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Tuesday, April 1, 2014

Mayor Murray Tells Activist He's Been Against Tip Credits "Since 1997," But Co-Sponsored a State Tip Credit Bill in 2001

Posted by on Tue, Apr 1, 2014 at 4:29 PM

Mayor Murray at the Ask the Mayor forum on March 25.
  • Seattle Channel
  • Mayor Murray at the "Ask the Mayor" forum on March 25.
Last week, Mayor Ed Murray sat down for an "Ask the Mayor" session at City Hall, a televised event where the public was welcome to get up to a microphone and ask him whatever they'd like. Part of the event was set aside specifically for a discussion of the minimum wage, and he got a little feisty during that conversation when Jess Spear, organizing director for 15 Now, asked him about his history of supporting a tip credit in Olympia. A tip credit, if you haven't been following this debate, is a lower wage for tipped workers, where their tips from customers can be counted by their employer to make up the rest of the wage. Nationally, the minimum wage for tipped workers is $2.13 an hour to non-tipped workers' wage of $7.25 an hour; Washington State is among just a handful of states without a lower wage for tipped workers.

Spear started her question to Murray by mentioning that he had supported legislation instating a lower wage for tipped workers, a position 15 Now and many activists are strongly against, while he was a state legislator in Olympia. "So I ask you where you stand on tip credit," she asked Murray. "Have you changed your position, or are you going to be bringing tip credit to Seattle?"

That's what set up this testy exchange with the mayor (you can watch a video of their interaction right here):

MURRAY: So first of all, what year did I support that?
SPEAR: 2002.
MURRAY: Actually, you're wrong. It was in the 1990s.
SPEAR: Well, have you changed your position now?
MURRAY: No, it was in 1996. You know who else supported it from Seattle? Representative Kip Tokuda and Representative Sharon Tomiko-Santos—between us, at the time, probably the three most liberal members of the house. Do you know why we supported it? Because we had a lot of immigrant restaurants who were struggling, and we had a lot of people in the back of the house, dishwashers, where were were—the tip credit idea was we would make a deal that the back of the house would get part of that or they would get health care. And it didn't happen. And we withdrew our support, as I said, in 1997. It's interesting this issue keeps coming up. If folks want to change politicians' minds, then when their minds change, you should support them. But you should also understand why they did it. So: I have been clear since 1997 that I do not support a tip credit.

Except there's one problem with Murray's defense: He co-sponsored a tip-credit bill in 2001. You can see it right here, House Bill 1973, which directed the department of labor and industries to "establish an adjusted minimum tipped wage rate that is equal to seventy-five percent of the adjusted minimum wage... but no less than six dollars and seventy-two cents per hour."

HB 1973 was introduced in 2001 and again in 2002. So he may feel like he's "been clear" about his stance since 1997, but he was signing on to legislation supporting tip credits in 2002—which is exactly what Spear said.

Look, 2001 was a long time ago, he just got the date wrong, and it sounds like his position has changed. But maybe it's better not to scold activists when you're wrong, huh?

He finished his answer by saying that a "tip credit," per se, is off the table in Seattle because it's for the state to decide, but that his advisory committee is still discussing "total compensation"—which, many business owners argue, should include workers' tips. It could also, as Dominic explained here, include health care benefits, retirement contributions, etc. "I'm going to wait and see what this task force comes out with," he finished.

So whether he supports counting tips toward fulfillment of the minimum wage appears to still be very much on the table.


Comments (28) RSS

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Max Solomon 1
I often leave >$15 tips for a meal that takes approx. an hour. I'm not the only customer, either. so, I think I'd be ok with say, the federal minimum wage (not $2.13/hr.) + tip credit being equivalent to a $15/hr. city minimum wage.

why is that wrong again?
Posted by Max Solomon on April 1, 2014 at 4:49 PM · Report this
If only life were simple and wages were wages and there were no benefits. But there are and I think most people look at the whole package when deciding where to work (if they have a choice). So, why shouldn't tips count as part of the package?

Here's the catch. With a tip credit, you still should be guaranteed a minimum wage. If the employer says he'll pay you 2.50 an hour plus tips, that's fine. However, if tips come up short, he should have to make up the difference. If you come out ahead, that's a bonus for you and those you share with.

Putting this responsibility on the employer could help making reporting tips more accurate. Currently, who could ever know if a waiter is pocketing cash, not sharing it with the cook or reporting it to the IRS. With the employer in the picture, he might want to add some checks and balances to make sure all tips are "seen".

In short, I support a tip credit but with a guarantee to employees that they are getting at least minimum wage.
Posted by pragmatition on April 1, 2014 at 5:17 PM · Report this
seatackled 3
Mayor Murray's against tip credits? Yikes, "collectivism sucks" is going to campaign for his removal from office now!
Posted by seatackled on April 1, 2014 at 5:22 PM · Report this
According to Tom Douglas, servers at his high-end restaurants make about $50/hour in tips. But his line cooks make $15/hour in their non-tipped positions. Something wrong with this, methinks.

