There’s a lot of talk about raising the minimum wage in America, but what you might
not know is a lot of companies get away with paying under the minimum wage every single
day.
All that and more in today’s video.
Roll intro!
My name is Evan Edinger and I’ve been making videos about weird British and American customs
for well over 5 years now like how the US taxes Americans living abroad or comparing
our school curriculums.
Today though, we’re looking at an infrequently talked about wage in the United States, the
tipped wage.
You may know that the federal minimum wage in the US is currently at $7.25 an hour and
it has been that low for over 10 years.
In fact, that’s how much I was paid working retail in New Jersey 10 years ago today.
Gettin those extra holiday hours at 2 jobs.
Individual states are allowed to pass their own minimum wage laws as long as they are
higher than the one federally mandated.
For instance, as of 2020, the minimum wage in Montana is $8.65 and the minimum wage in
Washington is $13.50.
Hypothetically if you lived in the panhandle of Idaho where you’re stuck earning the
federal minimum wage of $7.25 an hour, you might be strongly encouraged to find a minimum
wage job in washington where you’d be earning nearly double for the same work.
In fact here on interstate 90 between the 2 states there are 2 carl’s jrs 6 miles
apart.
One of them will pay you 7.25, and the other 13.50.
But the one stipulation here that is so incredibly overlooked isn’t just this discrepancy between
state minimum wages, but the the wage given to our tipped service members particularly
at restaurants.
The tipped wage or server wage is the base wage paid to an employee that receives a substantial
portion of their compensation from tips from customers.
Tipping culture in the US has been thriving for well-over a century with its roots back
in the 1850’s and 1860’s right after the civil war when rich Americans traveled to
Europe and stayed at hotels and dined at restaurants.
Upon returning to the US, these rich Americans began showing off their worldliness, that
they knew the rules of the elites of Europe and began tipping porters, valets, and you
guessed it restaurant workers.
Now at first, tipping culture was met met with disdain.
“The New York Times claimed in 1897— many thought it was antithetical to American democratic
ideals.
“Tipping, and the aristocratic idea it exemplifies, is what we left Europe to escape,” William
Scott wrote in his 1916 anti-tipping screed, “The Itching Palm.”
The problem with tipping was that the practice was only done on those you viewed as your
inferior which as you can imagine, gives America’s tipping culture strong roots in racism.
John Speed, a journalist in 1902 said that he was embarrassed to offer a tip to a white
man whereas a black person, they of course would expect them.
So the classist and racist tones that tipping brought to the US caused 6 states to initially
ban the practice.
And this movement, actually carried on back into Europe where the practice began with
countries like England and France passing legislation in the 40’s and 50’s to help
decrease workers’ reliance on tips which is why to this day, you don’t really see
tipping culture in much of Europe.
In the US, this movement against tipping died off as the restaurant industry was hiring
newly freed slaves as tipped workers and wanted the right to hire these workers but pay them
next to nothing.
Through effective lobbying, they got what they wanted.
Even then, 5 of the 6 states that had originally
agreed to ban tipping were actually southern states who banned the law not to ensure fair
wages for wait staff, but to discourage whites from tipping the black clientele.
Slowly but surely, these laws banning tipping were revoked, and tipping culture was in full
swing.
In 1938, the United States passed the Fair Labor Standards Act of 1938 which enacted
the country’s first minimum wage and our first insight into the consideration of tipped
employees with the act having a specific section for employees who earn over $30 a month in
tips.
Any employee who does regularly receive tips is exempt from the act with employers not
legally having to pay them anything.
It wasn’t until 1966 that a separate “tipped wage” was introduced which was set to 50%
the federal minimum wage.
The problem?
Restaurant lobbies pressured the government in 1991 to freeze the tipped wage as opposed
to having it increase in line with the federal minimum wage, and so for nearly the last 30
years, wait staff in the states have been paid only $2.13 an hour.
They haven’t even adjusted it for inflation... buy bitcoin
So here come’s the question, how can a country that so often touts itself as the “land
of the free” and a country full of equal opportunity so easily agree to pay workers
of an essential job at a rate that was the federal minimum in 1975?
Well opponents to raising the tipped wage have a few easily knocked down points.
The first argument?
Restaurants have slim margins.
If we raise the wages we have to pay the wait staff, we won’t be able to pay as many of
them, so a lot of people will lose jobs, and the cost of everything will increase and that
will inevitably fall on the consumer.
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No taking breaks unless it’s to feed your smoking addiction.
Which sounds pretty horrible for everyone involved, except it’s just fearmongering
and absolutely not true.
First off, if your business can’t afford to pay every employee a fair wage and remain
in business then your business is run pretty badly and shouldn’t be in business.
But secondly, we already know this isn’t true because we have proof.
7 states have currently adopted paying their wait staff a fair wage, and guess what.
Alright, but you
could also say that abolishing the tipped wage would stifle new restaurants from opening
as they couldn’t afford to, but then that is ALSO not true.
During the same period as the last study, it was found that states that had opted to
pay their wait staff a fair wage experienced a greater growth in these new restaurants
than states that pay their waitstaff below the minimum wage.
Alright, so we’ve gotten that out of the way.
The second argument.
Even when the minimum wage is raised a lot like in certain states, the average income
servers make increases only marginally it’s a bad trade for us in the restaurant business.
First off, that’s still a raise so regardless of it being marginal, that’s still more
income and 2, we all know, if you’ve ever been a server… no one ever claims all their
tips.
