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February 26 2018

Why Amy Poehler Shouldn't Fight for a Hike in Tipped Minimum Wages

by Patrice Lee Onwuka

Actress Amy Poehler is lending her star power to help New York waiters and waitresses a job she held for a decade. She may want to reconsider her efforts given the harm that changes to pay could mean those workers.

Poehler is pushing Governor Andrew Cuomo to increase the minimum wage for tipped workers, which is currently between $7.50 and $8.65. She says this will not just guarantee these workers more pay, but also fight sexual harassment for women in jobs that rely on tips. 

At a rally, Poehler recounted her own experience waiting tables:

“It was my main means of income for over 10 years,” Poehler said to the crowd of servers, restaurant owners and others. “I was a white woman who had certain privileges allowed to me and I worked with very reasonable restaurant owners. But I did, like every woman in this room, deal with incredible amounts of harassment from customers and co-workers. It was a very routine way of life.”   

Poehler joins other advocates who are pushing for the minimum wage for tipped workers to catch up with the overall minimum wage which is also on the move. They claim it's needed to fight sexual harassment in the restaurant industry.

Combatting misconduct is an important goal but using tipped minimum wages as a vehicle to address it seems misplaced. There is nothing to stop harassment by patrons or other staff even when workers earn more. Furthermore, higher tipped minimum wages may actually backfire on these workers by limiting their hours, cutting their jobs, or automating their positions.

Federal law requires that tipped workers be paid at least the federal minimum of $2.13 per hour if they receive at least $30 in tips per month. It's lower than the federal minimum wage because workers earn tips based on their service to customers. This is a very fair way to ensure that wait staff provides the best dining experience for customers and represents their dining establishments well.

I had a bad experience this weekend because of a waitress who treated my husband and I like we were at McDonald's and not a nice restaurant, so it's good to know that we could send her a message through a low tip if we wanted to and communicate our dissatisfaction with management. Raising tipped wages takes an important feedback loop away from customers and rewards bad service by placing it on par with good service.

Federal law allows employers to apply a portion of tips earned toward the minimum wage, bringing tipped employees’ total earnings far above the minimum wage. If cash wages and tips don’t add up to at least the minimum wage, the employer is responsible to make up the difference.

According to National Restaurant Association, which opposes raising the tipped minimum wage:

National Restaurant Association research shows that on a national level, median hourly earnings for servers range from $16 to $22, depending on experience level. This includes median tip earnings of $12 to $17 an hour, plus a median employer-paid wage of $4 to $5 an hour.

Tipped workers are not just receiving minimum wages but exceeding them.

Will raising the tipped minimum wage help workers? In the short term, workers will see bigger paychecks, but over time businesses will adjust by lowering hours, customers may choose not to tip as much (or at all), and these jobs will be lost. 2012 research from the IZA Institute of Labor Economics concluded that raising the tipped minimum wage led to higher wages but lower levels of employment. A Census working paper finds that higher mandatory tipped wages lead to decreases in the size of tips. In addition, employment of servers increases between $2.15 per hour (or the lowest federal tipped minimum wage) to about $4.50 per hour and then and then begins decreasing. 

Hiking tipped minimum wage seems like an easy solution to boost paychecks for servers, but it could backfire as research indicates and there's no guarantee that harassment will abate against these workers. 

 

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IIndependent Women's Forum is an educational 501(c)(3) dedicated to developing and advancing policies that aren’t just well intended, but actually enhance people’s freedom, choices, and opportunities. IWF is the sister organization of the Independent Women’s Voice.​
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