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Push to raise minimum wage leaves out service industry

Staff Columnist

Published: Thursday, January 30, 2014

Updated: Thursday, January 30, 2014 23:01

With the living wage movement occupying many of the headlines recently, from fast-food strikes in New York City, to pushes at the state-level to increase minimum hourly compensation, to becoming a major piece of the president’s agenda in the recent State of the Union address, there is some reason to believe that the cause of the working class is finally being taken seriously within some policy circles. And yet for all the momentum, there is still a class of worker to whom no serious attention is being paid; the people who serve you your food.

While the federal minimum wage today rests at $7.25 an hour, the minimum wage for tipped workers remains at $2.13, a standard accepted uniformly and industry wide in the 30 or so states where the federal law is the only in force. Other states, like Florida, have a slightly higher wage of $4.15 an hour, though the state GOP has consistently pushed to strip the extra cushion, and the law’s future is uncertain.

The fact of the matter is that the federal standard for tipped wages has not increased since 1991, and in the 23 years since the real value of the tipped minimum wage has fallen by 36 percent, by some estimates. The result, of course, comes to the consumer as the restaurant industry, which saw record profits of almost $632 billion last year, pads its balance sheet with artificially low payroll expenditures. Meanwhile, customers’ gratuities, which were originally intended as a little something extra for exceptional service, have come to make up the preponderance of wages for wait staff.

All of this is a result of a rather tricky fight over the minimum wage that happened back in the 90s; as Bill Clinton fought Senate majority leader Bob Dole’s Republican caucus over a minimum wage hike – then from $4.25 an hour to $5.15 – the National Restaurant Association, the lobbying group for the restaurant industry as a whole, managed to secure a significant compromise excluding tipped workers from the increase. That effort, lead by failed 2012 Republican candidate a later president of the association Herman Cain, while originally considered a temporary solution, has since solidified into settled policy.

This low minimum wage may not be a problem for workers at classier joints; the more expensive restaurants often cater to wealthier customers, who in turn are able to pass on a healthier gratuity to the staff, who themselves can often make a relatively comfortable living. The issue rather devolves on the career wait staff working at lower-quality or out-of-the-way sorts of places where tips are infrequent or uneven - the sort of workers to whom a couple dollars an hour extra at full time, or around $4,000 dollars more a year, can be a lifesaver.

There are protections written into the law for the times when a waiter doesn’t quite make up to minimum wage with tips alone; all wait staff have the right, for example, to demand their employer make up the difference between their wages after tips and the federal minimum. However, this is by no means automatic, and requires the wait staff themselves to compute their hours on a week-by-week basis. And, besides, restaurant owners aren’t exactly spreading this info around.

Recently, a couple of bills have been authored in Congress to remedy this issue; Tom Harkin, a Democrat from Iowa, has introduced a measure that, along with raising the minimum wage to $9.80/hr and tying further increases to inflation, would raise tipped compensation to $6.86/hr and set it at 70 percent the Federal standard wage. This is a start, but GOP control of the House, and that party’s close industry ties, makes passage in that chamber seem unlikely.

The more salient issue is, of course, one of a living wage; even pushing the wages of tipped workers to the current Federal level may not be enough to lift career wait staff out of poverty, with living wages in places like New York City being nearly double the Federal minimum. The creation of a living wage for most people will require a complete change in the way that we view labor in this country. The president, with his speech on Tuesday, seemed to articulate a labor-centric vision for his next few years, but with the restaurant industry now nearly 10 percent of the economy and one of the fastest growing sectors for job growth, it is important that we not, again, forget these vulnerable workers.

And until things change, please, remember to tip your waiter.

 

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