If you work an 8 hour shift, and you make over let’s say $80 in tips, you only really
need to claim a bit over $40 for tax purposes.
Obviously, legally speaking, you are meant to be claiming 100% of those tips… but I’ve
never met a server in my life that would do that especially considering we only make $2
an hour.
So though it may appear as if it’s only a marginal increase in income, a lot of servers
aren’t going to fully report how much they make.
And the final and biggest argument.
3.
There’s no need to pay waiters more.
As much as this Evan guy is claiming waiters only get paid $2.13 an hour in this video,
myself and some restaurant lobbyists might argue he’s doing so in bad faith.
Because truly, any amount of money a tipped employee makes UNDER the federal minimum is
legally required by the employer.
So if one of MY servers earns $4 an hour in tips, well including the $2.13 I already pay,
they’re still $1.12 under the minimum wage, so I’ll gladly pay the difference.
I’ll stop you there.
I would say that’s nice in theory, except it’s not for multiple reasons, but as an
example,
“In investigations of over 9,000 restaurants, the U.S. Department of Labor (DOL) found that
84 percent of investigated restaurants were in violation of wage and hour laws, including
nearly 1,200 violations of the requirement to bring tipped workers’ wages up to the
minimum wage.”
And any server out there knows exactly what I’m talking about.
Sir, you asked me to come in on my day off?
Yes, come in come in. It seems you didn’t earn enough in tips yesterday. That must mean you’re a bad server so as your boss I’m writing you up.
but it was really slow today! you saw the number of guests that came in!
It’s not my fault I didn’t earn enough money!
- yeah. It was really slow. well, if you just claim that you earned enough so we won’t have to pay you, we can
forget about this little write up here.
- So my options are to get written up and possibly lose my job, or accept being paid
$6 an hour.
- Or just be a better server - -sigh
- - oh Evan by the way, we just started pooling our tips here, so be sure to share 50% of
that money you made with the cooks!
That’s an actual conversation I had with my boss at pizza hut nearly 10 years ago.
Now tip pooling is its own can of worms.
So here you are busting your butt for your customers so they hopefully give you a big
tip, and a lot of restaurants force you to to give up all the tips you’ve earned to
share with not only the other waiters, but also the cooks and other staff at the back
of the house that already receive full minimum wage.
Only one state currently bans mandatory tip pooling.
Congratulations to Minnesota.
Now when you’re a server, you’ve got 2 bosses, your employer and the customer and
both of these can cause significant problems for staff paid under minimum wage.
The problem with your employer is just how much he can manage to exploit you.
Here’s a scenario, it’s a Friday evening
at Pizza Hut.
The football game’s on tv.
You’re gonna be getting a lot of online orders and a lot of orders by phone.
Now, rather than pay for 1 or 2 CSR’s or customer service representatives who get paid
minimum wage answer phones and cut pizza, my pizza hut would just have on 4 servers.
Now did we need 4?
No.
We never needed more than 2 for dine in customers.
But my manager would just make sure to tell us, no matter what we’re doing, if the phone
rings more than 3 times, we get written up, and if it’s not too busy in the dine in
area well, we better get cutting pizza or better yet, folding boxes.
This is one bit of muscle memory I truly wish I
didn’t have.
And as a YouTuber I was boxing before it was cool.
*filmed in toilet* Now you could argue that this is an abuse
of the system because it is, as folding boxes, answering phones, and cleaning toilets aren’t
tasks that I would in my role get tipped for, but when you point this out to your boss like
I did, you’ll most likely find that little sentence at the end that also adds as a responsibility,
anything else the manager deems helpful to business.
One time I got paid $2.13 an hour to wave a sign out on route 47 to get cars to come
in for our special.
It was a slow day.
But even more problems come from your other boss, the customer, which luckily as a guy
I didn’t have to deal with as much, but of the women who by the way make up 2/3 of
the restaurant workforce, 90% of them report experiencing sexual harassment.
But what’s this have to do with the tipped
wage Evan?
Sexual harassment happens everywhere!
AND servers experience 2 TIMES the amount of sexual harassment in states who pay the
tipped wage vs the federal minimum.
There are so many times I’ve seen waitresses in tears because of sexual comments by customers
that put them in a situation where if she tells them off she risks not being paid.
When saying we want to end the tipped wage, we’re not saying to end tipping, just that
companies should have to pay the minimum wage and tips should go
on top.
When you are tipping a waiter at a restaurant in 43 states, every state but California,
Nevada, Oregon, Washington, Montana, Alaska, or Minnesota, you are effectively most likely
giving more money to the restaurant than to the waiters.
If a waiter earned $10 an hour in tips, the restaurant takes over 50% of their tips.
That’s how we should be looking at this.
When doordash was uncovered last year as paying employees $1 an hour and having all customer
tips go towards doordash not having to pay the drivers as much to get up to minimum wage
which is the same exact model we are talking about here, there was huge outcry.
Yet all doordash was doing was using a fully legal model that over 6 million restaurant
workers in America currently have to suffer from.
There’s a reason that 4 of the 7 lowest paid jobs in America are tipped jobs
It’s a broken system that exploits the lowest paid Americans which makes them suffer at
3 times the poverty rate of the rest of the US work force and use food stamps at double
the rate.
If you’re upset about this practice and want to change it.
Be loud.
Post about this on social media Email your politicians.
Share this video with them and ask them what they’re doing to help end the tipped wage.
And stay in the loop with One Fair Wage, who are a nonprofit created to help end subminimum
wages in the US.
Thanks for Subscribing and I’ll see you next Sunday