Years ago when my sister worked as a waitress, she shared tips with the cooks, on the theory that a well-tipped cook might get the food out a little faster or better, for those servers who shared. Maybe not so fast for the servers who did not share.
Posted by Citizen R on April 1, 2014 at 5:36 PM · Report this
This should be obvious, but not every tipped employee works at a Tom Douglas restaurant with $50/hour in tips. The so called "tip credit" is just a subsidy for restaurants that do pull in nice tips, and those are the same ones that need the least help from a tip credit.
Posted by Tip penalty on April 1, 2014 at 6:11 PM · Report this
If we are focused on low wage workers, then a tip credit makes sense. Tipped workers in Seattle are not the low wage workers that need the boost. Put the money where it will do the most good. The state min wage of 9.32 ( and going up in January) will still apply to all tipped staff.
Posted by Seattle91 on April 1, 2014 at 6:31 PM · Report this
The bizarre thing is that NOBODY has ever proposed Deep South style tip credit- to drive wages down to $2-3 buck an hour. For all that I know, what's being discussed is retaining the current minimum wage as a base, and if tip does not supplement enough to reach the new level of MW- employer has to supplement that. This way currently tipped employees would still make at least 9.32 (or higher), plus retain the amount of tips they are currently making. Reason- overall prices at restaurant would not raise 25-30%- as they would if tip is not counted in the wage calculation- but by 5-10%, which the public can afford and will not decrease tipping or attendance frequency. The actual result is no astronomical price hikes, no restaurant closures, no job loss of any kind.
If tip is not taken in consideration in the wage formation, restaurant prices will rise with 25-30%. That means dramatically decreased tipping- cause the public's spending ability has not improved by said percentage. Or, as I'm overhearing, the restaurants can raise prices by 25-30% and forbid tipping- Starbucks style. Then the restaurant would have the discretion to decide what wage overall to pay its servers. My guess is that restaurants would calculate wages based on their worst months of performance, resulting in actual DECREASE of overall home bring cash by servers, bartenders and even back of house. In other words, half ass thought through policy by the unions and 15NOW will decrease the income of restaurant employees. I wonder, if they are pro- interest of the working public, why would they want that? What is the sick political calculation behind it? No server or bartender I've talked to supports the idea of tip not factored in the equation.
If I were Ed Murray- I wouldn't be concerned about the attacks on him on that vote, whenever it was. Unions are not the only voting public and his past performance puts him on the right side of the debate.
Posted by valume on April 1, 2014 at 6:49 PM · Report this
Again, Anna Minard shows that she's not a reporter but a cheerleader.

What Anna is just so ignorant of is the reality - from the base of this issue - there's nary a small business that can afford to a) pay a great wage hike out of their current operations, and b) few can survive in a environment of the kind of cannibalistic competition that will be the result of the cost and thus price increase that will be the natural and guaranteed result of her pet-project $15 increase in the MW. Anna does not care for the facts. Smugly, she's sitting right now on her bully pulpit, laughing at us poor sucker small business owners and watching us squirm as we try to navigate through her propaganda in what appears to be a vain attempt to reach her level of public attention.

Thankfully, The Stranger has offered to allow some small business people a chance to chime in wrh a counterpoint, but that's one small voice once a week to her constancy cheerleading for the end of what is Capitol Hill's vibrant community.

She and the $15 Now people know what they're doing when they challenge the Mayor on his pro-$15 bone fides. They force him to vehemently defend his position, making it pretty much impossible for us small business people to get anything from him but a warm handshake and a politician's smile.

Many of you are my customers and a lot are friends, and I can only tell you that without a consideration for Total Compensation, most of is will be out of business. That's a fact. AND! Even WITH Total Comp for tip/commission-based businesses, that leaves out in the cold our neighborhood stores that make Seattle such a great city. The clothing stores, the art & pet supply stores...manufacturing - all of these businesses simply CAN'T handle the competitive disadvantage after they have to raise their prices.

