After 23 Years, Your Waiter Is Ready For A Raise (Participation)

Published November 13, 2014 by djlwsu

After 23 Years, Your Waiter Is Ready For A Raise

February 11, 2014 3:22 PM ET
A Denny's waitress delivers breakfast to customers in Emeryville, Calif. The tipped minimum wage has been stuck at $2.13 since 1991.

A Denny’s waitress delivers breakfast to customers in Emeryville, Calif. The tipped minimum wage has been stuck at $2.13 since 1991.

Justin Sullivan/Getty Images

When Woody Harrelson’s character got hired as a bartender on Cheers, he was so excited, he insisted on working for no more than the minimum wage. “I’d work like a slave,” he said, “and, of course, I’d wash your car.”

Most bar and restaurant workers would prefer to bring home a little more cash. They may be in luck.

As part of his plan to raise the minimum wage, President Obama has called for substantially increasing the base wage paid to tipped workers for the first time in decades.

“It’s easy to forget the overwhelming majority of tipped employees are low-income workers,” says Amy Traub, senior policy analyst at Demos, a liberal research and advocacy group.

The Democratic bill endorsed by Obama in his State of the Union address last month would raise the overall minimum wage in stages, from the current $7.25 to $10.10 an hour. Tipped workers — a group that includes waiters, bartenders and busboys — would see their base wages rise to $7.07 an hour.

That bill, like all legislation in Congress these days, faces an uncertain future. And its fiercest opposition comes from the National Restaurant Association.

For starters, the NRA argues, most tipped workers make more than the federal minimum of $2.13 an hour. And it’s true: Thirty-one states mandate higher minimum tipped wages than the feds — though those mandates vary widely. In Arkansas, for example, the minimum is $2.63, while in Washington and Oregon it’s more than $9.

Even in states that haven’t raised the tipped minimum, restaurants are required to make up any shortfall between $2.13 and the regular minimum wage that isn’t covered by tips.

“Tipped employees at restaurants are among the highest-paid employees in the establishment, regularly earning $16 to $22 an hour,” says Scott DeFife, executive vice president for policy and government affairs at the NRA. “Nobody is making $2.13 an hour,” he adds.

But labor advocates take issue with the NRA’s numbers. In 2012, the median income for food and beverage serving workers was $8.84 per hour, according to the Bureau of Labor Statistics. The bulk of tipped workers are barely making ends meet, advocates say.

States Where Servers Have The Highest Base Wages

Chart Shows Top 5 States With Highest Tipped Minimum Wage

Notes

Nevada’s tipped minimum wage is $7.25 for workers who have employer-provided health insurance. It is $8.25 for those without such a benefit.

Seventy percent are women who work at places like IHOP and Red Lobster,” says Saru Jayaraman, co-director of Restaurant Opportunities Centers United, which is pushing for higher wages. “They use food stamps at double the rate of the rest of the workforce.”

In seven states, mostly in the West, restaurants have to pay their workers the prevailing minimum wage, which is a good deal more than $2.13. Similar requirements are pending in the Pennsylvania and Florida legislatures, while voters will weigh in on the issue through ballot measures in a handful of other states and cities this year.

DeFife warns that increasing the base salary of servers and other tipped workers will lead to less hiring, as well as possible tensions in-house. With waiters making more in base salary on top of tips, the nontipped folks in the kitchen might feel shortchanged.

“We already have a disparity between the front of the house and the back of the house,” DeFife says. “For proper restaurant operations, you want to keep as good a balance as you can. You don’t want to increase the disparity.”

But even if wages do go up, labor proponent Traub argues that employers won’t pass on all the costs to their customers.

“Studies have found that when you pay higher wages, employees are more productive and turnover drops,” she says, “so you have people who are more experienced and can do a better job.”

Of course, the restaurant industry, the leading employer of minimum-wage workers, always warns about the perils of raising their salaries.

But now it’s possible to gauge some of these effects, thanks to the range of base pay in different states with different rules.

