By Grace Madden
As arguments surrounding the increase of the federal minimum wage to $15 pick up steam one demographic has been woefully ignored, tipped workers. There are approximately 4.3 million tipped workers in the United States, and roughly 2.5 million are waiters and bartenders. The restaurant industry is one of the fastest-growing industries, yet every year four out of the ten lowest-paying jobs are tipped restaurant jobs. As a result, restaurant workers suffer and are 3x more likely to be under the poverty rate and 50% more likely to use food stamps. This is directly related to the tipped minimum wage, which allows restaurant owners to pay their workers next to nothing and encourages an American irony where those who feed us are unable to feed themselves.
The tipped minimum wage is extremely low, at $2.13 an hour. This rate is based on the understanding that customers supplement the wage with tips. However, this is often not the case. The first and most common misconception about tipping is that your tip always goes directly to your server. Rather, more often, your 15% tip is pooled and distributed amongst the non-managerial staff. While it is illegal for managerial staff to take any of these tips, 13% of workers nationwide report that managers regularly steal their tips. This practice makes it impossible for workers to make minimum wage and allows restaurants to pay their workers virtually nothing. This trend is consistent with restaurant payment practices in the U.S, with the Department of Labor reporting an 84 percent violation rate in employers ensuring that they make up that difference in tipped minimum wage.
Even if employers ensure fair compensation through tips, serious problems remain, namely sexual harassment in the service industry. Consider a power imbalance, where tippers have explicit control over the wages servers (⅔ of whom are female and 44% women of color) receive, and the fact that the restaurant industry has 5x the average of sexual harassment claims per worker. Minority women are also more likely to be hired for lower-paying family-style restaurants than for higher-paying fine dining which further enforces the need to receive tips as wages6. “This difference in power can create an environment where sexual harassment is tolerated, ignored, or normalized, because employees do not feel comfortable confronting others about their inappropriate behavior”
It is not a coincidence that these servers are overwhelmingly female. See how women workers in $2.13 states reported that they are three times more likely to be told by management to alter their appearance and to wear ‘sexier,’ more revealing clothing than women in equal treatment states. This evidences how managers take advantage of females by emphasizing their attractiveness in order to increase the number of customers. As a result, tipping becomes a disguised loophole for exploitation, where women must tolerate and cater to sexual harassment to earn a fair wage. The data supports this with workers who earn a guaranteed wage reporting half the rate of sexual harassment compared to workers in states with a $2.13 subminimum wage. Additionally, This can have long-lasting effects on women in the workplace who are taught early on to tolerate sexual harassment with 1/3 Americans entering the workforce through the restaurant industry and 50% working in the industry at some point according to a 2017 study by the National Restaurant Industry (the other NRA). This sets women up to experience harassment later in life as, women who had previously worked as tipped workers were 1.6 times as likely to live with inappropriate behaviors in the workplace as women who were currently employed as tipped workers.
Given these various issues, removing the tipped minimum wage and paying all workers the same rate seems beneficial. However, industry advocates rather claim this would destroy businesses, and cause unemployment and prices to skyrocket. Yet the data doesn’t support this claim. The seven states without tipped minimum wage have higher restaurant sales per capita, higher job growth in the restaurant industry, higher job growth among tipped workers, and even higher rates of tipping than the others. According to the Economic Policy Institute, more workers live below the poverty line in states where the tipped minimum wage structure is in place, compared with those living in states where employers must pay the same minimum wage to all hourly workers. The tipped subminimum wage system demeans workers and creates an environment where exploitation and sexual harassment runs rampant.