- Female tipped workers experience higher levels of harassment and poverty, per a new report.
- Advocates urge action on Equal Pay Day, which marks how many 2021 days women had to work to make men’s 2020 wages.
- Bernie Sanders is one of them, but his initiative to increase the minimum wage faces intra-party resistance.
- See more stories on Insider’s business page.
Today is Equal Pay Day, which marks how many more days into 2021 women had to work to make as much as men did in 2020, and advocates are calling for an end to the tipped wage.
The tipped wage is currently $US2.13 ($3) an hour, more than $US5 ($7) less than the federal minimum wage of $US7.25 ($10).
New research from One Fair Wage, an advocacy group aimed at eliminating the tipped wage, looked at poverty rates and sexual harassment among female tipped workers. Broadly, the report found that women tipped workers were more likely to have been harassed – and to have been harassed more frequently – than counterparts who aren’t tipped. The pandemic has only worsened that, with female tipped workers reporting tips are down and harassment is up.
Advocates include legislators like Senator Bernie Sanders, and figures like Gloria Steinem and Amy Schumer. Many women leaders signed on to a letter this week calling for an end to the subminimum tipped wage.
In a brief on the tipped wage, One Fair Wage highlighted that, of the around 5 million tipped workers in the country, two-thirds are women. In states where the tipped wage is the same as the minimum wage – called one fair wage states – the wage gap is smaller for restaurant workers, and the poverty rate for female tipped workers is far lower.
The impact is particularly pronounced for women of color in tipped positions. According to One Fair Wage, in subminimum wage states, 23% of female tipped workers of color live in poverty, compared to 14% in states where the tipped wage is the same as the minimum. A February analysis from the National Women’s Law Center found that poverty was 34% lower for Black women tipped workers in one fair wage states.
In a press call, Melanie Campbell, the president and CEO of National Coalition on Black Civic Participation, and the convener of the Black Women’s Roundtable, said both pay equity and sexual harassment are amplified for women of color, particularly for Black women.
“In terms of pay equity, Black women tipped workers earn almost $US5 ($7) an hour less than their white counterparts,” Campbell said. “That’s because Black women are segregated into casual restaurants, as opposed to fine dining, where they earn less in tips; and because, even when they work in fine dining restaurants, customer bias results in Black women getting tipped less for the same service.”
The call to end the tipped wage comes during a revitalized push for a minimum wage raise
Amidst the continued minimum wage debate, raising the tipped wage has been a sticking point for some. Some of the moderate Democrats who opposed the inclusion of the Raise the Wage Act in the recent stimulus have cited its reforms to the subminimum wage as a reason for hesitancy; the bill would bring the subminimum wage gradually up to $US15 ($20) by 2027.
A recent report from Morgan Stanley Research found that the restaurant industry “is set to be the most impacted by a significant increase in the federal minimum wage.” The report also said a “worst case scenario” would be increasing the federal minimum wage to $US15 ($20) an hour while eliminating the tipped wage; they projected that would shrink profitability for restaurants and push up prices to an intolerable level for diners.
However, some research points to the opposite result: An analysis from the left-leaning Economic Policy Institute found that one fair wage states have actually had more restaurant growth than other states, with both the number of full-service restaurants and people employed in them growing.
“If you were to ask me what the most pressing economic problem is in this country today, I would tell you that it is low wages. That’s what it is,” Sanders said on the press call. He said raising the minimum wage wouldn’t solve every problem, but that it’s both an important economic and moral step forward.
“I know there’s a lot of talk about equal pay for equal work,” Sanders added. “If that’s the case, maybe we want to raise the tipped wage.”