Giving Compass' Take:

• A counterintuitive pitch about the tip credit and minimum wage for restaurant workers is being aired at public hearings across the country. But, as The New Food Economy writes, Minnesota once proved the argument incorrect.

• How can we make sure that people are paid a living wage, no matter what industry they are in? What policies are most effective in this area?

• Here's more on the impacts of a higher minimum wage.

That grievance was aired, once again, this week in Washington, D.C., where the City Council called 253 people, including some waiters and bartenders, to testify about repealing the tip credit.

The servers’ argument, which also surfaced this summer at similar hearings in New York, tends to go something like this: If you raise their wages, the restaurant’s payroll goes up. When the payroll goes up, menu prices increase. When prices go up, price-conscious diners stay home. Fewer customers means fewer tips. That’s less money for the servers, and less business for the restaurant. Eventually, the logic goes, restaurants have to lay off staff, or close down.

But does that argument actually hold up? For insight, look to Minnesota, which successfully eliminated the tip credit—first by reducing it to 20 percent as part of a 1977 minimum-wage bill, and then, as part of a 1984 bill, by phasing out the tip credit entirely in 5-percent increments over four years. (The state is now considering reinstating it.) A review of the archives of the Star-Tribune, Minnesota’s largest daily newspaper, reveals that the arguments people made for and against the tip credit some 40 years ago are the same ones we’re hearing today.

Read the full article on the tip credit debate by Sam Bloch at The New Food Economy