Massachusetts, Michigan minimum wage hikes leave restaurant workers shortchanged

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Massachusetts and Michigan have become the latest states to get sick of waiting for a GOP-hamstrung U.S. Congress to raise the federal minimum wage, as both states' legislatures recently voted to hike their own state minimum wages.

But there's one big flaw in the two measures, according to the Restaurant Opportunities Center (ROC), the union-supported group that is campaigning to raise restaurant workers' pay nationwide: Increases in the tipped minimum wage were too small.

The federal minimum wage for workers who depend on tips is $2.13 hourly and it hasn't risen in more than 20 years. Employers are supposed to make up the difference between what a worker gets in tips, on top of that $2.13 hourly sum, and the regular minimum wage, now $7.25 hourly.  But employers routinely cheat the tipped workers out of the difference.

Raising the tipped minimum would help close the wage gap, especially for restaurant workers, who are among the poorest-paid nationwide, ROC co-founder and co-director Sayu Jayaraman says. Seven states have eliminated the tipped minimum, bringing all workers under the regular minimum wage, she adds.  Their restaurants are thriving, she notes.  

Massachusetts and Michigan did not raise the tipped minimum enough, Jayaraman adds.  Specifically, Massachusetts increased its tipped minimum wage from its current $2.63 an hour to $3.75.  Michigan raised its tipped minimum by a dollar an hour, to $3.50.

Massachusetts now has an $8 hourly minimum wage for other workers. That's 75 cents above the federal figure of $7.25, which itself hasn't risen since 2006.  Michigan's overall minimum would rise to $9.25.  The new Massachusetts minimum would rise to $11 hourly by 2017. Unions, President Obama, and congressional Democrats are campaigning for a hike to $10.10 by 2016.

Michigan's hike went quickly through a GOP-dominated legislature - and GOP Gov. Rick Snyder signed it - to head off a worker-led union-supported referendum that would have given low-wage workers in the Wolverine State an even larger raise, Jayaraman adds.

Nevertheless, the two minimum wage wins are signs of success nationwide of the growing movement of hundreds of thousands of low-wage workers - fast-food workers, retail workers, Walmart workers, warehouse workers and others - who demand a living wage of $15 hourly, decent benefits and hours and the right to organize without employer interference.

"This law is not a win for many Michiganders," Jayaraman added.  "Through intense lobbying by the National Restaurant Association and other interests, more than 160,000 tipped workers in Michigan, over 74 percent of whom are women, are stuck with a base wage of $3.50 an hour- less than $1 per hour increase over their old wage-and still far below the poverty line.

"For three bucks and fifty cents an hour, many of Michigan's mothers, wives and daughters live day-by -day, shift-by-shift to see if they will earn enough income to cover their rent, food, and transportation while raising a family. They have to endure five times the national rate of sexual harassment, performing for customers to earn their wages, and for their employers to obtain the best shifts. This is not a culture that should be perpetuated at any price, and the sub minimum wage makes it all the worse."

Some 120,000 tipped workers would benefit from the Massachusetts tipped minimum wage hike, Jayaraman says. But the hike should have helped them come closer to the regular minimum wage, the better to lift them out of poverty-level wages, she adds.

"Sixty-six percent of tipped workers in Massachusetts are women," she said.  The new $3.75 Massachusetts tipped wage means "women will remain dependent on the largesse of customers for their livelihood.  Nationally, servers use food stamps at double the rate of the rest of the U.S. workforce and are three times as likely to live in poverty."

Photo: Restaurant workers, including those involved with ROC, attend a Chicago event called "National Restaurant Worker Olympics," a protest against unfair wages and working conditions that involves dancing and other competitive performances. ROC United official Flickr page

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  • It's not possible to make below minimum wage with a tipped wage law...so what's the big deal here?

    Posted by Denny Rivera, 07/02/2014 8:48am (2 months ago)

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