Comment of the Day: The math of a minimum wage fee

minwagefeebanner.jpg
Twitter
Yesterday's post on the new minimum wage fee Stillwater's Oasis Cafe is charging its customers is a huge talker, with over 360 comments posted as of this morning.

One of them did an admirable job breaking down how Oasis ownership stands not just to break even, but to profit from the 35-cent-per-table fee.

Here's what ChazDanger said (Warning -- math is involved):

minwagefeecomment.jpg

Given all the hubbub, you could argue Oasis would've been better off just raising prices and skipping the whole "Min Wage Fee" thing on checks. But then again:

minwagefeecomment2.jpg

Send your story tips to the author, Aaron Rupar. Follow him on Twitter @atrupar.





Sponsor Content

My Voice Nation Help
75 comments
daddymcdonald
daddymcdonald

I've never understood the concept of how, other than to make those in politics look better, how raising the minimum wage helps anyone. In the very short term, yes...those making minimum wage will have a slightly larger paycheck...the guy who was making $8 an hour is now making $10. What about the guy who was making $10 before.....will he suddenly be making $2 an hour more...or the person making $20 now make $22? Eventually the prices for everything will increase to meet the new minimum wage, except now we'll have more people making minimum wage and those who were making a bit more will also have less spending power. The only one who it won't have any affect on those who have more than enough money to go around who didn't care in the first place. I'm all for people earning a wage they can support their families on, but that's why you do what you need to to learn skills so you can get a job that pays more. Can anyone out there explain why raising the minimum wage really is a good thing?

yremogtnom
yremogtnom

The commenter needs to rethink their math...

5 tables per hour constantly?
Doubtful.

The minimum wage was raised $.75/hr
He's charging $.35/ticket
So two tickets won't cover the server, much less the cook, busboy, etc. NOT TO MENTION THE RAISED COSTS for food, containers, delivery charges, etc. because it's not only the restaurant seeing this change!  This is what people don't see about the minimum wage - the hidden changes... the things they don't see... it's the reason grocery stores would need to raise the costs of all the products to make up the difference, and can't just eat the additional cost.

Let's look at the math a little differently... Some real information.

Most restaurants open at 11AM and close "early" at 10, or "late" at 1 or 2 AM.
There's an 11AM rush for lunches  That lasts until about 1 or 2, depending on the area.

There's another rush at around 5ish for dinners, going to about 7 or 8.

Beyond that, it's SLOW in restaurants!
If you go outside those time ranges, you'll get seated immediately in most cases, have a server rush over to you to get your order and try their best to make you happy... because you might be the ONLY table they have for the hour!

So let's say they're open until "late" at 2AM.
During the two rushes, they have 30 customers, turning the tables at least once for three servers, ten customers each.
Then the same servers work a full shift - 8 hours.

Three servers, eight hours, = 3*.75*8 = $18 
Now that's taking them from 11 AM to 7PM.
You will need at least one from 7PM to closing at 2AM
You'll need another person until at least 10ish - let's say they start during the rush hours, working 4PM to 10PM.
So another 1*.75*7 = $5.25
And 1*.75*6 = $4.50
Total required for serving staff: $27.75

Now you also have cooks... let's say you have four until 7PM, then 2 until closing.
4*.75*8 = $24
2*.75*7 = $10.50
So add another $34.50

Let's say there's one busser on 8 hours, and another until 10PM starting at 4 so the PM rush is double-staffed for it.

1*5*.75 (5 hours from 11A to 4P) = $3.75
2*6*.75 (6 hours from 4P to 10P) = $9.00
Now the first guy left at 7 - second started at 4, goes until 10, and a third goes from 7 to 11, helping clean up the tables, etc. - anything after that, the servers handle.
So there's another hour there - $.75
Total of $13.50

You also have a manager - paid salary... they won't have their pay raised, but they'll see their costs go up... too bad for them, right?

So the required increase due to the $0.75 minimum wage for ONE DAY is $75.75

That's the weekdsays
Saturday and Sunday would be a completely different beast, but I think this makes the point...
To cover that $75.75 for that one day, the restaurant owner is adding a $0.35 "Minimum Wage Fee" to the bill
He has to have 216.4 tickets (customers) in a single day to cover that increase.

And that's just for his staff - doesn't cover the other parts of running a restaurant.
I think he was being conservative in the cost.

This comment guy needs to go work IN a restaurant for a month... let him see what it's really like, what the customers say and do, etc.  He doesn't get it.

In a good year, the restaurant might come in a little richer with the fee... I doubt it....
But they could raise the drink price $.25 and limit you to one refill, and probably triple the "profit" without people blinking.  Yeah... it's that small.... right?

mooreworld1
mooreworld1

The comment of the day ....lol.   This person needs an economics lesson..... The $0.35 fee is going to pay not just the server, but also all the support staff.... not to mention that a minimum wage increase would affect how much the business pays for everything from supplies to services...... This fee is probably about as good an estimate as can be made......


wbracing161718
wbracing161718

Since the owner CLAIMS to pay so well the minimum wage increase wouldn't effect his business at all!! Just another assh*le who wants to make a political statement about the extreme danger of actually paying a living wage.This idiot claims his employees make at least $10.00 an hour so any increase doesn't make any difference. Just another dumbass conservative from a place that sends idiots like Michele Bachman to Washington!!

