I’m sure the business climate is fantastic in SD

Shut Up! And go make some croutons!

This is golden, interviewing a restaurant owner, who probably pays his servers $2.13 and hour, talking about how much money he is making in South Dakota;

Don Smith enjoys preparing Margherita Cheesecake, one of his signature desserts at Casa Del Rey. Smith opened the restaurant in Sioux Falls more than 30 years ago.

And at one time Smith had up to six restaurants in several states. But he says South Dakota has the most business-friendly environment.

“Our economy seems to be so stable here. The taxes are low. We don’t have a corporate tax like all the other states around us,” Smith said.

C’mon Don. Just say it. You only have to pay servers $2.13 an hour. Sounds like a pretty damn good business climate to me.

Oh, but it gets better, Mr. ‘Shut Up and Go Make some Croutons’ chimes in;

South Dakota’s commissioner for economic development isn’t surprised by the recent survey’s results.

“The two focuses we see are the tax environment, the labor issues and I think productivity also goes into that,” Governor’s Office of Economic Development Commissioner Pat Costello said.

Another Republican who has enjoyed the hospitality anti-worker laws in this state to line his pockets in many bar and restaurant ventures he has been involved with.

While these guys are making money on the backs of hardworking hospitality workers, I can tell you they are the only ones cashing in. Servers talk, and the big talk around town is how tip percentages have seen a steep decline over the past four years, while menu item prices have increased, as well as tip-out percentages, tips have been in the toilet. It is not uncommon to get a 5% or 10% tip these days. Take into account, as a server you have to ‘tip-out’ your co-workers which can be about 25% or your tips (depending on where you work). Basically the restaurant owners are squeezing their servers by charging more, and in return we receive less of a tip.

While restaurants around town have seen record sales and growth, servers are seeing the pinch.

21 comments ↓

#1 John on 08.22.12 at 10:55 pm

That is why I always try leaving the tip in cash, even when paying the bill by card. It has its implications but its a way to circumvent those cheap cheating MFs.

#2 l3wis on 08.22.12 at 11:07 pm

John, many times it is based on sales, and that is where they fuck you. I could go on for a long time. But I will not.

I don’t have a problem with the $2.13 an hour, BUT,

1) It should be the opening line on a menu

“We pay our servers $2.13 an hour, they make their living from your gratuity.”

2) We should be able to take 100% of our tips home. We shouldn’t be required to share them with anyone. In fact state and federal law says that, but owners guilt servers into subsidizing their employees.

When I see Pat and Don talk about all the money they are making, I want to throw croutons in their faces, with extra garlic of course.

#3 Testor15 on 08.23.12 at 6:11 am

Since Don’s restaurant food was so bad, I quit going there many years ago. Many years ago we used to frequent the Sioux City version and the quality went downhill so bad it was a pleasure to see it gone. When working in his part of town, it is never considered. After hearing the stormland report I will make sure not to have anyone go there.

As for Mr. ‘Shut Up and Go Make some Croutons’ I have intentionally not frequented his operations. As long as he and his operations intentionally treat staff and investors with contempt he does not need me. We do not need to assist him or his philosophy.

#4 l3wis on 08.23.12 at 6:15 am

High Productivity – Low wages. That is what he really wanted to say.

#5 scott on 08.23.12 at 6:36 am

The South Dakota mentality is that if you work hard you’ll get paid more. When the employer doesn’t pay more, you must not be working hard enough. So you work harder, hoping you get paid more. When the the employer doesn’t pay more….you get the idea.

#6 Testor15 on 08.23.12 at 7:24 am

The state’s motto: South Dakota Come Explore the Land of Infinite Serfdom!

#7 Testor15 on 08.23.12 at 7:31 am

You could swear Rep Akin is from SD: http://www.theonion.com/articles/republicans-condemn-akins-comments-as-blemish-on-p,29259/

The Onion says it all with the smile :)

#8 Poly43 on 08.23.12 at 7:39 am

Since the spouse and I are both retired now, we don’t eat out as much as we used to. When a good steak costs as much as it does in a restaurant, the menu SHOULD read “Our prices are reflected in what we pay our staff. You need not tip.”

Yeah….Right.

#9 l3wis on 08.23.12 at 8:18 am

I recently quit at a place because tips were so awful I wasn’t even making minimum wage with my hourly. That’s not the worst part though. Most places require their servers to do all the cleaning, and when it is slow and you are not making any money, they make you clean more. They get away with it because of a Federal Law passed last year (?) that says as long you are making the equivalent of minimum wage with tips they don’t have to pay you much. Restaurant owners in SD get away with it by requiring their customers to pay their servers, and many times forcing or guilting the servers into paying the hosts, bussers and bartenders. When they raise prices all they are doing is shrinking our tip percentage.

#10 l3wis on 08.23.12 at 8:21 am

I often wish servers would get together in this state and start a petition drive for a ballot initiative that requires restaurant owners to 1) pay minimum wage 2) not require servers to give up any of their tips. I think it is that way in Minnesota. The owners would still be fine on labor costs because they would stop overstaffing (something they do alot because they can with the low wages they are paying). With less staff, servers would make more, and everyone would be happy.

#11 Anooner on 08.23.12 at 7:06 pm

Speaking of Cosmo, Last Sunday’s Star-Trib had a story on 1A bout SD’s five mill budgeted to lure workers to SD. I didn’t read the whole thing, but it talked about how the money goes to pay half of a 5K headhunter fee (at least on the featured person). I wonder if that is for all employment agencies in SD or if just one outfit is getting fat on this deal. Sounds a bit like a grease job subsidy to the headhunters.

