Workers living off tips need a minimum wage raise: Opinion

Workers who rely on tips for a living, such as waiters, make even less than the state minimum wage. (Getty Images)
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on March 14, 2014 at 12:00 PM, updated March 14, 2014 at 3:39 PM
Workers who can afford the basics can support local businesses, which can, in turn, grow and hire more workers.

By Mary Gatta and Matt Unrath

Imagine not getting a raise for 23 years. In 1991, James Florio was New Jersey’s governor. “Roseanne” was one of the most popular television shows. The Giants beat the Bills in Super Bowl XXV. It was also the last time New Jersey’s tipped workers got an increase in their minimum wage.

While the standard minimum wage has been increased several times, corporate restaurant chains have persuaded lawmakers to keep the sub-minimum wage for servers and other tipped workers frozen at $2.13 an hour for more than two decades. According to our recent survey of 100 restaurant workers along the Jersey Shore, successful lobbying has produced widespread economic insecurity among these workers.

Restaurant chains would like you to believe their workers are just teenagers looking for additional spending money, but it’s not true. The median age of a restaurant worker in New Jersey is 36. Restaurant workers are more likely to be hard-working adults struggling to get by and care for families than young people in their first jobs.

Tipped workers are supposed to be paid at least the state’s minimum wage of $8.25, but this law is rarely enforced. In fact, workers’ base wages are so low, they report that they regularly earned zeroed-out paychecks. After state and federal taxes are applied to their low wages, there is nothing left. The truth is that restaurant servers are living entirely off tips.

And despite what the industry claims, these tips are often not enough for workers to make ends meet.

One worker told us, “I hate having to live off tips … You can go in one day where it’s completely slow and make $20.”

A Bureau of Labor Statistics survey finds the median hourly wage including tips of servers in New Jersey is less than $10 an hour. In fact, in a full accounting of New Jersey restaurant workers’ incomes from 2012, we found that 90 percent lacked the incomes they needed to live with just basic economic security.

Nationally, restaurant workers are much more likely to rely on food stamps than the general U.S. workforce. It’s a sad irony that the people who serve us our food struggle to put food on their own tables.

Corporate restaurants are making record profits by paying poverty wages. And they rely on us to pick up the tab. Customers pay their workers’ wages through tips and the public subsidizes them through taxpayer-financed safety net programs.

When this is pointed out, restaurant lobbyists typically respond with the common scare tactic that raising workers’ wages will mean fewer jobs.

Empirical evidence proves otherwise, but consider the following example: Over the last 15 years, since Washington eliminated its tipped sub-minimum wage and indexed its minimum wage to the cost of living, restaurants have increased their payrolls by more than 20 percent.

Washington has the country’s highest minimum wage and stronger job growth than the national average.

This makes sense. Our economy is strongest when workers earn decent wages and are able to care for their families. Workers who can afford the basics can support local businesses, which can, in turn, grow and hire more workers. Good jobs and secure families drive an economy forward.

New Jersey’s lawmakers, voters and employers can choose to build a fairer, stronger economy by increasing, or eliminating, the tipped minimum wage.

Assemblywoman Shavonda Sumter (D-Passaic) has introduced legislation to raise the state’s tipped minimum wage. At the federal level, Sen. Tom Harkin (D-Iowa) and Rep. George Miller (D-Calif.) have introduced the Fair Minimum Wage Act, which would increase the federal minimum wage to $10.10 and increase the tipped minimum wage, as well.

Restaurant workers have been waiting more than two decades for a raise. Let’s help our economy and give it to them.

Dr. Mary Gatta is a senior scholar and Matt Unrath is the national projects director at Wider Opportunities for Women. Keep the conversation going at


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