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Center for Labor Research and Education

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To Tip or Not to Tip: Raise Base Wages

New York Times


Much of the conversation in the news about whether restaurants should allow tipping misses a crucial point: regardless of a restaurant’s compensation policy, all restaurant workers should receive a stable base wage that allows them to feed themselves and their families.

The Fair Minimum Wage Act of 2013 would guarantee non-tipped workers at least $10.10 an hour and tipped workers at least $7.

With over 10 million workers, the restaurant industry is one of the largest- and fastest-growing sectors of the United States economy. But it also provides the lowest paying jobs. This is largely because the federal minimum wage for all workers is $7.25, and $2.13 for tipped workers. These low wages are even difficult to sustain; my organization has lobbied consistently to keep them in place.

Most of the workers who earn the tipped minimum wage in New York and across the country are not employed by fine dining establishments like Sushi Yasuda. Seventy percent of those earning tips in America are women working at places like Denny’s and Red Lobster. Servers have three times the poverty rate and use food stamps at double the rate of the rest of the U.S. work force. In other words, the people who serve us meals cannot afford meals themselves. New research shows that over half of all tipped workers living in poverty are people of color, including blacks and Latinos — pivotal voters in the 2012 elections.

Tips fluctuate from shift to shift, but rent and bills are constant. All restaurants should provide workers with a stable base wage that allows them to meet their basic needs, whether or not tips are accepted. Fortunately, there is good news on the horizon for restaurant workers. The Fair Minimum Wage Act of 2013 would guarantee non-tipped workers a minimum wage of $10.10 and tipped workers a minimum wage of at least $7. The bill would go a long way toward ensuring that all workers — from Sushi Yasuda to IHOP — would have a secure base wage to feed their families, as they feed us daily.