The NRA’s own projections show that restaurant sales are expected to grow this year at a rate exceeding the national average in at least some of the states with higher base wages, including California, Oregon and Nevada. And overall restaurant hiring hasn’t been driven down in the Western states that require higher minimum wages (although DeFife says there are complaints from restaurateurs in Oregon and Washington that they’ve had to cut back).

Still, it stands to reason that restaurants will have to pass on some of these higher costs to customers. Opponents of a wage hike argue this will make diners more cautious about eating out.

“The winners are probably going to be the people who get the higher wage, and the losers will be customers who have to pay higher prices and workers who don’t get hired by that industry,” says Michael Strain, a labor economist at the American Enterprise Institute, a conservative think tank.

In San Francisco, servers receive one of the highest minimum wages in the country — $10.55 an hour. That’s a considerable expense for restaurants that also have to cope with sky-high rents, as well as a local universal health care mandate that leads to surcharges generally of 2 percent on most restaurant bills.

“It’s very, very expensive to run any sort of restaurant in San Francisco,” says Patricia Unterman, a longtime restaurateur and food critic in the city. “The cost of doing business here, especially for labor-intensive operations like restaurants, almost doesn’t pencil out.”

But, she notes, amid the city’s thriving, tech-driven economy, people are willing to pay high tabs. San Francisco’s restaurant scene is thriving. And, Unterman says, restaurants skimp where they have to, cutting back on niceties like tablecloths and bread and butter, sometimes only serving water when asked.

Consumers can be sensitive to price changes, but even in places whose residents aren’t as flush as those in San Francisco, a slight rise in their tab isn’t likely to deter diners who value the experience or convenience of eating out. A study by University of California researchers suggests any increase in cost passed on to the diner is likely to be marginal at most.

In general, when people eat out — especially at a place where they’re waited on by servers — they know they’re generally going to pay more for the meal than they would if they had cooked at home.

Even DeFife concedes that an increase in servers’ base pay might not do too much harm, depending on how large it is and how fast it would be implemented.

“We don’t talk about job loss too much in the restaurant industry, per se,” he says. “The restaurant industry continues to grow.”

Advertisements

10 comments on “After 23 Years, Your Waiter Is Ready For A Raise (Participation)

  • My first job was working at a restaurant, and I never knew how hard it could be. I never really notice how much they took from my check, after the class discussion that we had I’ve realized that I should have seen how much they took. I was young and started at 16 and didn’t really care, all I wanted was money. It’s crazy to see the restaurant not treating people right!

    Like

  • After class lectures and reading the book, I’ve learned how bad some restaurants treat their employees. It is not right how some employees only paycheck is through their tips because the minimal wage is so low for restaurant employees. Before this class I did not really think much about the employees because I assumed they made good money because they were able to get tips. However I was so wrong after learning more about the industry. After learning about the employees and the hardships they go through I will defiantly try to be more aware when I go out to eat.

    Like

  • Restaurants have a reputation of being unfair to their employees. My best friend had her first job at a restaurant and would tell me horrible things her boss would do. Now after learning more in class lecture, and reading behind the kitchen door, I realize she was not alone. The restaurant industry is unforgiving and cruel to many of the employees. It is astonishing to her about how some waitresses, like the one from class videos, have been working their entire life and still make 2.13 an hour. It is time something should be done about this. Even though fro most people, the restaurant industry is a transitional job, there are still some who’s a restaurant job is their only source of income. This is no way to live.

    Like

  • Every sense I turned 16 I wanted to get a job at a restaurant, although my mom always told me not to because of the bad hours, and poor wages. I always thought she was just being over dramatic but now after taking this class I realize that she is right. I am shocked by the amount of shit that restaurant employees go through, and the little money they get paid (excuse my inappropriate language). After seeing the various videos and looking at readings from class I am surprised that the wages for waiters and kitchen staff is as low as $2.13 and has stayed that way for 23 years. In result of the low income many waiters and kitchen staff do not have health care, a home, and are living on food stamps. After learning all this I have already changed the way that I tip. I don’t tip based on the waiters service, I tip 20% every time because I now know that I am impacting a persons income and even if the service is slow its not the waiters fault. This working industry needs to be more open toward the public and inform people what is happening with these workers and how they are being treated. There needs to be a change.

