Giving Workers a Good Tip and a Living Wage

Imagine your wages frozen for two decades at $2.13 per hour. No, I am not talking about a Third World sweatshop. The kid who put your groceries in the car, the waitress who served you dinner at your favorite restaurant last week, the guy or girl who vacuumed out your car at the car wash. All these are tipped workers and their wages in the United States have been frozen for 20 years.

Passage of The Wages Act (HR 631) would make progress in closing the gap between tipped workers, many of them young, and all other workers.

A few days ago, amongst the food, fun and festivities of Martin Luther King Day, in Atlanta, I spoke to the celebrants about HR 631. Many were astounded that tipped workers make so little base pay. But many others know the truth all too well. One young man promptly corrected me when I mistakenly said “wages frozen at $2.16.” He said “$2.13, I work at the Waffle House.”

With 13 million workers the restaurant industry employs a huge number of young people. This group of tipped workers has been devastated by stagnant wages and the current economy. Nearly 15 percent of all waiters and waitresses live below the federal poverty level, compared to less than 6 percent of the workforce as a whole.  The impact on people of color is significantly worse. According to the Census Bureau, 22.3 percent of African-American tipped employees and 18 percent of Latino tipped employees live in families below the poverty level

While employers are supposed to make up the difference between tips and the minimum wage, most workers rely on their base wage as their source of steady income. Tips fluctuate based on the economy, season and shift.

Charmaine Davis, the director of the Atlanta Chapter of 9to5, a community organization that supports economic justice in the workplace says, “This legislation would restore the value of the minimum wage for tipped workers at 60 percent of the federal minimum wage.”

Both of my sons have worked tipped jobs in the food service industry at various times during their college and high school years as have I.  

I remember getting fired as a barmaid when the proprietor found out I was underage. Meeting new people and never knowing what the customers would be like from day to day was an aspect me and my youngest son enjoyed; however we all agreed the pay was pitiful. Our family worked those jobs at some of the most financially challenging times of our lives. For many in the food service industry this is a life-long occupation. Housing, food, utilities, clothing, education, transportation and all the other necessities of life, depend on fluctuating tips and a $2.13 per our job.

If passed, the Wages Act, introduced by U.S. Rep. Donna Edwards (D-Md.) will:

  • Raise the minimum wage of tipped employees from the current level of $2.13 per hour to $3.75 per hour three months after enactment.
  • Raise the minimum wage of tipped employees to $5.00 per hour one year after its enactment
  • After the second year, restore the tipped minimum wage to its original rate of 70 percent of minimum wage (as enacted during the 1930s) but no less than $5.50 per hour

Prior attempts to raise the hourly rate for restaurant workers have been unsuccessful. The original Wages Act, HB 2570, was introduced in 2009. It died in committee.

Members of Congress have not frozen their own wages. In 1989, Congress passed an amendment allowing for automatic raises, unless they specifically vote to reject a raise for that given year.

As Dr. King said, “If you want to say that I was a drum major, say that I was a drum major for justice.”

Be a drum major for justice, support the Wages Act.

 

In the interest of full disclosure I volunteered with 9to5 to collect petition signatures for the passage of HR 631 at the 2012 Dr. Martin Luther King National Day of Service in Atlanta.

 

5 thoughts on “Giving Workers a Good Tip and a Living Wage

  1. Great article. I applaud your promoting this cause for the tipped workers. When our daughter worked at food service jobs we became acutely aware of the pay, or lack of it made by tipped workers. I wish Rep. Donna Edwards bill all the best of luck. It’s not going to be easy, especially with our Do Nothing GOP causus. And by the way, I’ve became a more generous tipper… 10 percent of the total bill.

    • This isn’t about GOP vs deems. This is common sense and logic. If you lower profits, a business owner will not open another business therefore no new jobs. Employees making an extra $1 an hour will not open a business and create 10+ jobs an avg small restaurant creates. But hey they’ll go to walmart and allow the rich to get richer. Hey maybe another walmart or bank can open with that extra $1 an hour an employee can make. That will be great for all of us.

      Ps 10% is stingy tip. Glad to see you are pocketing all your money and not supporting the hard working service employee you are fighting for.

  2. I am in agreement with you. When I go out to eat I always double the tip in cash for these workers. I’m sending off a letter to President Obama on just this issue that came to me while he was doing his speech. I’m appalled at this Minimum Wage Law. South Dakota has one of the poorest counties in the USA. The Sioux Indians in Ziebach County South Dakota have 60% living below poverty and have to travel 150 miles to Rapid City to find work and get wages of $2.13 per hour. I’m angered at the USA for trying to put bases on the moon before they help our people here on earth. Someone needs to get their priorities straight. I’m not a politician just a mother with a daughter in South Dakota that is a server trying to make a life for her family on $2.13 an hour. Its a joke. My only objection to your wage increase is I feel that all people in the “Service workplace” should get their full minimum wage plus tips. They should be the ones to report their earnings to the IRS. On behalf of all customers let me just say. Always, Always leave a tip. If you are unhappy with your service a 10% gratuity is sufficient, If you have an outstanding server 15-20% is now the norm.

