BUSINESS

Tipped Minimum Wage Increase Would Give Millions Of Workers First Raise In 22 Years

04/25/2013 01:07 pm ET
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Millions of workers are poised to get a raise for the first time in more than 20 years.

Congress is considering legislation that would raise the base salary for tipped workers from $2.13 for the first time since 1991, Bloomberg highlighted in a report Thursday. If lawmakers pass the bill, it would mean a raise for the nation’s 2.3 million servers as well as other workers like hotel employees and parking valets, who rely largely on tips to make a living. In total, there are about 3.3 million workers employed in sectors that use the tipped minimum wage, which amounts to $4,430 per year for a full-time worker, according to a UPI report published last year.

President Obama proposed raising the tipped minimum wage and pegging it to inflation as part of his broader push to raise the minimum wage during his State of the Union address earlier this year.

For many tipped workers, the stagnent wages may actually mean shrinking paychecks when accounting for inflation. Americans’ real wages -- or the amount they got paid when adjusting for inflation -- fell between 2002 and 2012, according to McClatchy.

The situation for tipped workers got even worse during the recession as consumers pulled back on spending. And those who did receive a tip, generally saw the amount drop, according to PayScale data cited by The New York Times in 2009.

If lawmakers go through with raising the tipped minimum wage, it would be especially beneficial to women workers, who account for most of the workers in the sectors that rely on the tipped minimum wage, according to the UPI report. Women workers relying on tips make about 50 cents less per hour on average than their male colleagues because they’re more likely to be employed in lower-paying sectors like home health care and food service.

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