    Like

  • After hearing about the wages I can’t help but highlight blatant facts. Let’s say an upscale restaurant locates itself in a low income area. The chances of high business is very low and because of that COMPANY decision workers are not getting tips. Or if the business has a bad reputation the EMPLOYEE suffers. Raising the wage is a very important step into the right direction for equality in the restaurant business.

    Like

  • Before class discussions and reading about the food restaurant industry, I never really gave much thought about the waiters and kitchen staff. My mind was always focused on the food, and the process of getting it. It really bothers me that waiters rely so much on tips, when tips are determined from more than just the waiter’s service. Tips can be factored by wait time, food quality, and just overall experience at the restaurant. I agree with raising the wage because then more waiters will be paid equally and not have to rely on their customers so much for their paycheck. How about even try to take away tips or factor tips into the total so its equal for everyone?

    Like

    • I have to agree with you. I never knew that tip wage workers were making so little. The discussions about the food industry that we are having in class has open my eyes to many things that i was not aware of. Its hard for me to believe that people want to continue working in this horrible restaurant industry.

      Like

  • I think its absurd for tipped minimum wage to be stuck at $2.13 for over 20 years. The cost of living in 2014 has been increased a lot since 1991 so why hasn’t the tip minimum wage gone up. The minimum wage has risen since 1991 but not for tip workers. The tip minimum wage is so low that restaurant workers are basically living off their tips that can vary how much each day. They’re no consistent pay coming from these restaurants job but bills are very consistent and come monthly. Restaurants workers live on uncertainly and that come along with stress. Its good to hear that Obama is doing something about the tip minimum wage problem but it shouldn’t have taken over 20 years to do. I understand there is 31 states that are above the federal tip wages but the federal tip wage is a joke when you look at it. All 50 states should be over the federal tip wage. Hopefully the democratic bill gets pasted, that will benefit many low income-working families. According to Scott Defife the executive vice president for policy and government affairs for the NRA he said that tip workers are making $16-22 an hour but it contradicts with the $8.84 per hour that the Bureau of labor statistics are saying. $8.84 an hour is below the minimum wage in Washington State and the minimum wage is supposed to equal the cost of living. So think about that.

    Like

  • It baffles me that the minimum wage for tipped workers hasn’t changed in 20 years. Before taking this class I was really wasn’t sure on why we tipped the waiters since I originally had thought that it was their job to serve the customers their food, and that leaving a tip was just a “nice thing to do”. I now understand that tipped workers have been in a long fight trying to earn a livable wage, but what I don’t understand is how can we justify on trying to live off a minimum wage that that was set 24 years ago when the price of living has gone up. Why shouldn’t we raise the minimum for tipped workers when other minimum wages have been raised? It just doesn’t add up. I’ve had friends work in the restaurant industry and I’ve heard them complain about their job but just thought they were over exaggerating. I now see that they weren’t the only ones who felt they were being mistreated. After the discussions and reading we’ve had in class I better understand the reasons we are suppose to tip but most importantly I am aware of the financial struggles some families face that work in the restaurant industry. I recognize that making a change in the minimum wage would make it a realistic possibility for those families to have a chance to provide food for their families but until they do, there really is no opportunity for them to try to get ahead living paycheck to paycheck.

    Like

  • Before class discussions and reading about the food restaurant industry I was naive and never would have thought that restaurant workers were paid so little. Seeing the numbers and taking in the fact that some restarunt workers minimum wage is under $3 is horrible. Now that i know this fact i make sure to provide the best experience for my waiter/waitress just because i already know how bad they have it. And to top it off so many workers are mistreated by their employer. The food industry seriously needs some change!

    Like

  • Leave a Reply

    Fill in your details below or click an icon to log in:

    WordPress.com Logo

    You are commenting using your WordPress.com account. Log Out / Change )

    Twitter picture

    You are commenting using your Twitter account. Log Out / Change )

    Facebook photo

    You are commenting using your Facebook account. Log Out / Change )

    Google+ photo

    You are commenting using your Google+ account. Log Out / Change )

    Connecting to %s

    %d bloggers like this: