Twenty-three years ago (in 1991), I was a second grader at Hopkins Elementary school. My favorite band was The New Kids on the Block and the cost of a gallon of gas my mother put in her car was $1.14. That year my mother was working as a waitress at the Holiday Inn restaurant nearby our house and the federal minimum wage for tipped staff was $2.13.
Today, my oldest is in third grade, he likes to play Minecraft on his iPod and when I filled up my hybrid car today the cost of a gallon of gas was $3.63 . . . the Federal minimum wage for tipped staff…… still $2.13.
My mother worked for the Holiday Inn for 12 years. She was a professional server and performed to the highest levels where people would come in and request her as their server. She would provide table service and flambé. I know if I tried to flambé I would probably burn down my house. It takes a professional server to provide this type of dining experience and those who enjoy this experience pay for it with the price of their meals as well as the tip they give to their server for the exceptional experience. After 10 years, on her anniversary, she received a pin.
On Wall Street and in professional business at the end of each year, if your company is profitable, and sometimes even when it’s not, employees are rewarded with a bonus. In 2013, bankers on Wall Street brought home their biggest bonuses since before the 2008 financial crisis. In the restaurant industry when business is profitable employees rarely if ever see a bonus and never see a raise.
It is time we treat our tipped workers as professionals. About 10 percent of low-wage workers depend on tips as their main source of income and with the minimum wage still stuck at $2.13 many of these workers never see a paycheck because what little money they do earn pays their taxes on the tips. Their tips are what allow them to provide for their families. They get tipped poorly one day that could be the difference between dinner on the table or gas in their car.
Last month the Congressional Budget Office released a report called “The Effects of a Minimum-Wage Increase on Employment and Family Income.” There is a lot of information in this 43 page report discussing a few options for raising the minimum wage and how it will impact low-wage workers, their families, the economy, and businesses.
The report gives a couple of options for raising the minimum wage with one being an incremental increase to $10.10 per hour. With the $10.10 option the federal minimum wage would increase by .95 cents over the course of the next three years with $10.10 being achieved by July 2016 and minimum wage would rise with the consumer price index in subsequent years. But that is for regular minimum wage workers, not the tipped workers. The CBO report suggests raising the minimum wage for tipped workers from $2.13 per hour to $4.90 in three steps timed to coincide with the changes in the standard minimum wage. Then, starting in 2017, the minimum wage for tipped workers would rise by .95 cents each year until it reached 70 percent of the standard minimum wage, in subsequent years, it would be tied to inflation.
However, I suggest we make this easier on everyone involved. Let there be one minimum wage. Not a different wage for tipped employees. We should treat our tipped employees as professionals in their industry much like we do the financial services industry on Wall Street. When we do that, the tip you give your server, your bellhop, your hairdresser; that tip is their “bonus” for doing their jobs to the highest level of professionalism. For the flambé at your table side, for the perfectly placed highlights, for the car taken with your personal items.
The bonus corporate America receives pays for their fine dining experience or the vacation with drinks by the pool. The increased wage a service industry employee would receive puts a meal on their own table and pays for the transportation to their job at that fine dining restaurant or the resort vacation with those drinks served by the pool.