The United States has two so-called minimum wages, and one is more minimum than the other. Last week, Democratic presidential candidate Hillary Clinton called for the end of the sub-minimum wage for tipped workers — such as waiters, car washers, and manicurists — which remains as low as $2.13 an hour in more than a dozen states. (By contrast, the federal minimum wage for non-tipped workers is $7.25.)
“It is time we end the so-called tipped minimum wage,” Clinton said Wednesday at a rally at the Javits Center with New York state governor Andrew Cuomo. “We are the only industrialized country in the world that requires tipped workers to take their income in tips instead of wages.”
The federal tipped wage is a calcified piece of labor law — frozen at $2.13 for more than two decades — little-known outside of the restaurant industry, but acutely known by servers at chain restaurants, including large ones like IHOP, Applebee's, and Olive Garden. Clinton called the lower wage floor, which varies by state, "shameful." Advocates and law-makers have pointed to its roots in slavery.
Though the tipped wage has gotten little political attention in the recent past, it's bubbling up this election season with the help of some famous restaurant owners, such as Danny Meyer, who are voluntarily eliminating tips at their businesses, while raising base wages for workers. Democratic presidential candidate Bernie Sanders is also in favor of eliminating the tipped wage.
Clinton has previously spoken out against the tipped minimum. At an event last September, she said, "The idea is, you’re supposed to make up the rest [of your wages] in tips. And you know what happens? That money doesn’t get to the people who earned it. Wages are actually stolen. So we’re going to end that."
By law, employers may pay tipped workers a wage lower than the federal minimum as long as workers take home enough in tips to make up the difference. If they don't, employers are required to make them whole — but a White House study and the Department of Labor have found that this doesn't reliably take place.
As a result, workers who live off tips face an unpredictable source of income.
Christin Fernandez, spokesperson for the National Restaurant Association, the largest industry trade group, disputes this account. "[U]nder the Fair Labor Standards Act, no one in the restaurant industry should be making a 'sub-minimum' wage," she said, citing research from the NRA finding that average servers make $16 to $22 an hour. (The Bureau of Labor Statistics puts the mean wage at $10.40 and the median at $9.01.)
A spokesperson for the International Franchise Association, another major trade group that has opposed minimum wage increases, had no comment on the tipped wage.
New York State Governor Cuomo has vocally supported raising the minimum wage for workers to $15 an hour in New York, but his proposal, which may be amended until this Friday, leaves the tipped sub-minimum untouched. In New York, the tipped minimum is $7.50.
Worker advocate Saru Jayaraman, co-director of the Restaurant Opportunities Center, says Cuomo could amend the proposal to include tipped workers in the raise, as seven states, including California, have previously done.
"By being the first state on the east coast to eliminate the two-tiered wage system and phase it out completely, as Hillary Clinton and the White House and Democrats in Congress are calling for, New York could be a progressive leader," she said.
In January, a group of 100 anonymous restaurant owners signed a letter to Cuomo asking him to exclude tipped workers from any proposed raise in New York. He hasn't commented publicly on any plan to amend the proposal. The governor's office did not respond to a request for comment on the exclusion of tipped workers from the raise.
Jayaraman said the two-tier wage system disproportionately affects women and people of color. "The calculus since the New Deal has been, 'let's leave out the tipped workers' [from wage increases]," she said. "Our point is that that's the same calculation that's been made for a hundred years. Maybe there's an assumption that this will be taken care of at a later date, but that's never happened."
In recent years, support for eliminating the tipped minimum wage has grown, with legislators in Rhode Island, New Hampshire, and Washington, D.C. advocating to raise or abolish it, as well as some employers.
"With over 1 million restaurants nationwide, all with varying concepts, restaurateurs should continue to have the freedom to choose what works best for their business and their workforce," said the NRA's Fernandez. "[W]hether that's keeping with the current tipped model or trying something new."