Oasis Cafe, MN adds minimum wage ACA fees to customer tabs

Oasis Cafe, MN adds minimum wage ACA fees to customer tabs

Oasis Cafe, Stillwater, Minnesota, via Oasis' Facebook page.
Oasis Cafe, Stillwater, Minnesota, via Oasis' Facebook page.

STILLWATER, Minn., August 7, 2014 – Over the past several months, blue states and cities have been happily and heedlessly hiking the local minimum wage rates on companies large and small even as the spectre of Obamacare cost increases stalk businesses nationwide. Now the consequences are beginning to crop up, as a Stillwater, Minnesota restaurant is identifying—and tacking on—a “minimum wage fee” to each customer tab.

Minnesota CBS affiliates are reporting that the Oasis Café is now charging its customers an additional 35 cents per tab and identifying the fee prominently on a separate line.

READ ALSO: Minimum wage a poor weapon against poverty, employment required first

The likely reason, according to Business Insider? “Minnesota recently raised the minimum wage for tipped employees.”

Café owner Craig Beemer “said the fee is needed to offset the 75-cent wage hike that took effect Aug. 1. 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’ says Business Insider.

Predictably, mindless, knee jerk reactions from alleged customers have begun to pop up on the restaurant’s Facebook page. “’If you cannot afford to pay your employees, maybe you cannot afford to run a restaurant,” one man who identified himself as a former customer said,’” according to Business Insider, which also indicated that “numerous people called for a boycott.”

More than likely, however, such illogical tirades are the observations of the usual “numerous” leftist trolls who’ve never done business math and have no clue how our collapsing economic system is supposed to work or what it takes for a small business to remain in business. Any food service business that refuses to pass on its cost increases to customers will eventually have to close its doors.

“Most customers outside the cafe Wednesday” actually supported Beemer’s decision, according to the Minneapolis Star Tribune.

“’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.’”

[Below, right: An Oasis receipt with surcharge noted, via local news station WCCO. ]

Screen shot of Oasis Cafe minimum wage line item. (WCCO, numerous sources)
Screen shot of Oasis Cafe minimum wage line item. (WCCO, numerous sources)

Unthinking government hikes to the minimum wage are not the only irritant threatening the livelihoods of restaurants and restaurant workers. Florida’s WFTV Eyewitness News reports “several restaurants in central Florida now charge customers more to offset the costs of the Affordable Care Act,” better known in public parlance as the widely despised Obamacare.

Among the establishments imposing Obamacare fees, “Ten Gator’s Dockside restaurants in Lake County, Lakeland and the Jacksonville-area just tacked on a one-percent fee for customers…. Restaurant managers have posted signs alerting customers to the new surcharge,” reports WFTV.

READ ALSO: S&P report proves higher wages and taxes worsen income inequality

“We wanted to definitely be transparent that affordable healthcare is part of the cost of doing business,” said Sandra Clark, director of operations with Gator’s Dockside Group.
The owners said it will help pay the healthcare costs for their 500 full-time employees.

“Customers at the Clermont location had mixed reactions.
’I don’t agree with it,…” said customer Brian Earwood. “I don’t think it’s the right thing to do because, you know, you’re penalizing us. But at the same time you have to pay employees and take care of them as well and I totally understand that too,” said customer Mauri Carver.

“Clark said her company believes the one-percent surcharge is the best solution… [noting] the restaurant group expects to pay up to $500,000 a year for its employees’ healthcare.  She said the restaurant doesn’t expect to come close to recouping that the total amount it must pay for government healthcare.”

Back in Minnesota, Craig Beemer is getting company.

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

As deliberately clueless as the Facebook trolls, at least one math-challenged union official is also weighing in on restaurants’ defensive moves to stay in business. “’We believe that the industry is overreacting,’ Wade Luneburg of the MN State Council of UNITE HERE Unions told the Star Tribune 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,’” he told the paper.

At the Oasis Café, however, reality on the ground is proving to be somewhat different. “’Despite online boycott threats, business has actually increased so far this week,’ [the restaurant’s manager, Colin] Orcutt said, noting that simply jacking up prices without telling customers why would seem more “bankhanded” to him.

Interestingly, Orcutt, an industry veteran, actually supports minimum wage hikes for those restaurant owners who do not work for tips. It’s “’different,’” he says, “’for the cafe’s servers, who can make $25 to $30 in tips on top of $8 an hour in a weekend,’” he told the Strib.

Intriguingly, some consumer groups have begun to suggest that as a way of equalizing costs in locales where the minimum wage is being jacked up for all employees, restaurant patrons should consider trimming back those tips since their wages themselves are already being raised considerably above the sub-minimum wages they used to be paid due to their primary reliance upon tips for total income.

Anticipating the sentiment, even in true blue Los Angeles, California, “bakery and restaurant Republique has been adding a 3% health care charge and encouraging customers to take 3% off the tip if they are dissatisfied.”

These are the opening salvos in a wage-price battle that’s certain to get even more interesting in 2015.

(Hat tip to PowerLine for uncovering the Stillwater story.)

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Terry Ponick
Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Business and Entertainment Editor for Communities Digital News (CDN). A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17