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Eliminate the Tipped Minimum Wage

March 28, 2015

The time has come to eliminate a separate minimum wage for those workers who currently get a major portion of their income via tips. There is no reason why anyone should work long hard hours at a job only to depend on the largesse of customers to provide the money needed to provide for themselves and their families. The nature of the work they perform is not less difficult, stressful or skilled than that involved in many other jobs subject to the federal, state and/or local minimum wage.

Who gains from having a lower wage for some workers than others while expecting the difference to be made up by satisfied customers in the form of gratuities? Mainly the owners of establishment allowed by law to pay such low wages – primarily restaurants. Not all restaurants, either. Ever see a tip jar at a McDonald’s or other fast food establishment? No. Those workers must be paid at least the minimum wage required by law for most other lines of work. Most of us think even those restaurant workers are grossly underpaid, given that the federal minimum wage of $7.25/hour is not enough for a person to live on working fulltime – let alone support a family.

The fact that these lower paid service sector jobs have come to predominate the job market with the loss of better-paying manufacturing jobs to workers in other countries  means many find themselves being squeezed into less desirable jobs with lower pay and fewer (if any) benefits in the form of paid sick leave, vacation time, health care, etc. This creates a situation where people are being forced to work tougher jobs, for lower pay, than affords them the opportunity to improve their financial circumstances and provide anything more than a bare minimum standard of living for themselves and their dependents. Exempting a substantial number of people from the protection afforded by a minimum wage which at least purportedly provides a livable income for those people willing and able to perform the work means that much more competition for better paying jobs – especially when better jobs aren’t available. It drives overall wages down. Without a tie-in to living costs, proprietors are able to reap in higher profits at the direct expense of the workers.

By making the livelihood of restaurant servers a voluntary transaction, restaurant owners can post a menu with prices that do not accurately value both the food being served AND the work going into preparing and serving it. That can’t happen when you take your car in for service by a mechanic, have your bathrooms cleaned by a custodian or any other number of services rendered on your behalf – including buying a Big Mac and fries. That is the kind of exploitation of workers by employers that labor laws and regulations are designed to prevent. True, the possibility exists that these servers may make more in tips than their counterparts at a fast food restaurant can make without them. Indeed, who would work those jobs at all, if that possibility didn’t at least exist? But many may not, as well. In any event, they cannot count on that voluntary income in the way that other hourly workers can.

In this time when income and overall economic inequality have become such obvious shortcomings of our economic system, vestiges of an outdated model for compensation of some employees as demonstrated in a multi-tiered wage structure that artificially keeps wages for many hard-working individuals lower than those of others needs to be done away with. When I go to a restaurant for a meal, the price of that meal should reflect the true cost of providing it – not a reduced price that leaves out what the workers providing that meal require to feed themselves. Workers should not find themselves in the position of just hoping that customers will pay more than their tab just so they can provide their own families with sustenance, shelter and clothing. The time to end this policy of providing employers in this particular line of business with an unfair advantage in treating employees has come.

Some employers at establishments which are exempted from the normal minimum wage already pay employees more than that wage. Some feel paying less is morally wrong. Others may have decided or experienced that paying and treating employees better than the low standards allowed by the law is actually good for business as well. Including true labor costs in the price of the meal also takes some of the pressure off well-meaning customers who may not know how to adequately tip. Perhaps in the short run, some businesses will fail as a result, or employ fewer people, but at least the people employed will be better compensated for their efforts.

The way Congress has been operating under Republican leadership of late, just getting a livable wage for people currently served by existing minimum wage legislation may seem like a pipedream. States with Republican legislatures continue making life more difficult for organized labor and hence workers in general, taking pains to make every aspect of working life in this society more difficult for the workers and more profitable for shareholders and management. There are probably more elected Republicans in office who think that eliminating the minimum wage altogether would be preferable to raising it to a level that would decrease poverty than there are who see the value of an economy that serves the needs of all rather than just a select few.

In order for our society to become more fair and just, it needs to become more equitable. Ensuring that jobs exist which enable all to earn a living that will provide for at least a minimally adequate level for all needs to happen before we start deciding how to divide up the excesses. Rather than giving executives bonuses which exceed the annual income of untold numbers of minimum wage employees, perhaps our society, as well as our economy, would be better served by raising up the wages of lower paid workers so that they no longer need government assistance just to survive. Perhaps the workers who provide the labor that results in the record-breaking profits that many businesses are achieving of late should be sharing more fully in those profits, rather than losing out to the shareholders in the form of low-tax dividends they do nothing to earn.

A good place to start if we desire to make our economy and society more fair and just would be to stop making excuses for the excessive and growing inequality our government has been aiding and abetting for decades. Stop the efforts that lower the overall standard of living for the bulk of the population by enabling the rich to get richer at the workers’ expense. Give workers more of a say in corporate governance and the workplace in general, and treat them as equal human beings, not just a cost on the way to a bottom line that means less for them and more for those at the top. Wages and salaries for all should be livable. All jobs should enable one to live with dignity and honor. No one should have to work for less than needed to survive. Each should be fairly compensated for their work.

“Right-to-Work laws are designed to lower wages for most workers. Look at the states that have them and see if they are doing that. Having low minimum wages, or having groups of people who have a lower or no minimum wage does the same. There is an increasing number of states that now have minimum wages above the federal minimum. Some localities have done the same. There has been no decline in employment in these states, anymore than there has been an appreciable increase in employment in newly right-to-work states. Any politician who proposes policies to decrease worker and workplace protections or lower wages will not get my vote and shouldn’t get elected. They do not serve the interests of society as a whole. As long as they continue to be elected, our government will remain little more than a rubber stamp for Wall Street and the big corporations. The state of this country today illustrates that doesn’t work very well for most of us.

Further Suggested Readings:

If You’ve Ever Been A Server In America… THIS

Smart Reasons to Eliminate Tipping So Everyone Wins

Want to Know If a Restaurant Exploits Its Workers? There’s an App for That

Tipped Workers Score A Victory In New York In Fight For Better Pay

Minnesota House committee votes to lower minimum wage for some workers

Why Tipping Should Be Banned

New Restaurant Gets Rid Of Tipping, Pays Every Employee $15 An Hour

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2 Comments
  1. Florence nee Fedup permalink

    Many employers would love such a system here.

    Like

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