Thursday, May 29, 2014

Are tipped workers getting left behind?


As the debate over raising the federal minimum wage continues, there's a significant segment of the low-paid workforce that advocates say are getting left out of the conversation: Tipped workers.

The federal tipped wage hasn't budged since 1991, with waitresses, hairdressers and other workers who rely on tips guaranteed only $2.13 an hour. And as some states raise their minimum wages, tipped workers are left with meager increases that leave them trailing far behind other employees.

Take Michigan, which on Tuesday became the eighth state to raise its minimum wage this year. While the baseline wage will raise to $9.25 an hour by 2018, tipped workers were given a small increase that will leave them earning just 38 percent of the regular minimum wage. While some argue that tipped workers make up the difference thanks to gratuities, research has found that tipped workers are more than twice as likely to live in poverty than other employees.


Increasingly, the debate over the tipped wage is being framed as a gender issue, given that almost 73 percent of tipped workers are women, according to a study from the Economic Policy Institute.

That means that women are "disproportionately impacted by the tipped minimum wage," according to a March report from the White House. Average hourly wages for people working in tipped occupations are about 40 percent lower than overall hourly wages, the report found.


While employers are by law required to make up an employee's pay if their tips don't reach the federal $7.25 per-hour rate, that often doesn't happen, the White House report said. Failure to "top up" tipped workers' pay is "one of the most prevalent violations," the report noted.

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