Waiters, like all tipped workers, receive only $2.13 an hour minimum wage in 18 US States, including in my home state of Virginia. Including their tips, employers are legally required to pay them the (paltry) federal minimum of $7.25, but employers often fail to do this. The $2.13 rate was set twenty-four years ago in 1991, which was a small increase from $2.01 an hour in 1981. The federal minimum wage (which is still way to low and in real value far lower than it was in the 1960’s) has gone up several times in the last quarter century, but servers are still earning the “quaint” rate of $2.13 an hour, a rate that would not even cover their street parking driving into work.
Such a low rate makes tipped workers’ poverty in Virginia and other stingy states twice the rate of those in states where they are paid a full minimum wage plus tips. And guess what, the restaurant business is doing just fine in California, Nevada and the other full minimum-wage states.
Furthermore, tipped workers have such a variable income — as well as variable scheduling (from the same employer that decides whether to actually pay them $7.25 or to illegally pay them sub-minimum wage) — that they often do not know whether they can pay their rent one month to the next.
It’s time to rectify this injustice now.
Guest: David Cooper, Economic Analyst at the Economic Policy Institute in Washington, DC (and a former tipped worker)
Read his published study here.