Tipping Subminimum Wage in Favor of Workers

When you go out to dinner at a restaurant you might ask for salad dressing on the side, whether the carrots are organic, or if the chicken is free range, but do you ever ask the restaurant owner if her employees make a living wage?

Waitresses and waiters are the largest group of tipped workers in the United States; they also struggle with a significantly higher rate of poverty than the rest of the workforce. Tipped workers are also more likely to be women and people of color, contributing to the broader race and gender wage gaps.Tips

While the federal minimum wage is $7.25 cents per hour, the tipped minimum wage has been frozen at just $2.13 per hour for the last 23 years. Seven states don’t have a separate tipped minimum wage, and some have higher tipped wages than the federal figure, however, tipped workers in most states rely on tips from customers to round out the rest of their salary.

When the economy is slow or when weather keeps customers at home, tipped workers see their hours cut and tips shrink, causing many to turn to public support just to stay afloat. Food servers collect food stamps at twice the rate of the U.S. workforce as a whole, and are three times more likely to live below the poverty line.

Women, and people of color are disproportionately represented in the lowest paying tipped jobs. Sixty-six percent of tipped workers are women, including 70 percent of all servers. Nearly 80 percent of tipped restaurant workers living below the federal poverty line are women.

Additionally, workers of color are disproportionately concentrated in the (restaurant industry’s) lowest paying positions, and black female servers are paid only 60 percent of what male servers make, compared to 68 percent of male server earnings for women overall. When hours are cut or tips shrink, women and people of color are disproportionately the ones who suffer.

Increasing the subminimum wage for tipped workers would help lift hundreds of thousands of workers out of poverty and help address the existing gender and race wage gaps. Furthermore, indexing that wage to the federal minimum wage would help ensure that those gains continue to be recognized year after year.

The Fair Minimum Wage Act would help restore lost value to both the federal and subminimum wage; increasing the tipped minimum wage to $3/hour this year and climbing annually until 2019, when it would reach $7.10 or higher, depending on inflation, and would then be set at 70 percent of the federal minimum wage.

While this would still fall short of a living wage, it would be a step in the right direction.
