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September 13, 2013 · By Scott Klinger
Note: McClatchy-Tribune News Service distributed this op-ed.
Most people assume restaurant tips are a reward for good service that helps servers get ahead. In reality, your tip fills a gap created by a loophole. Federal minimum wage law allows restaurant owners to pay their tipped employees just $2.13 an hour.
This sub-minimum wage hasn’t increased for 22 years and amounts to less than a third of the federal minimum wage. It helps large restaurant corporations and their CEOs pad their bottom lines while trapping millions of American workers in economic insecurity.
The average server earned $20,710 last year, according to the Bureau of Labor Statistics. Because these workers start in such a hole, they are three times more likely to live in poverty and twice as likely to be eligible for food stamps as employees in other industries. A quarter of all servers are over 40, and many of them have families to support.
From 1966, when the tipped minimum wage was first introduced, until 1996, it was pegged at 50 percent of the prevailing minimum wage. But aggressive lobbying by the National Restaurant Association, which is dominated by large restaurant chains, removed the linkage and froze the minimum wage for tipped workers at its 1991 level of $2.13 an hour. Since then, about half the states have either raised the tipped minimum wage or have no minimum wage at all for tipped workers. For the rest, $2.13 an hour remains the standard.
Scott Klinger is an associate fellow at the Institute for Policy Studies in Washington, D.C.