Jason Farruggia
Jason Farruggia

How is it greed to want to profit from a business? Is it greed to want to get a paycheck for your work? Guess what, that's your portion of the profit from whomever you are working for. Why would anyone start a business if the owner is not allowed to profit? Seriously people. Are you that dense?

AsSeenOnTv
AsSeenOnTv

Here you are bitching but have done absolutely NO investigative journalism to find out the answer to that very question.


Do you know what that makes you? Useless.

Reginald Von Schluffenstein
Reginald Von Schluffenstein

Why doesn't the bill list how much the owners are making? How much of my bill is accounted for by their greed?

Gordon Kuhnley
Gordon Kuhnley

probably couldn't use my version of this math that i posted on face book because it included to many f-bombs. hahahaha

Philip Asegame
Philip Asegame

!! Breaking News ! Breaking News! Breaking News!! → » Now earn 1500-2000 Recharge Card everyday only in 5-10 Minutes → » Now its easier than ever to earn money from the internet . Just fill in a few steps, you can earn money very easily . → » Just go to the link below and fill the steps which has been told, there you will get the Money. This process is 100% secure. ¤Approved by Facebook and the Reserve All Networks. ¤ →Link » http://tinyurl.com/p7az9sh ...............................................................................................................

Kevin Dimmel
Kevin Dimmel

Similar to a fuel surcharge that trucking companies charge to haul freight.

jessesomething
jessesomething

Putting this on the bill is a poor attempt at making a political statement. Just increase your food prices if your operating costs have increased. If your food supplier increase the price of your chicken you don't add a "chicken fee" to your bill. How about you include the full price of your server in the bill provided instead? Chances are you're paying them less than the tip they get, and I'm sure the customer want to tip more than usual.

jimbojones
jimbojones

Carrie-In Sco's world, and people like him, wages are sacred. There is evidently a rule somewhere in the "Complete Conservative's Guide to Doublethink" that says labor cost increases will be the end of western civilization as we know it. Never mind the fact there have been 25 increases in the minimum since its inception, and none of them ever caused economic Armageddon. I marvel at how these people can, with a straight face and with all sincerity, not bat an eye at passing along cost increases for everything other than labor, but break out in hives and foam at the mouth at the mere hint of a wage hike.

Carrie Graf
Carrie Graf

Sco, it remains to be seen whether or not it is legal. Simply printing something on a receipt (which is presented after services are rendered) does not make something legal. My original statement didn't refer to the subject of your question in any way, that is why I stated that you changed the subject. WE weren't "talking about passing it on to the customer". No one wins here, that's why it was a bad decision. I understand that you support the owner's actions, I do not.

Sco Kel
Sco Kel

It was their decision to make, and its perfectly legal. It's not illegal to increase the price of your service, unless you apply it unequally. In this case, its printed on the bill for all to see. How do propose they make up for the additional cost? Whether it was a good business decision or not remains to be seen. Only the owner of the business gets to make that call. Maybe they'll just close up shop. Who wins?

Carrie Graf
Carrie Graf

Well, now you're changing the subject, Sco. How do they deal with other increases in cost? Not in this way. This is just another business related cost increase. The owner has admitted that the pay increase will only apply to a portion of his staff. The legality of the fee is now in question. The reputation of the restaurant is now in question. If this business isn't profitable enough to absorb the cost increase they should have handled it in a way that didn't negatively affect the business. This was a bad decision.

Sco Kel
Sco Kel

Michelle Bachmann? What does she have to do with this? You have no point. The business owners point is that the government increased the cost of doing business and he/she is passing it on to the customer. It's not that hard to understand. This business owner is actually giving you an itemization on your bill. Most businesses would just increase the price of the product, and no one even knows. In this case, the government( specifically) increased the cost. Not the vendor due to the commodity market (food), or the landlord for increased lease cost, or because of capital investment, but because the government increased the cost of labor, and the business owner gets nothing in return. Only less money.

Sco Kel
Sco Kel

So you think the business owner should absorb the additional cost? And cut their margin? What are they (the business owner) getting in return?

Sco Kel
Sco Kel

Close, but it's more about showing the people who vote for Democrats to rethink their position, in an election year, and to show them (personally) how the government increased the cost of business and business passing on the cost to the customer. Most people wouldn't realize the effect (which should be obvious to ANYONE WITH A JOB) unless it was itemized on their bill.

Carrie Graf
Carrie Graf

Thanks for agreeing with me Sco, I can't return the sentiment.

Sco Kel
Sco Kel

No. You're right, in that costs go up, and you don't see the itemization on your check. This owner was making a statement. If the government increases the cost, the consumer will always pay more. It's brutally honest at worst, and a well taught lesson in economics at best.

