The Tips Work Coalition Responds to Economic Policy Institute Paper on Tipped Minimum Wage

2014-07-14
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  • Restaurant News Resource The Tips Work Coalition, a non-profit advocacy organization that supports preserving the ability of restaurant servers to increase their income through tips, released the following statement and key facts in response to tomorrow’s release of the Economic Policy Institute’s 'briefing paper' on the tipped minimum wage.

    The Tips Work Coalition, a non-profit advocacy organization that supports preserving the ability of restaurant servers to increase their income through tips, released the following statement and key facts in response to tomorrow’s release of the Economic Policy Institute’s 'briefing paper' on the tipped minimum wage. Members of The Tips Work Coalition include restaurants that are dedicated to educating the public about the benefits of the tipped wage.

    “The Economic Policy Institute’s report grossly misrepresents the facts about the tipped wage, starting on page one by calling it ‘subminimum.’ For this group to call the tipped wage ‘subminimum’ is not only misleading, but an affront to the millions of Americans who earn an honest, middle-class income through tips. The fact remains that every tipped employee by law makes at least the minimum wage but most restaurant tipped workers earn significantly more—in excess of $16 an hour. EPI seems more interested in scoring political points than accurately accounting for restaurant servers’ actual income.”

    A few important facts to keep in mind when reviewing EPI’s briefing paper:

    1) Contrary to EPI claims, tipped employees at casual dining restaurants typically earn in excess of $16.00 an hour.

    2) Tipped employees are fully protected by the legal minimum wage in the U.S. In the rare event that a tipped employee does not earn enough tips to make above the minimum wage, the law requires employers to make up the difference.

    3) Restaurant servers have seen take home pay increase by 70 percent over the last 15 years.

    4) For decades, the tipped wage has provided access to the middle class. Millions of Americans started their careers working as servers in restaurants, earning well above the minimum wage through tips. Further, nine out of every 10 restaurant managers begin their career as a tipped employee. As EPI references, “tipped workers have lower levels of education than the overall workforce,” yet these jobs provide access to good wages that reward hard work and customer service.

    5) Increases to the tipped wage would likely result in reduced hours for tipped employees or be passed along to the customer in the form of an added service fee or increased prices.


    Logos, product and company names mentioned are the property of their respective owners.

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