Tipping Point: A Step Towards Unfreezing Tip Workers’ Wages

Thankfully the federal minimum wage has been increasing for most workers over the last several years and is set to reach $7.25 per hour this summer. It’s still far from adequate and several dollars less than it was in the 1960’s.

But left out of the picture are the servers, bartenders, and all other workers who depend on tips for their wages. That’s because tipped workers have been excluded from minimum wage increases. Their base wage has been frozen at $2.13 per hour for the last 18 years.

Not surprisingly, tipped employees are typically low-income and poverty rates for these workers are three times the national average for all workers. Throw in the current economic downturn and tipped workers’ wages are stagnating, if not declining. Customers just aren’t as generous to their waiter when they’re feeling the squeeze themselves, if eating out at a restaurant at all.

Fortunately, legislation introduced yesterday in Congress would help restore tipped workers’ wages to more adequate levels. Congresswoman Donna F. Edwards (D-MD) is leading the effort to pass the WAGES Act (Working for Adequate Gains for Employment in Services Act), H.R. 2570.

The bill increases the minimum wage from the current rate of $2.13 per hour incrementally over the next three years, peaking out at $5.50 per hour by 2012.

Given that restaurant workers have been some of the most hardest hit by the current economic crisis and that minimum wage increases are proven to significantly boost consumer spending, the introduction of the WAGES Act is a step in the right direction and well-timed.

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