But, Anna doesn't care. She has an agenda, and it ain't one of honesty or balance.
Posted by I'm Cool on April 1, 2014 at 6:53 PM · Report this
In Murray's defense, he's a moron and cannot be expected to keep track of what he "stands for".
Posted by DOUG. on April 1, 2014 at 8:02 PM · Report this
If Ed is correct in his assertion that he was one of the most liberal members of the house, this is a sad indictment of politics in our state. Ed is not a progressive. He is an establishment democrat who supports tax breaks for Boeing, subsidized pro sports arenas, and major highway projects that were voted down by an overwhelming majority of citizens. When I met him during a one on one "constituent meeting" in '04 he defended these positions and also proclaimed opposition to election reform that might threaten the bipartisan monopoly that shuts out independents, and opposition to true cost economic reforms that seek to hold industry accountable for their ecological externalities. The only "progressive" thing he has done was to find himself as the posterboy for the dems finally embracing marriage equality since he was the only (or at least most prominent) gay member of their caucus. And I'm not one bit surprised that he would be testy or condescending towards the 15now activists. He ended our meeting by very condescendingly suggesting I read "rules for radicals" to learn how to be an effective activist.
Posted by Upchuck on April 1, 2014 at 8:23 PM · Report this
but but but Gay Marriage
Posted by UberAlles on April 1, 2014 at 8:23 PM · Report this
Max Solomon 12
@9: HA! I miss McGinn too.
Posted by Max Solomon on April 1, 2014 at 8:37 PM · Report this
Murray is a disaster. It's deplorable that McGinn was denied his second term just because his opponent had a cute husband.
Posted by Vote Smart Not Gay on April 1, 2014 at 8:41 PM · Report this
@8 Sorry you feel that you can't get more than a handshake and a smile out of the mayor. Most minimum wage workers feel the same way. This is the first time I have seen the working poor get a voice in a way that will help so many in one shot. The city will not crumble. We will survive.
Posted by swilkins on April 1, 2014 at 8:47 PM · Report this
Ph'nglui mglw'nafh Cthulhu R'lyeh wgah'nagl fhtagn 15

The idea is that business going to get 5 city council members to vote for $15/hr with a tip penalty, and Murray's not going to veto it, because... why? Because he's weak? OK, maybe.

Aaaaaand then... 15Now is going to take this organization they've built and the money they've collected and do... nothing? Why would they just do nothing? They're sitting there loaded for bear and they've got this golden opportunity to show they are a force to be reckoned with. And the polls say they will be able to score a huge victory in 2015 against the whole establishment, and then turn around in 2016 and campaign on that huge victory. The bumper stickers write themselves!

The only way to head that off is to sweeten the deal. What's being offered in exchange for the cutouts? What's being offered that's so sweet it would stop 15Now from doing the obvious?
Posted by Ph'nglui mglw'nafh Cthulhu R'lyeh wgah'nagl fhtagn on April 1, 2014 at 8:51 PM · Report this
Ph'nglui mglw'nafh Cthulhu R'lyeh wgah'nagl fhtagn 16

So it's a choice between the kinds of cool watering holes and unique boutiques that make for a great hipster playground, and working people's families? Hipsters... or a living wage? Hipsters, living wage? Hipsters, living wage?

Which should we choose? Will the voters choose hipsters? (spoiler: No)

Not that this is even a real choice. Are wages low in Williamsburg? Or Portland? Or San Francisco? No. Not even close. Obviously yuppie/hipster playgrounds are insensitive to high wages. Otherwise all the cool places would be in Salt Lake or Pocatello.

This isn't about Seattle becoming less hip. And even if it was, Seattle would not vote to let people live in poverty just so we can be hip.
Posted by Ph'nglui mglw'nafh Cthulhu R'lyeh wgah'nagl fhtagn on April 1, 2014 at 9:16 PM · Report this
seatackled 17

You can save a lot of trouble and time pounding away at that keyboard if you just do as Meinert does and tell Anna to fuck off.

Seven letters and a space, and you'll be able to use that extra time to serve your customers better.
Posted by seatackled on April 1, 2014 at 9:26 PM · Report this
The so called "tip penalty" in Seattle is a myth- let's call things with their rightful names.

If a server made 9.32 and pulled 7 dollar tip and their wage got decreased to 2.32 that would be absolutely correct- it's a robbery. But it doesn't happen here and noone advocates it.

If a server makes 9.32 and pulls 10 dollars tip, here, in this city, it is a wage of 19.32. It's called a decent wage.

If a server in future Seattle makes 15 an hour and may be some tip, it's called income decrease.

If a server in future Seattle makes 15 and gets somehow 10 dollars tip... stop here, they won't, they'd be jobless. Noone else got a raise, but their prices went up, remember?

If a server in future Seattle gets 9.32 with COLA annually, plus the same 10 dollar tip, they'll make 19.32. While McDonalds workers get their well deserved raise, while Wal- Mart and Costco workers get their well deserved raise.

It's not "sweetening", it's not "compromise", it would be a smart city- wide policy making.
And it might guarantee the mayor a wide coalition of voters to ensure his re- election, so further progressive policies could be enacted. It's good politics, too.

