Tips Are More Important Than You Think

The Donald Trump Labor Department is proposing a rule change that would mean that restaurant servers and bartenders could lose a large portion of their earnings. The rule would overturn one put in place by the Obama administration, which prevents workers in tipped industries from having their tips taken by their employers. Under the new rule, business owners could pay their wait staff and bartenders as little as $7.25 per hour and keep all tips above that amount without having to tell customers what happened.

A new study from the Restaurant Opportunities Centers United and the National Employment Law Project shows that waiters and bartenders earn more in tips than they do from their base hourly wage. The median share of hourly earnings they make from tips makes up nearly 59% of waitstaff earnings and 54% of bartenders' earnings. Allowing employers to take much or all of that tipped income would be a major blow to many working in the restaurant and bar industry.

Workers in these fields are already poorly compensated. A recent study by the Economic Policy Institute and the University of California, Berkeley, found that "median hourly earnings for waiters and bartenders are a meager $10.11 per hour, including tips. That is just $2.86 above the current federal wage floor and far below what workers throughout the country need to make ends meet."

While proponents of the change suggest that businesses might use the tips to give workers more hours or to subsidize non-tipped employees, but with no requirement for such use of the tipped wages, employers could use them in any way they see fit. EPI analysis found that the new rule would transfer $5.8 billion from workers to employers.

Read the full report.

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Reposted from AFL-CIO

Posted In: Allied Approaches, From AFL-CIO

Union Matters

Federal Minimum Wage Reaches Disappointing Milestone

By Kathleen Mackey
USW Intern

A disgraceful milestone occurred last Sunday, June 16.

That date officially marked the longest period that the United States has gone without increasing federal the minimum wage.

That means Congress has denied raises for a decade to 1.8 million American workers, that is, those workers who earn $7.25 an hour or less. These 1.8 million Americans have watched in frustration as Congress not only denied them wages increases, but used their tax dollars to raise Congressional pay. They continued to watch in disappointment as the Trump administration failed to keep its promise that the 2017 tax cut law would increase every worker’s pay by $4,000 per year.

More than 12 years ago, in May 2007, Congress passed legislation to raise the minimum wage to $7.25 per hour. It took effect two years later. Congress has failed to act since then, so it has, in effect, now imposed a decade-long wage freeze on the nation’s lowest income workers.

To combat this unjust situation, minimum wage workers could rally and call their lawmakers to demand action, but they’re typically working more than one job just to get by, so few have the energy or patience.

The Economic Policy Institute points out in a recent report on the federal minimum wage that as the cost of living rose over the past 10 years, Congress’ inaction cut the take-home pay of working families.  

At the current dismal rate, full-time workers receiving minimum wage earn $15,080 a year. It was virtually impossible to scrape by on $15,080 a decade ago, let alone support a family. But with the cost of living having risen 18% over that time, the situation now is far worse for the working poor. The current federal minimum wage is not a living wage. And no full-time worker should live in poverty.

While ignoring the needs of low-income workers, members of Congress, who taxpayers pay at least $174,000 a year, are scheduled to receive an automatic $4,500 cost-of-living raise this year. Congress increased its own pay from $169,300 to $174,000 in 2009, in the middle of the Great Recession when low income people across the country were out of work and losing their homes. While Congress has frozen its own pay since then, that’s little consolation to minimum wage workers who take home less than a tenth of Congressional salaries.

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A Friendly Reminder

A Friendly Reminder