Tuesday, July 13, 2010

Dr. Spin will see you now

David Brauer reported that Tom Horner agreed with Tom “Stonewall” Emmer on the issue of a tip credit to reduce the minimum wage paid to waitstaff in the hospitality industry:

In response to my Twitter badgering, I received this statement via deputy communications manager Matt Lewis:

Rep. Emmer’s insensitivity to the many hospitality workers who are struggling to earn a decent living is how ideological politics are dividing Minnesotans. Tip credit is part of the solution needed to sustain jobs in the hospitality industry, but it shouldn’t be a rationale to pay less-than-minimum-wages.

Reading this, I scratched my head.

The tip credit is defined as paying less-than-minimum wage, at least the minimum paycheck non-tipped employees get — that's the point. If Horner accepts the tip credit as a "solution," he accepts this, too. However, no one — not even Emmer, I think — suggests workers end up with less-than-minimum pay after tips. In fact, federal law requires owners to make up the difference if gratuities fall short.

Horner, realizing that he was in the southbound “Tom Lane” on the issue, quickly backpedaled:

In a subsequent email, Horner spelled out his position in more, um, detail:

- A "go-forward" approach in which a tip credit is applied only to increases in the federal minimum wage ($7.25 an hour, which applies to many hospitality businesses, not Minnesota's lower standard). Minnesota hospitality workers still would earn no less than the state's minimum wage, and more with tips.

- A phased in tip credit based on a person's income. Again, this would guarantee that hospitality workers earn no less than minimum wage.

In other words, Horner wouldn't cut any tipped employee's hourly pay, but he also wouldn't raise the minimum-wage floor, at least not for everyone. Thus, a tip credit would be born the next time the feds raise the minimum.

That explains everything, Tom; why didn’t you say so in the first place?

Really, Dr. Spin has his word-salad shooter in the full-auto mode here. But one thing is pretty clear: both Tom Horner and Tom Emmer think that holding down the minimum wage for waitstaff is a peachy idea.

At DL last week, somebody proposed a litmus test. If you’re in favor of increasing wages, you’re a Democrat. If you’re in favor of decreasing wages, you’re a Republican. Not perfect, but pretty close.

If we apply this test to Tom Horner, does he turn red or blue?

In other news as to whether there is any daylight between Tom Horner and the Republican platform, there was a profile article about Horner in the Star Tribune on Sunday. One exchange in particular caught my eye:

Asked if he would be running for governor if Republicans had endorsed former U.S. Sen. Norm Coleman, Horner answers, "Probably not. Norm Coleman would have been able to coalesce everyone in the party."

It is perhaps charitable to call Horner a “disaffected Republican.” But it’s a form of voter fraud to call him an “independent.”

o  O  o

Update: Stonewall has walked back on the issue now, too:

“If restaurant owners want a ‘tip credit,’ great,” he said. “But then let’s not tax tips and let’s not require employers to collect taxes off the meals they serve to their hard working employees.”

“[T]o collect taxes off” presumably means withholding on the income to the employee for the value of the meal, and also payment of the employer’s share of federal payroll taxes like FICA or FUTA. (If meals are provided occasionally and for the benefit of the employer, they aren’t compensation to the employee anyway, but the cost of preparing them is deductible to the employer.)

At all events, Stonewall, much as he might like to, isn’t going to do anything about federal payroll taxes or withholding. The state is really mostly a tag along.

Tips as tax-free income is such a transparent sop to a large group of people he obviously alienated — not only waitstaff, but virtually every working stiff. His original tip credit proposal shows you where his heart really is.

The fact that Stonewall came up with this laugher tells you how badly the original tip credit proposal played.

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