As the school year nears an end, the annual migration of full-time students to full-time workers will begin.
But the outlook is bleak: The U.S. Bureau of Labor Statistics reports that the unemployment rate for 20- to 24-year-olds is 13.3 percent. Locally, Richmond has an 8.7 percent unemployment rate, about 2.5 percent above Virginia’s 5.2 percent unemployment rate.
Those of us who do find work, however, may find ourselves chained to minimum wage jobs, along with the three quarters of minimum wage earners who are 20 or older and the nearly 10 million Americans who work in one of America’s largest, fastest growing industries: restaurants.
While jobs as servers can be plentiful and alluring, with employers tempting employees with the option of being tipped in addition to their hourly salary, know that you’re being lied to.
Under the Fair Labor Standards Act (FLSA), the minimum wage for a tipped workers in America is deplorably low, at $2.13 an hour. Thirteen states, including Virginia, pay tipped employees at that rate. Alaska, California, Nevada, Oregon, Montana and Washington are the only states that set their minimum wage above the federal minimum wage of $7.25 an hour.
While the national average wage for restaurant workers is $8.89 an hour, that includes members of the waitstaff, busboys, cooks and managers. Worse yet, that initial salary of $2.13 an hour for servers essentially becomes nothing once state and federal taxes are factored in, if the restaurant deducts a percentage from a server’s tips from credit cards to cover the processing fee and if the server must contribute to a tip pool.
Servers live on tips. They live on the generosity of strangers. They live on a monthly income that is reliably inconsistent and highly dependent on the economic and social environment. The best days are outnumbered by the worst days, days when they might not receive any tips.
The minimum wage for tipped employees has not risen since 1991. It remains low and unadjusted to inflation, despite evidence that taxpayers are being forced to make ends meet where the restaurant industry does not. According to the Restaurant Opportunity Center (ROC), restaurant servers have triple the poverty rate as any other member of the workforce and use food stamps at double the rate. They are the face of poverty in America, able to put food on your table but not their own.
The anecdotes about waiters and waitresses making hundreds of dollars a week just on tips is just that: anecdotal.
Their poverty is a consumer risk and an occupational hazard. Survey data by ROC shows that 87.7 percent of workers lack paid sick days and 89.7 percent don’t have health insurance through their employer. Logically, that puts consumers at risk, as 63.6 percent of sick employees, unable to take much needed leave, come into work and possibly contaminate food, either through direct contact or contact with co-workers.
For consumers cognizant of these facts, it’s a difficult choice to make: Do you dine out and leave the worker a generous tip or send a message to a restaurant asking them to treat their employees better and dine in, effectively stranding the tipped employees?
ROC estimates that raising the minimum wage for tipped employees to the federal standard would only increase food and dining costs by 10 cents a day, should employers pass 100 percent of the cost onto consumers. The effect wouldn’t be overly damaging, as the restaurant industry makes four to five times the profit margins of Wal-Mart, the single largest retail entity in America.
The Miller-Harkin Fair Minimum Wage Act, championed by Sen. Tom Harkin (D-IA) and Rep. George Miller (D-Calif.), would raise the federal minimum wage from $7.25 to $10.10 for regular employees and from $2.13 to 70 percent of the regular minimum wage for tipped employees. While that doesn’t make minimum wage adjusted to inflation or a living wage, it’s a start toward a fairer system.
Raise the Minimum Wage, a workers-rights campaign, found that guaranteeing tipped workers the full minimum wage or raising tipped employees’ pay by 70 percent to be a successful measure in reducing poverty among tipped workers with the state. Restaurants and consumers, whose spending drives 70 percent of the economy, can afford to pay tipped workers a more reasonable wage.
If you have to take a job in the restaurant industry, don’t delude yourself and know your rights as a tipped employee. Let representatives know that they must support the Miller-Harkin Act and that the poverty pushed by low wages comes back to bite taxpayers. The restaurant industry and their lobbyists have too long oppressed workers by being both one of the lowest wage sectors and one of the highest grossing industries in the nation.