  3. This is bs. If a restaurant tipped employee doesn’t make minimum wage the employer must pay the difference to get them there. If the employee earns in tips the minimum wage or more (which is the norm in more populated cities) the employer still has to pay the base hourly for tipped employees. In NYC, it’s currently $5 an hour. So basically if an employee makes $7.25 an hour in tips and meets the min wage, they still have to be paid an additional $5 an hour by the employer. In nyc, many service tipped employees make minimum $15 an hour and up to over $100 an hour. Yet the employer still has to pay the base + overtime + extra if they work a double if the want to earn more. The base shouldn’t be paid if an employee makes a certain amount- that amount should be determined as a “living wage”. So for example, if $10 an hour is considered the “iving wage” in NYC, an employer should be responsible for making up the difference. But if they make more in tips, the employer should not be responsible,

    In order to successfully achieve the above idea, employers should be responsible for having someone counting the tips with the staff to report PROPER earnings. Currently it’s illegal for employers in NYC to count and divvy up tip money so guess what, the overwhelming majority of tipped employees under-report their cash earnings and then taxes are not paid- hundreds of millions nationally I bet. These unpaid taxes skew industry #’s and makes everyone pity srvice employees because they think they’re making $2.13 an hour which is complete misinformation. This article is so messed up- to say restaurant employees count on the base hourly is nonsense. If you think any service employee is in it to make min wage, you’re obviously kidding yourself.

    Talk about fair share- restaurant employees should report all their tips just as the irs expects restaurants to declare all their revenue. Start paying taxes so these laws that will only slow growth will go away because the truth is, in very populated cities, service employees who work on tips make more than most people in America.

    It’s not pc to say this because there’s a lot more employees than employers hence votes for elected officials. But the higher the costs go, the more restauranteurs and entrepreneurs will get frustrated and stop growing and simply hold.

  4. Total misinformation… You are basically making people think tipped employees are making $2 an hour. First off they are paid minimum wage as their employer must makeup the difference. But if they make min wage (or at least show that they make the bare min wage as cash tipped employees magically make their cash earnings vanish), then the employer still has to pay the additional min wage minus the tip credit so basically in the states like nj, fla, etc, an extra 2.13 is paid on top of their “earnings”. So if they show they made 7.25 an hour, now you’re saying the employee deserves 9.38 an hour and in o ther states $12.25 an hour as a minimum?

    Then you want that increased to $5.50, more than doubling hourly expenses for a business. Ok no prob. Now let’s force health care on restaurants with 50 or more employees equalling approx $2500 an employee or force a $2k per employee penalty. Only 100k penalty. Sweet! Not enough right!?!??! biz owners who take the risk are still being way too greedy right. They should pay more. Now let’s raise overall min wage another $1- I mean a dollar is nothing to the fat cat restaurant owner but wait $1 x 8 hour shifts x 10 employees a day x 7 days a week is nothing right… Only $25,000 a yr. Not enough
    Service employees who work on tips aren’t treated fairly- so let’s introduce sick leave bill and potentially force all businesses to be required to give 9 sick days to every full time employee ( and by full time, we mean only 30 hours a week employees to avoid you greedy operators from trying anything funny ). Amazing right? So now when you’re going to your audition, looking for your real job and interviewing, have a test in school, or screw just call out on a slow day, you’ll be paid!!!!!! You are entitled to sick days too for our job like any Corp company that makes billions of dollars. So 9 sick days x $7.25 an hour ( soon to be $8.50 ) x 8 hours in one day only $500-600 an employee. Pocket change but wait times 50 employees and another 25-30k off the bottom line. Now we’re evening the playing field from those pesky rich restaurant owners who make too much.

    We should then audit those restaurant owner bastards, sue them for just about everything to raise their insurance costs and increase legal fees, send every agency into their business numerous times a year to fine them, raise their cost of doing business with all their expenses increasing but not allow them to increase prices because they’ll lose any competitive edge and customers simply can’t afford higher prices.

    We got them now!!! No profits but employees make more money. Congrats- employees are happy and all of you risk takers are simply an employment bank. We win

    But wait, what happens when a business owner is completely frustrated with lack of profits, employees who want even more based on time versus performance, a government that keeps tightening the noose, and all the bad news and stress that comes with running your own business? Absolutely nothing happens- no growth, less jobs, less taxes, less motivated risk takers who create. America, you are seriously biting the hand that feeds you to think restaurant owners can take any more of this. We have been dealt a bad hand and it’s time to muck and then start all over when things get really bad in this country. Maybe then lawyer politicians will start asking business owners to help make laws and regs that actually make sense to create jobs instead of force feeding job killing laws which they think are helping employees.