OAN’s Elizabeth Volberding
8:42 AM – Sunday, January 7, 2024
This year, five states are in the process of deciding whether to stop the practice of paying employees who earn tips less than the minimum wage.
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Activists have also claimed that by framing it as a crucial cost-of-living issue in an election year, they are spreading that fight to other states.
Hourly workers who receive tips, such as servers and bartenders, are paid a lower “subminimum” wage than their nontipped counterparts.
The long-standing two-tiered pay system would be eliminated by ballot measures pending in Michigan, Arizona, Ohio, and Massachusetts, as well as a bill being reintroduced in Connecticut.
There are now only seven states with a single minimum wage regardless of tips. Even though over 24 other states have increased tip earners’ subminimum pay above the federal $2.13 per hour floor, which was last raised in 1991, the base pay of these workers remains lower than the minimum wage in their respective states.
When tips fall short of the federal minimum wage of $7.25 per hour, employers are expected to make up the difference, however, labor advocates and researchers assert that this is not always the case.
Following Chicago lawmakers’ vote in October to start phasing out the tipped subminimum wage over five years until it’s equal to the city’s standard hourly minimum of $15.80, proponents are feeling very optimistic. Less than a year prior, voters in Washington, D.C. approved a ballot initiative by large margins, taking a similar action.
Saru Jayaraman, the president of One Fair Wage, a national advocacy group that led the effort in Chicago, made a statement regarding the situation.
“We’re just seeing so much momentum following that win in the Windy City,” said Saru Jayaraman.
She stated that the advocacy group has already seen thousands of restaurants throughout the nation willingly eliminate subminimum wages in favor of the same base pay for all front and back-of-house workers, with tips added to that.
“It’s about a massive shift that’s happened in the restaurant industry post-pandemic,” Jayaraman added.
Jayaraman concluded that tips progressively failed to keep subminimum wage earners afloat as the economy recovered and employers found it difficult to hire, all the while inflation drove up the cost of everything from a head of lettuce to a month’s rent.
Outside of just abandoning subminimum pay for possibly millions of additional tipped workers in 2024, an election year in which Jayaraman mentioned a “top issue for every poll I’ve seen is the cost of living,” One Fair Wage would like to protect improved base pay universally.
She added that the ballot initiatives that the group supports in Michigan, Arizona, Ohio, and California would raise the state minimum wage overall in addition to ending subminimum pay for those who are incarcerated, the only residents in that state who are still eligible for such compensation.
“Forcing these workers to rely exclusively on tips just isn’t working anymore,” Jayaraman added.
The coming 12 months will portray how many voters and policymakers agree with the decision.
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