Throw Your Servers a Few Extra Bucks—Two States Are Trying to Lower Their Pay
Everyone has a different method for deciding how much to tip. The efficiency junkies use an app, the proud insist on making the table wait while they trudge through mental math, and the brave just guesstimate and throw down a semi-arbitrary wad of bills, its thickness loosely dependent on how quickly their Diet Coke was refilled. But would you rethink your gratuity if you knew that the server was only making $2.13 per hour?
That’s the federal minimum wage for tipped employees, and it has remained static since 1991.
Since then, seven states have raised the tipped minimum wage to be on par with the standard minimum wage: Washington, California, Oregon, Nevada, Minnesota, Alaska, and Montana. But lately, some politicians have been pressuring them to lower it.
In late April, the state House of Representatives in Minnesota signed a bill that would lower the minimum wage for all employees who make more than $4 per hour in tips. The legislation would also block individual cities from increasing the minimum wage.
One month earlier, California State Assemblymember Tom Daly introduced a bill that would keep the tipped minimum wage at $9 per hour while the state minimum wage increases to $10 per hour in 2016.
Counterintuitive as it may seem, Restaurant Opportunities Center United cofounder Saru Jayaraman thinks these bills are a sign that low-wage workers’ rights are gaining momentum.
“What we’re seeing is a pushback by the National Restaurant Association,” she said. “There is a trend of minimum wages rising everywhere, and it seems like the restaurant association is really going after the seven remaining states.”
The NRA is the main trade association for the $683 billion restaurant industry, and according to the Center for Responsive Politics, it spent $2.71 million on lobbying in 2012. The NRA did not immediately respond for TakePart’s request for comment.
Many criticize cities like Seattle and Oakland, California—which raised its minimum wage to $12.05 an hour in March—for leaving small businesses in the lurch. Within the first week of Seattle’s announcement to raise the minimum wage to $15 by 2017, Forbes published a piece outlining how the new wages would increase unemployment and force restaurants out of business.
The median income for tipped workers in America is $10.22 per hour, compared with a median income for all workers of $16.48. Per Economic Policy Institute statistics, that wage gap makes tipped employees twice as likely to fall below the federal poverty line, and three times as likely to rely on federal assistance, as non-tipped employees.
But several restaurants have gotten on board with eliminating tips and paying higher base salaries. Bar Marco in Pittsburgh, for example, announced in January that it would be ban tipping and pay all full-time employees at least $35,000 per year. Restaurateurs Tom Colicchio, David Chang, and Danny Meyer are also considering abolishing the traditional tipping model and adopting higher wages across the board.
According to Jayaraman—and despite the bills being introduced in Minnesota and California—the national trend is shifting toward paying restaurant workers higher wages. To that end, a piece of legislation was proposed Thursday by Sen. Patty Murray, D-Wash., and Sen. Bobby Scott, D-Va., that would completely eliminate the subminimum tipped wage and also raise the federal minimum wage to $12 by 2020.
“The progress we’ve made in moving the conversation—even restaurants moving toward eliminating tipping altogether—all of that momentum is just incredible,” Jayaraman said.