In 1991, members of the U.S. Congress were paid $101,900 annually. Today, they are paid $174,000 per year. In 1991, Americans who depend on tips to earn a living were guaranteed a federal minimum wage of $2.13 per hour in pre-tip income. Today, their pre-tip federal minimum wage is still $2.13 per hour. Why have federal laws on restaurant workers’ minimum wages remained unchanged for 22 years, while the salaries of the people who determine minimum wages have increased 71 percent? The question has become more relevant since President Barack Obama proposed in his Feb. 12 State of the Union speech to increase the federal minimum wage from $7.25 per hour to $9 per hour by 2015 and index post-2015 changes to cost of living adjustments. Obama’s proposal to raise the minimum wage for the first time since 2009 received a lot of attention, but news reports rarely, if at all, mentioned the pay of tipped employees. In, fact the tipped minimum wage has remained stagnant since 1991 while the minimum wage has increased from $4.25 per hour during that same timeframe. That’s partly because many people believe that The Fair Labor Standards Act’s provisions for tipped employees is being enforced. The law requires employers to pay the difference between $7.25 per hour and the sum of $2.13 per hour and the amount tipped employees receive from customers per hour. But the law isn’t being enforced, according to organizations such as the National Employment Law Project that are lobbying for an increase in the tipped minimum wage. In fact, a 2009 report by the U.S. Department of Labor’s Bureau of Labor Statistics concluded that almost 2.6 million Americans were being paid below the federal minimum wage. Tipped employees are less likely to receive the federal minimum wage because they must tell their employers that customers haven’t tipped them enough, advocates of a higher pre-tip minimum wage told The Huffington Post. The National Employment Law Project’s legal co-director, Paul Sonn, told The New York Times that tipped employees’ poverty rate was twice as high as other employees. “The frozen tipped worker minimum wage is dragging down pay in the fast growing service industries where millions of working adults today spend their careers,” Sonn added. As the chart shows, the minimum wage and the tipped minimum wage rose together until 1996. That year, though, Congressional Republicans wouldn’t support a minimum wage hike unless the minimum wage for tipped employees remained the same. The change was the result of intense lobbying by the National Restaurant Association (NRA), which was led by 2012 GOP presidential candidate Herman Cain, according to The Huffington Post. The NRA continues to favor restaurants paying tipped employees a minimum wage of $2.13 per hour. It says that “most” waiters and waitresses earn more than $7.25 per hour and a minimum wage hike would “force employers to redirect payroll dollars away from employees who do not earn tips,” NRA spokeswoman Katie Niebaum told The Huffington Post. Obama’s plan to raise the minimum wage spurred restaurant workers to rally in Washington, D.C., on Feb. 13, the day after the State of the Union speech, for an increase in their minimum wage. Organizations like the Restaurant Opportunities Center support U.S. Congresswoman Donna Edwards’ (D.-Md.) plan to raise the tipped employees’ minimum wage from $2.13 per hour to $3.75 per hour within three months and index future changes to cost of living adjustments. Obama didn’t mention the wage scale of tipped employees in his State of the Union speech, but he supports an increase in their minimum wage, reports The Huffington Post. Since 1996, numerous states have raised tipped employees’ minimum wages. Currently, six Southern states have no minimum wage for tipped employees, 12 states have a tipped employees’ minimum wage of $2.13 per hour, seven states have a tipped employees’ minimum wage between $2.14 and $2.99 per hour and five states have a tipped employees’ minimum wage between $3 and $3.74 per hour. Consequently, Edwards’ plan would increase how much businesses have to pay their tipped employees in 30 states. However, the restaurant industry’s lobbying is continuing. They are trying to persuade lawmakers to reduce the tipped employees’ minimum wage in Arizona and Florida, two states whose tipped minimum wages are among the highest in the nation.
|