Equal Pay/Fair Wage

Tipped Workers Hope for Hike in Sub-Minimum Wage

Monday, February 6, 2012

After decades of enduring frozen wages, the nation's 3.3 million tipped workers -- most of whom are women -- may receive a minimum-pay hike. This could alleviate what economist Sylvia A. Allegretto calls an under-appreciated factor in women's poverty.

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Higher Wage Benefits

"Unlike Congress, state legislatures have been more receptive to raising the sub-minimum wages of tipped workers because studies have shown that increasing the wages of tipped workers doesn't kill jobs, even during recessions, as opponents have claimed," says Marilyn Watkins, policy director of the Seattle-based Economic Opportunity Institute of Washington, a public policy center dedicated to restoring the promises of the middle class. "Indeed, higher wages benefit employers by decreasing employee turnover and improving morale and productivity."

Watkins predicts that many states will raise their minimum wage standards for tipped workers this year because of changes in the labor force. Three-fourths of the jobs added to the economy since the 2007-2009 recession have been in low-wage service sectors.

"States recognize that improving the wages of tipped workers is critical because a job should help you get out of poverty, not keep you poor," says Watkins. "More workers will be spending their careers in these industries because better-paying jobs in manufacturing and other fields are not expected to increase in the years ahead."

Madeline Talbott, chief organizer of Action Now, a Chicago-based, grassroots organization of working families that advocates for economic change, predicts that Illinois will eliminate its sub-minimum wage for tipped workers (currently $4.95 an hour) when the legislature considers a package of bills this spring to increase the overall state minimum wage from $8.25 to $10.65. Last year, a poll found that 71 percent of voters supported these changes.

State Economies Boosted

"State legislatures are more likely to pass economic bills like this in presidential election years," says Talbott. "The recent recession -- the worst since the Great Depression of 1929 -- has shown legislators that an increase of a few hundred dollars in a tipped worker's annual wage not only benefits the worker, but the state economy. Low-wage workers spend the increased funds on groceries, school supplies for their kids and other necessities that create jobs for other workers."

"Enforcement is also crucial," says Jeff Mansfield, an organizer with Restaurant Opportunities Center of New York, which was founded after Sept. 11, 2001, to help restaurant workers displaced by the attacks on the World Trade Center. "Many tipped workers are shortchanged by employers because they don't know or understand the law."

Restaurant Opportunities Center of New York has won nine campaigns against abusive restaurants totaling over $4.9 million in discrimination and unpaid wages.

If an employee's tips plus paid wages of at least $2.13 an hour don't equal the federal minimum wage of $7.25 per hour, the employer must make up the difference. However, a national study of low-wage workers in New York, Chicago and Los Angeles in 2009 found that 30 percent of tipped workers surveyed were not paid the tipped worker minimum wage.

"Tip stealing is also common," says Mansfield. "Owners and managers often take a share of tips, even though state laws stipulate that the money belongs to the service staff. Restaurant managers may also pocket fixed gratuities or customer service changes. Many workers are afraid to report these abuses for fear that they will be fired."


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Sharon Johnson is a New York freelance writer.

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I am relived that Congress is finally paying attention to this clearly obvious wage gap. I use to work as a waitress and it was a real let down when I became aware that I was making more money in a restaurant that exploits women for their appearance rather than a fine-dining establishment. However, the minimal wage level should not be the only thing that is considered when analyzing the wage gap. Men always do get better preference than women, particularly in dinning jobs. My co-worker, who was a male and has less experience than me used to get the better sections of the restaurant and used to be helped more often by the cleaning staff than most of the girl servers. This new look at wage legislation is only the first step.