National Consumers League

Want to make $2 an hour? Neither do tipped workers


By Michell K. McIntyre, Director of NCL's Special Project on Wage Theft  You think your pay is low? You should check out the federal minimum wage for tipped workers - $2.13 an hour. While nearly all of the non-agricultural jobs in the U.S. must pay the federal minimum wage of $7.25 an hour, tipped workers (servers, bartenders, bussers, etc.) make the federal minimum wage of $2.13 an hour - frozen since 1991 due to the strong-arm tactics of the restaurant industry tapping down the calls for change. Employers are allowed by law to pay $2.13 an hour to tipped employees as long as tips make up the difference between $2.13 and $7.25, however surveys and interviews with workers indicate that employers frequently ignore this requirement – a clear example of wage theft. Now you may think – ‘That’s low but okay since most tipped workers are teenagers looking for pocket-money.’  That’s not true – the restaurant industry employs 10 million workers in one of the largest and fastest growing sectors of the U.S. economy. It offers some of the country’s lowest paying jobs, with little to no access to benefits and career advancement. A report, Tipped Over the Edge: Gender Inequality in the Restaurant Industry by the Restaurant Opportunities Centers United (ROC United), paints the disturbing picture of gender exploitation and abuses throughout an industry that is set to make record profits, even in this current economy. Women make up nearly two-thirds of workers in tipped occupations and are more than 71 percent of wait staff – the largest group of tipped workers. According to Terry O’Neill, President of the National Organization for Women Foundation, the gender wage gap is stark: women servers are paid only 68 percent of what men in the same job are paid ($17,000 vs. $25,000 annually) and African-American women are paid only 60 percent of what their male counterparts are paid. The poverty rate for women, in tipped occupations, is nearly three times the poverty rate for all workers. According to ROC United, ‘servers rely on food stamps at nearly double the rate of the general population’ – meaning, after serving customers food all day they can’t afford to eat. Is there any light at the end of this long tunnel and what can we do about it? There maybe some light, Congresswoman Donna Edwards has introduced a bill in the U.S. House of Representatives, the WAGES Act (H.S. 631), which seeks to raise the federal minimum wage for all tipped employees. Unfortunately, she only has 27 co-sponsors, to date, and with the powerful restaurant industry – mostly run by the National Restaurant Association (NRA) – it will be an uphill battle. For more information on the federal tipped minimum wage please check out ROC United, National Women’s Law Center, and the National Employment Law Project.