#12 l3wis on 08.23.12 at 9:19 pm

Reminds me of Gant hiring Roust for $2500 a week because he doesn’t want to f’k up a presidential election. South Dakota, the new Florida.

#13 Beer Jew on 08.24.12 at 9:28 am

Periodically, you’ll see, hear, and read “Come to South Dakota” advertising campaigns in MN. As a former SF South Dakota resident living in MN, I can tell you that moving back would be a complete lifestyle change.

Taxes are a necessary evil. Minnesota has some of the highest taxes in the US. We call ourselves “the state of gouge”. With that, at least in my opinion, comes better schools, better hospitals, and an overall higher standard of living, etc etc. Wages are generally higher to compensate for the taxes. We come out ahead every year.

If my wife and I moved back to SD, we each would take a roughly 35-50% cut in pay. No thanks. You’ll know I’ve moved back to South Dakoata for good when you see me riding in the back of a hearse.

I get the biggest chuckle out of educators and business owners who scratch their hands and wonder why people leave South Dakota after graduation. Pastures are greener elsewhere, period.

#14 Detroit Lewis on 08.24.12 at 12:00 pm

BJ – Would agree. And things are not that cheap in SD anymore. In fact a rarely go out to eat or drinking, maybe twice a month if that.

#15 MQ on 08.24.12 at 7:51 pm

Mr. Smith used to live around the block from me when I was a kid. I didn’t live in the richy-rich part; 1608 S. Center, over by Mark Twain. Speaking only from childhood memories, he was always good to me when I worked for him. I used to caddie for him at Westward Ho. There were some real pricks there (in fact, a majority of his golfing foursome were assholes), but he was a gentleman. Of course, I know nothing of the resturant business. I worked at a greasy spoon in Tracy, MN for eight months when I was 17 and said never again. Being a server sucks; I’m sure being a server in SD sucks more than usual. Is it law that one has to share tips? That is something I was not aware of.

#16 l3wis on 08.24.12 at 9:00 pm

He is a nice man, I do agree. But we almost tangled years ago. He demanded one of paintings be taken down at a local coffee shop because he didn’t like it. They told him no and he wasn’t too happy about it. I’m not to keen on people who believe in censorship. As for him bragging about doing business in SD I have to chuckle a little bit since two of his places failed in the past (I think) he had a restaurant in RC

http://rapidcityjournal.com/article_0f55f547-d4b4-5b78-ae25-64d47d77296b.html

that had to close because of some virus in a drinking fountain, and his second location closed in SF also that used to be across from Cherry Creek Grill.

As for tip sharing. Some places make you sign an agreement to share tips, then it is legal. Most places in SF ask you to do so, and if you are not willing to they won’t hire you or they make life tough for you. Most places make you give 3% of sales NOT tips which means you are forced to give something that is not a reflection of your tips or the service the support staff is giving you. When I worked as a busboy at Olive Garden in the early 90′s, bussers were tipped on merit, which makes more sense.

I figured last year when I worked full-time at one place I paid out about $4,000 of my own tips to support staff. Support staff should be paid by the employer not by their fellow employees IMO.

#17 Testor15 on 08.24.12 at 11:13 pm

To Pat and other low tax wage promoters,

For many years I have owned and operated businesses in South Dakota. There have been many discussions with state business recruiters and local business people who have always pushed the low wage / tax line. There was some success bringing some ‘cheap’ businesses to this state. These cheap businesses have come here to take what they could for as long as they could but don’t ask these cheap businesses to move their corporate headquarters here. The governor can have his hunting parties for donations and other perks but it is not going to bring more corporate headquarters here. There is no desire to move the chairman and other decision makers here to the hinterlands.

You can forget getting anything more than the call centers and other expendable jobs being brought here. It is too expensive to ship raw material here and too expensive to then ship the finished goods out. Get over it South Dakota, as tax rates drop around the country and globe, low taxes and cheap labor will have no appeal even cheap companies.

Some of us are here by choice, some by birth, some by accident but no one will move a successful corporate headquarters to a land where you can’t escape very easy.

#18 Pathloss on 08.25.12 at 12:38 pm

Just want to say that Casa Del Rey is the worst mexican food I’ve ever had. I’d say eaten but it’s inedible.

#19 Pathloss on 08.25.12 at 12:45 pm

I had good service recently. Told the waitress service was excellent but I only tipped the minimum on the bill. Then I palmed her ten in cash.

#20 Muqhtar on 08.25.12 at 6:07 pm

I think our system of restaurant tipping in general in the US is screwed up. Basically the cost of server labor is borne completely on the servers themselves. The restaurant owners completely wash their hands of the cost of labor necessary to get the food to the table and to sell it. Go to other countries and the tip is either built into the cost of the meal or into the check automatically as a direct cost of providing you the service.

I don’t see a “living wage” bill for restaurant staff ever passing in SD. This place is so overly red that nothing like that would ever fly. I’ve quickly learned that if you aren’t a multi-generational landowner with thousands of acres or you don’t own a bank you have little pull here. And this is coming from someone who considers himself a conservative!

#21 Detroit Lewis on 08.25.12 at 10:37 pm

Muq – I agree that tips should be built into the bill. And if a customer gets bad service, they can take it up with management to adjust the bill.

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