Some might think David Cooper doesn’t know much about grunt work or hourly pay. He works in the white-collar world as an analyst with the Economic Policy Institute, after all. But Cooper’s quite familiar with real-world work, too, he says in a new video series; in fact, before he moved up to his position with EPI, he worked there himself.
“Before I started economics, I actually worked for tips. I waited tables, I tended bar, I even parked cars as a parking valet.”
Such tip-reliant occupational fields are the theme of EPI’s video series, ?Tipped Worker Facts? (see videos below). For example, not many know that there are actually two different federal minimum wage levels ? the $7.25 per hour for most fields, but only $2.13 for waiters, bartenders, barbers, hairdressers, and other tip-earning positions.
Many assume that tipped employees are guaranteed the minimum wage for all their working hours, Cooper says, and that restaurants and bars have to pay their workers the difference if their tips don’t?amount to the federal minimum of $7.25 an hour. That’s only the case if a worker receives less than $30 per month in gratuities, though. A waitress can work 40 hours a week at your local diner, but still earns nothing more than $2.13 an hour in regular pay if she gets just $31 in tips for the entire month.
(There are seven states that set minimum wage to be the same for both tipped and non-tipped workers, though: Alaska, California, Minnesota, Montana, Nevada, Oregon and Washington).
You can see all four of EPI’s videos on the problems for tipped workers below, but first check out the 10 things everyone should know about their different minimum wage rate, which the AFL-CIO also notes on its website:
- The minimum wage for tipped workers has been separate from the regular minimum wage since 1996. Back then, tipped minimum wage was half of the regular minimum wage; today, it’s only 29.4 percent.
- Customers, not employers, are the ones relied upon to make up that $5.12 difference between the two minimum wage rates, and through their generosity in tips.
- A 60-percent majority of all tipped workers are in the food service industry. That’s one of the fastest growing occupational fields in the country, too ? up 86 percent since 1990, while all fields grew only 24 percent in that same time period. That means the negative effects of such low wages on the economy overall are growing, too.
- Two-thirds of all who are employed in tip-reliant occupations are women.
- While many assume such occupations are filled by kids and college students, a majority of tipped workers are over 25 years of age. In fact, a quarter of them are over 40.
- The pay is low even when you add in the tips. The median hourly pay for tipped workers is $10.63, for example, but the average rate for all fields is $16.48 per hour.
- More than one out of every eight tipped workers lives in poverty (12.6 percent). For all who are employed, though, the poverty rate is only 6.5 percent.
- In the seven states that raised tipped minimum wage to the same $7.25 federal rate, the poverty rates for tipped workers is substantially less.
- Almost half of all who work for tips ? 46 percent ? require public assistance such as food stamps, welfare, and Medicaid, whereas only 35.5 percent of those in non-tip occupations need those benefits. That means the low wages earned by tipped workers wind up costing others, too.
- A higher minimum wage for workers in tip-reliant occupations will not impair job growth, despite the claims of some conservative groups. In fact, in the states that provide tipped workers with the $7.25 minimum, job growth in those occupations has increased at a higher rate than other states.
Check out these brief-but-informative videos from EPI below:
Part 1: How Tipped Workers Get Paid
Part 2: What’s Wrong With America’s Tipping System?
Part 3: What Is Life Like At $2.13 An Hour?
Part 4: A Simple Way To Fix Tipping
Do you sympathize with tipped workers? Have you worked for tips yourself? Share your comments on Liberal America’s Facebook page.
