Pioneer Editorial: House bill a bad deal for tip workers
There's been enough said about the election-year politics being played with the minimum wage -- as the Republican-controlled U.S. House last week finally passed a bill with an increase in the minimum wage but tied to a massive tax break for the wealthy in estate tax provisions -- but now we find that insult has been added to injury.
Goodness knows that a minimum wage hike is long overdue -- standing at $5.15 an hour since 1996. The House bill now before the Senate, which could get a vote on Friday, would boost that wage to $7.25 an hour over two years.
But now we find out that the measure would adversely affect tipped employees -- wait staff in bars and restaurants, manicurists, anyone for whom we pay a little extra for personal service. The House bill direct affects how tips are included in the minimum wage determination in seven states -- Minnesota among them.
In those states, workers now get to keep their tips on top of getting paid the state's full minimum wage. In the new House bill, Minnesota and the other six states would be forced to follow the policy in the remaining states where tip-earning workers get paid less and use their tips to make up the difference to the minimum wage. It would amount to a $3-an-hour pay cut to Minnesota wait staff and others who get tips.
In the other states, employers of tipped workers now pay only a portion of the minimum wage, starting at $2.13 an hour, as long as the workers draw enough tips to make up the rest. Under the proposed federal law, if tipped employees receive enough in tips to bring their average hourly wage during the week to $5.15 per hour -- the federal minimum wage -- then their employers are not required to pay more than that $2.13. But if workers do not receive enough in tips to reach $5.15 per hour, then employers are required to make up the difference.
In Minnesota, we expect all employers to pay their workers a decent wage -- by law the minimum wage but a living wage would be better. But we do not expect that tips must be used to reach that wage. We tip because we like the service being provided by that individual, and consider that "extra." Some establishments recognize that the wait staff is only the front line, and tips are shared with all involved in providing the service, from the cook to the table cleaner. Should those folks also depend on tips as wages?
In this election year there is no doubt the bill will pass the Republican-controlled Congress. But we hope that the Senate can alter its bill enough to send it to conference committee where this provision can be ironed out. Raising the minimum wage should not result in cutting the wages of others who just as badly need a living wage.