Of course, around Covid time, POS machines have begun providing patrons multiple choices for tips beginning at 20% and sometimes going to 50% or more.
I write all this because this evolution of the tipping process seems to me a progression to dictating to Moi what kind of tip I’m supposed to give for some kind of assumed etiquette. Actually, I wonder if it’s a true etiquette, or just satisfying some scroog-ish establishment owners. Kinda defeats the whole “free will” concept, doesn’t it? And I think the revolt from the tipping process has begun before the effort to kill tips in general by imposing minimum wage laws. I’ve personally seen several receipts lying out on the POS counter indicating, “NO TIP” on previous patron’s receipts at several establishments. I facetiously expect that surviving establishments will expect both . . . tipping plus minimum wage. Declaring that their wait staff just can’t make do without the extra remuneration.
Of course, observing post Covid that we hardly ever see a truly full restaurant anymore, even though Google maps say they are “extremely busy” at about ¾ full. It doesn’t take very many unpleasant experiences in this narcissistic world to encourage us to just avoid the experience altogether.
Doomed? I thought that happened with Covid . . . BTW I appreciated the verbal bar walk provided by the other TBRers. I think I got a few establishments I’m gonna need to hit. 🙂
What was your question again, Bill? Love TBR!