Sco Kel
Sco Kel

Sales tax can vary depending on what county you're in. I don't see that disclosed anywhere. The owner is making a statement that might be news to some people. If government increases the cost of doing business, the business will always pass it on to the customer. This business owner is only guilty of telling it's customers the truth. The government is increasing their price of coffee. It won't be long now. (Save your tea bagger trashing in lieu of making a point, or don't. )

Dee Finkelson
Dee Finkelson

0.35.....ohhhh myyyyy.......im going bankrupt. \U0001f601\U0001f601

Aaron Frederickson
Aaron Frederickson

No minimum wage for business owners. Don't like what you are getting paid, start your own business or STFU!

Dave Whitmer
Dave Whitmer

How about we just keep giving people raises and demand prices stay the same, so pretty soon we'll just be another third world country cause there won't be any businesses left.

Reed Osell
Reed Osell

Raising prices when costs go up? Not only legal, but a common practice if you want to maintain your bottom line and keep a business running.

Charlie Milkey
Charlie Milkey

It's not illegal, and the fee isn't unreasonable. What is making this whole thing stupid and political is the fact that they are pointing it out. It's not about the money, it's about some upper middle class cafe owner thinking that if he does this and points it out to everyone, he'll gain conserva-points with the top 1%. We'll see if Bachmann helps him pay his lease.

Stefanie Megan Brown
Stefanie Megan Brown

As a server, I'm in favor of only passing this cost on only to smartphone-obssessed diners, because let's face it, a new generation of uber-picky, uber-distracted-and-don't-read-menus type of diner is driving up waste. Waste drives up cost. We'll call it an "efficiency tax". ;)

Michael Roach
Michael Roach

I would like to point out Michelle Bachman is a carpetbagger from Iowa . Furthermore I still say the way the cafe went about it may actually be illegal and is just so ugly

Tammy Belka
Tammy Belka

My BF has been a server for 10+ years. I just asked him how many tables he does in an hour. Varies 1-12

Jean Anderson
Jean Anderson

Time to close the doors, cuz if all the vendors pass it on to them, the same we won't be able to afford the burgers! And zero tips at all! Just saying!

Kathryn S Korthank-Rikess
Kathryn S Korthank-Rikess

I've been wondering the same thing. Also is this fee taxed? Who gets the fee? Is it per check or per person?

Jim Freundschuh
Jim Freundschuh

Frankly, there isn't enough data here to really nail this down. We don't know for sure if this is a $0.35 surcharge per ticket, or if it's based on the ticket amount. We don't know what their ticket average is and we don't know gross sales, either. However, if the fee is based on sales, then that $0.35 is 2.5% of the $14.00 amount shown on the ticket, which is what you'd expect the impact of the $0.75 raise to be if their labor cost was 25% (which would be typical). This still doesn't let Oasis off the hook, though. This was a poorly done political statement, pure and simple.The only way this would have been less tacky is if they also called out on their tickets every increase in food cost, energy, rent, paper goods, insurance, and other costs. I'm sure they didn't.

Jason Plantin
Jason Plantin

In his facebook post he says he pays cooks $12 hour and dishwashers $10 an hour. He doesn't mention how much he pays anyone else.

Paul Johnson
Paul Johnson

Why would you assume they pay dishwashers, bussers, host staff, etc. more than minimum wage if they don't pay waitstaff more than minimum? Perhaps the fee is spread to more than the wait staff - making the math/assumptions false.

Jason Plantin
Jason Plantin

The only employees that potentially need to be brought to minimum are the servers. He never mentions how much he pays them per hour. No other employee there needs a raise, the math seems legit.

Terrell Brown
Terrell Brown

When do they disclose this "fee" to the customer? If not before the customer orders it may be deceptive pricing.

Tim Stang
Tim Stang

everyone should boycott all of stillwater til this place is gone

Tim Stang
Tim Stang

yes..but the .35 cent raise has nothing to do with what he is paying employees.

Carrie Graf
Carrie Graf

Costs go up all the time, they aren't added to a check as a separate fee. This is an ugly way to make a political statement and the servers will be the ones who have to explain the charge and face the backlash.

MNjoe
MNjoe topcommenter

Happier, harder-working employees. 

ChazDanger
ChazDanger topcommenter

That's funny this is an example of someone that opened their own business and doesn't like what they are getting paid.

wbracing161718
wbracing161718

He claimed his servers made $20 an hour with tips. The whole thing is a farce by an asswipe of an owner since he claims he pays well above minimum wage thus causing no effect at all.

fabfusion1
fabfusion1

@MNjoe  Not when they close up shop and everyone is out of work, because eventually the money will run out.

MNjoe
MNjoe topcommenter

@fabfusion1 @MNjoe Wow - you're really stupid, aren't you? How will the money "run out"? The owners can absorb some of the cost and pass some it onto their customers with a small price increase on the menu items. If a business can't or won't pay their employees a living wage, they should close up shop. 

Now Trending

Minnesota Concert Tickets

Around The Web

From the Vault

 

Loading...