Minimum Wage for Tipped Workers hasn’t Gone Up in 23 Years

Monday, July 14, 2014
(photo: Paul Sanoya, AP)

With the push to raise the federal minimum wage to $10.10 an hour, there has been much focus on the current wage of $7.25, which has been in place since 2007. But tipped workers, such as waiters and waitresses, have been waiting for a minimum wage increase since 1991, and they’re getting only $2.13 an hour.


When the tipped minimum was last raised, it was set at half the regular minimum of $4.25 an hour. But while the regular minimum has increased somewhat regularly, the tipped wage has not, thanks to efforts by the National Restaurant Association, a lobbying group for restaurant owners. Now tipped workers’ wage is only 29.4% of the regular minimum. If it had been raised to account for inflation alone, the tipped minimum would now be $3.72.


The effect is that tipped workers are almost twice as likely as other workers to live in poverty, according to a report by the Economic Policy Institute (EPI).


Other findings by the EPI:


  • Two-thirds of tipped workers are women, and those workers are disproportionately young. However, most are at least 25 years old, and a quarter of them are at least 40.
  • Forty-six percent of tipped workers and their families rely on some form of public benefits, compared to about 36% of non-tipped workers and their families.
  • Tipped workers have a median wage (including tips) of $10.22 an hour, while non-tipped workers’ median wage is $16.48.


Restaurant owners claim they would have to lay off staff if servers’ wages were to rise. However, seven states currently mandate that tipped minimums are the same as non-tipped minimums. And according to the report, “paying tipped workers the regular minimum wage has had no discernable effect on leisure and hospitality employment growth in the seven states where tipped workers receive the full regular minimum wage. In fact, sector growth in these states has been stronger since 1995 than in the states where tipped workers are paid a subminimum wage.”


The minimum-wage increase proposal before Congress now would not only raise the regular minimum to $10.10 an hour, but it would recouple the tipped minimum to that, ensuring that the tipped wage is no less than 70% of the regular wage.

-Steve Straehley


To Learn More:

Twenty-Three Years and Still Waiting for Change (by Sylvia A. Allegretto and David Cooper, Economic Policy Institute)

The Minimum Wage For Tipped Workers Hasn’t Increased Since the Fall of the Soviet Union (by Joshua Holland, Moyers and Company)

Restaurant Owners Fight Rise in Minimum Wage for Tipped Workers (by Noel Brinkerhoff, AllGov)

Minimum Wage for Tipped Workers Hasn’t Changed in More Than 20 Years (by Noel Brinkerhoff, AllGov)


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