Posted by valume on April 1, 2014 at 9:27 PM · Report this
adjusted minimum wage rate of 75% for tipped employees, but no less than the $6.72/hr that was the minimum wage at the time.…
That's still a far cry from what (even now) a tip credit wage is in most states.
Posted by ChefJoe on April 1, 2014 at 9:37 PM · Report this
Ph'nglui mglw'nafh Cthulhu R'lyeh wgah'nagl fhtagn 20

We used to have a two tiered system, before I-518 went into effect in 1989. The hourly wage for tipped workers jumped by 85% after the tip penalty was eliminated -- a far larger jump than restaurants will face with $15/hr.

For 15 years, there was no tip penalty. Everyone made the same minimum. If you made tips on top of that, great.

So the reason we should go back to a double standard, a two class system, is... what again? A list of made up numbers? Are you making numbers up because you don't have any real numbers? Seems like if those made up numbers were really valid, then you have to believe that a double standard would have been awesome during the last 15 years. Really? Seems like things have been going kind of nicely for tipped workers. For once. Why would they want to be left behind like they used to be?

Is it because $15 sounds like a lot of money? When Martin Luther King marched on Washington in 1963, he demanded a Federal minimum wage of $2/hr. That's over $15 in today's money. And worker productivity today is $22/hr.

None of this is a reason for 15Now to sit on their hands. I don't think you understood the question. Why would 15Now take this lying down? Why? They have so much to gain and the momentum is with them. If they believed any of these anti-minimum wage arguments, they'd be Republicans. But they're not. They have no reason not to start collecting signatures.
Posted by Ph'nglui mglw'nafh Cthulhu R'lyeh wgah'nagl fhtagn on April 1, 2014 at 9:59 PM · Report this
threnody 21
"...his advisory committee is still discussing "total compensation"—which, many business owners argue, should include workers' tips. It could also...include health care benefits, retirement contributions, etc. "

IMHO, there's a world of difference between tips/commissions (like it or not, these are wages, they pay employee's bills) and health care benefits (um, those are benefits, and while they may be awesome, employees don't get to choose how to spend this money).

Either be a good, competitive biz owner and give benefits tied to performance and/or seniority to incentivize your good employees...or just don't. Don't give benefits, and then basically take them back. NO ONE except business owners (who see that real $ leaving their bank account) thinks of owner-paid health insurance as part of their "salary." Tips and commissions are another story.

Most restauranteurs are not the 1%, not even close, and I don't think there's any reason to take cues from the corporate playbook here. Including benefits is a way for billionaire CEOs to say "we're not paying competitive salaries at my Fortune 500 company, but if you add in the health insurance and the bus pass and your parking discount then it gets close!" No employee ever says "Good point! I'll totally start thinking of it that way!" and actually means it.

But back to tips. Kitchen employees almost always lobby to pick up server/bartender training and shifts because tips make it a HUGE pay increase over their kitchen $15. It's hardly a 'penalty.'
Posted by threnody on April 1, 2014 at 10:35 PM · Report this
"Anti-minimum wage." That's the problem right there; framing a discussion in such black and white terms as to imply the only solution is one unwavering bulldoze.

How about gradual implementation of untested policy to be certain it has desired effects? Derp.
Posted by Mikeymoomoo on April 1, 2014 at 11:44 PM · Report this
@18 "it might guarantee the mayor a wide coalition of voters to ensure his re- election, so further progressive policies could be enacted."

This made me laugh. Really? That would be something though huh? $15 passing and then the guy who fought it rather than the activists who forced the issue takes credit...
Posted by Upchuck on April 1, 2014 at 11:54 PM · Report this
The Third Rail 24
Why don't we just get rid of tipping altogether and, you know... let employers pay their employees what their labor is worth? Having spent the last 7 years outside the US, I've never, ever missed having to tip.
Posted by The Third Rail on April 2, 2014 at 2:24 AM · Report this
Max Solomon 25
@23: but, ironically, that's how politics works. republicans will be taking credit for obamacare in 2016.
Posted by Max Solomon on April 2, 2014 at 9:18 AM · Report this
Ph'nglui mglw'nafh Cthulhu R'lyeh wgah'nagl fhtagn 26

We tested it with I-518. 85% wage jump! This one is only 60%. Plus, nobody has even shown that minimum wage increases harm business or jobs at all. At. All. Not one instance. Not even a little bit. Zero.

What was untested was letting wages fall so far behind for so many years. That experiment was a disaster and here's the cleanup.
Posted by Ph'nglui mglw'nafh Cthulhu R'lyeh wgah'nagl fhtagn on April 2, 2014 at 1:45 PM · Report this
@23 well it was their idea first anyway right?
Posted by Upchuck on April 4, 2014 at 1:08 AM · Report this
and right afterwards, Washington had the highest inflation from the last 8 years. Unemployment did go down, but what was the status of the economy then? Unemployment is higher currently than when I 518 got passed.
Posted by KevR on April 5, 2014 at 5:27 AM · Report this

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