Raising The Tipped Minimum Wage

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underpaidI recently watched an interview with the author of a book, the objective of which was the defense of the argument to raise the tipped minimum wage. The tipped minimum wage is the hourly wage earned by servers in the food industry and has remained the same for more than twenty years at $ 2.13. Yes, it sounds low and when all of the arguments for raising it compare that wage to the federal minimum wage which now is fixed at $ 7.25, it sounds even more ominous.

But, what proponents of the increase do not tell you is that the $ 2.13 is just a portion of the server’s wage. As anyone knows who has ever eaten at a restaurant that has tableside service, the customer is expected to leave a tip. Nowadays, it is customary for the tip to be at least 20% of the cost of food and beverage. That means, the total wage is $ 2.13 per hour plus tip. In other words, the restaurateur guarantees to pay the $ 2.13 per hour (enough to cover taxes) and the remainder comes from the customer. And since the cost of eating out has kept up with the increase in the cost of living, the server’s tips must therefore, also, have increased accordingly. After all, 20% of a steak sandwich costing $ 5.00 twenty years ago would have meant a tip of $ $1.00, but 20% of a steak sandwich costing $ 20.00 today would mean a tip of $ 4.00.

Yes, there are many servers who are living at or below poverty level, just as many as there are retail clerks, domestic helpers and hotel workers. But, if they are working in those positions, they are being paid wages in accordance with the skill level required. In the restaurant industry, workers are truly paid for performance. A well trained, experienced, knowledgeable server, one who lands a job at a high end fine dining establishment, one who knows how to up-sell and provide first class service, will and should earn more than a server in a short order diner. Raising the minimum tipped wage might help the server working at the diner. Or, as many economists believe, raising the minimum tipped wage might just eliminate some of those jobs altogether.

Buon Appetito e Buona Salute, Chef Angela Bell
Beyond the Bull (an “eat smart” kitchen)
233 W. Main St., Central, SC 29630

Last modified: July 6, 2013
Angela Bell

This story is part of our Small Business Corner, a peek into the life and trials of small business owners.

Category: MPR Authored, Restaurants, Small Business, Small Business Corner, small business owners, Tips