Working for Tips Is a Path to Poverty
Ever so slowly, a consensus that the minimum wage must be raised significantly is taking hold in America. But one group of workers could still be left behind: tipped workers, who, a new study says, are even more impoverished than minimum wage-earners.
The new report, from the Community Service Society, focuses only on workers in New York state, but it offers some insight into the reality of the tenuous economic position of those who depend on tips to make a living. It ain't all strippers rolling in $100 bills. It's restaurant workers, and hotel workers, and bartenders, whose take home pay rises and falls based on how generous and/ or drunk you may be in the moment you interact with them. Tipped workers are paid significantly less than minimum wage hourly, with the idea that they'll make up the difference in tips. This ridiculous handout to business owners should be illegal in and of itself; that is a topic for another day. Here, though, are the numbers for tipped workers:
Overall, the CSS report found that New York's tipped workers earn, on average, significantly less than the workforce as a whole even when including their tips. For example, one out of five tipped workers in New York State makes less than the current state minimum wage of $8.00 an hour even when including tips. Thirty percent of tipped workers in the state earn less than $8.88 an hour, which for a full-time, year round worker translates to just $18,470 dollars annually, not enough to keep a family of three out of poverty.
The report finds that those who work for tips are "more than twice as likely" to live in poverty as those who work for regular wages. Median earnings for tipped workers are only around 3/5 the earnings of non-tipped workers. And lest anyone trot out the "it's all teenagers" trope about these workers: the vast majority of them are over the age of 25, and 44% are "either the head of a household or a spouse."
Mandating that tipped workers be paid minimum wage would be a good first step. Raising the minimum wage would be a good second step. Until then, tip well.
