Old Post Pub manager Michael Owens says successive increases in the minimum wage is making it tougher to stay in business, but a potential legislative compromise is “a step in the right direction.
At Missoula’s Old Post Pub, the “Recession Special”—a bowl of chili and grilled cheese sandwich for $5—now accounts for about half of all lunch orders, says manager Michael Owens. He’s manning the bar most afternoons because workers’ shifts have been cut. The number of customer credit card charges is way up.
“Typically during recessions and depressions people still get drunk,” he jokes.
But apparently not enough. Traffic is down at the Old Post and dozens of other bars and restaurants around town, partly the result of recession-time penny pinching, partly because we’re in the midst of Missoula’s winter doldrums. Applebee’s has cut shifts, totaling between 50 and 75 hours per week, and night sales are about half of what they were just a few months ago, says assistant manager Ashley Slehofer. Sales are down about 20 percent since November at the Mustard Seed, and two workers have been cut from each shift, says waitress Lindsey Fahy. About 20 hours per week have been cut at Famous Dave’s, says kitchen manager Lance Flansaas.
As an added burden to restaurant owners struggling in the current economy, Montana’s minimum wage increased $0.35 on January 1 to $6.90 per hour, giving a little more to the server who brings the Recession Special to your table, and less to the restaurant owner trying to stay in business. The wage increase heightened the stakes as restaurant owners made their seemingly biennial attempt to apply a “tip credit” to servers’ wages through Senate Bill 253, which was killed Feb. 3. The legislation would have allowed business owners to count workers’ tips toward increases in the minimum wage beyond $6.90. The federal minimum wage—and Montana’s—is set to increase again in July to $7.25.
The restaurant industry argued that tipped servers typically make far more than minimum wage, so they unfairly benefit from its increase.
“The anecdotal stories I hear from members is that their servers are doing very well, and we don’t begrudge them doing very well. We want them to do well,” says Brad Griffin, executive director of the Montana Restaurant Association. “But they are categorized—I think mis-categorized—as minimum wage workers when in fact their wages are often equal to jobs we go to great lengths to attract to this state, like mining jobs.”
Mark Anderlik, executive officer of UNITE HERE Local 427, which represents restaurant workers, recognizes that businesses are under economic strain. “But trying to solve that, even in part, on the backs of their employees is the wrong way to go,” he says.
In the wake of SB 253’s contentious proposal comes a compromise between the restaurant industry and workers’ unions. Senate Bill 398, introduced by Sen. Ryan Zinke, R-Whitefish, would cap the tips included in employers’ workers’ compensation and unemployment insurance calculations. The bill aims to fix the current dynamic in which the more an employee makes in tips, the less the employer makes. A hearing was scheduled for Wednesday, Feb. 18.
As part of the deal the restaurant industry pledged to give up on tip credit legislation for the next two sessions.
Owens of the Old Post, for one, says it’s a step in the right direction.
“But every two weeks I’m still paying out more than I should be to people who make far more than minimum wage,” he says. “That’s the thing. That’s the problem.”
Servers, however, claim they’re not immune to the downturn. Many in Missoula—a market notorious for having graduate students serving Moose Drool—are seeing a drop in pay. In addition to businesses cutting hours due to fewer patrons, the patrons who do show up tip less. It’s forcing some servers to seek other work, which is nearly impossible to find. The RiverBend restaurant at the Holiday Inn Parkside, for instance, recently posted a dishwashing job and received 70 applications.
“There are so many different people looking for work it’s hard to figure out who’s qualified and who’s not,” says Jacob Osborne, RiverBend’s nighttime kitchen supervisor. “And it’s just washing dishes.”
The Mustard Seed’s Fahy, a student at the University of Montana, is down to only one waitressing shift a week. With the reduced number of shifts, she’s rarely able to pick up another that fits with her class schedule. When she does work she makes more than minimum wage, but “$150 on a Friday night—that’s not enough to live,” she says.
Patrick Little, who works behind the bar and in the kitchen at Higgins Alley, says tips are down by as much as five percent, and the regulars are becoming less and less regular.
“A lot of servers at Higgins Alley have had to look for second jobs just to make ends meet,” he says. “Everyone’s crossing their fingers and hoping it will pick back up in March again.”
The Missoula Job Service doesn’t keep data on how many of its users have been laid off by local bars and restaurants. Manager Wolf Ametsbichler says it’s particularly hard to keep track because of the industry’s transient workforce. But despite the poor economy, Ametsbichler points out one silver lining for restaurant owners: They can be picky when filling open positions.
“They’ve been on the other end, where they had to take pretty much a breathing body just to fill a hole,” he says. “And those days are long gone, even though it’s only been about four months.”
Case in point: That new dishwasher at the RiverBend who beat out 69 other applicants? He’s a UM senior on the Dean’s List.