Undoing the Racist History of the Tipped Minimum Wage

Shutterstock (Oksana Mizina)

Our nation is currently experiencing a destabilizing level of economic inequality, the highest in almost 100 years. In 2015, the top 1% of families in the US earned, on average, 26.3 times as much income as the bottom 99%. The gap between the top 1% and everyone else has only grown since then. 

On July 18, the US House took the first step to combat this inequality and establish basic parity for working Americans by passing the Raise the Wage Act, which would raise the minimum wage to $15 an hour by 2025, and for the first time in American history eliminate the sub-minimum tipped wage. 

Eliminating the sub-minimum tipped wage will eliminate a damaging remnant of American slavery. The practice of paying workers primarily through tips is rooted in the Reconstruction Era, when employers began offering former slaves no-wage jobs with the promise of tips, giving employers a legal excuse to avoid paying black Americans for their labor. In the following decades, the racist practice was written into law, allowing this exploitation to continue unhindered.

The often-overlooked racist past of this practice has serious repercussions for millions of American workers to this day. Workers in sub-minimum tipped wage jobs are disproportionately women and people of color, and restaurant workers are more likely to live in poverty than the general population. Tipped workers depend on an insecure source of income to support themselves and their families. Because their wages are unreliable and inconsistent, and they rely on tips from customers to survive, these workers are far less likely to report instances of bias and sexual harassment.  All of these systemic problems facing tipped workers stem from the perpetuation of a two-tiered economic system that is based largely on gender and race.

Since 1996, the tipped minimum wage has been frozen at just $2.13 an hour. Employers are supposed to pay the difference if tips do not bring workers to the full regular minimum wage, but many restaurants unfortunately ignore this requirement, leaving many tipped workers earning even less than an already-too-low minimum wage. In 2010-2012 when the Department of Labor conducted a compliance sweep of almost 9000 full service restaurants, they found that almost 84% of restaurants had violated the sub-minimum wage system. By eliminating the tipped minimum wage, Congress will finally put an end to this absurd wage theft.

The Raise the Wage Act is an incredible achievement that, if passed, will establish basic pay equity across gender and race, lift millions of working Americans out of poverty, and increase the spending power of working Americans who will put that money back into the economy. Eliminating the sub-minimum tipped wage will, for the first time in the history of the US, establish a fair, livable wage that will apply to every working person in the country. This bill, passed by the most diverse House in history, will ensure that every working American, regardless of gender or race, is guaranteed equality in the workplace. Now, it is time for the Senate to step up and do their part. With a vote on the Raise the Wage Act, the Senate can improve the lives of millions of workers and prove that they truly work for the American people.

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