In mid-June, Washington, DC, voters didn’t just mark a ballot in a local-government primary. They also marked an important step forward for some of the district’s most economically vulnerable workers: those who rely on tips. Residents approved a measure that, if implemented, would require tipped workers to be paid the minimum wage guaranteed to everyone else. In DC, that’s $15 an hour by mid-2020.
District of Columbia voters are not the only ones who have sought this basic standard of economic fairness for waitstaff, hotel employees, manicurists, car-wash workers, and bartenders. Eight states—Alaska, California, Hawaii, Minnesota, Montana, Nevada, Oregon, and Washington—have a single minimum wage, whether workers earn tips or not. But in the rest of the country, tipped workers can be paid as little as $2.13 an hour, so long as their tips bring up their hourly wage to the federal minimum of $7.25. That makes tipped employees heavily dependent on gratuities to get by. For waitstaff and bartenders, tips make up more than half their income.
That sort of dependence has a damaging effect on workers’ financial well-being. In states where tipped workers are paid only $2.13 an hour, nearly one in five waiters and bartenders lives in poverty; in states where they’re assured the full minimum wage, about one in 10 does. Yet there’s no discernible difference in poverty levels for non-tipped workers between these states; the lower wage appears to be the culprit.
Part of the problem is that while employers are supposed to make up the difference if hourly pay and tips fall below minimum wage, many simply don’t. An audit of full-service restaurants conducted by the Department of Labor between 2010 and 2012 uncovered 1,170 violations of the rule and recouped $5.5 million in unpaid wages.
Some tipped workers have objected to requiring a higher base wage because they feel they earn a better living through tips. But a higher wage doesn’t mean that customers won’t tip—in fact, when there’s wage equity, it appears that servers do indeed make more money. Tipped workers in states that require the full minimum wage earn 15 percent more per hour, factoring in both base pay and tips, than those in states that mandate $2.13 an hour. Nor has restaurant employment suffered in states that have abolished the lower tipped wage.