Tipped workers experience higher level of poverty

Personal Finance

Tracy Brasseur works as a waitress at Leo’s Coney Island restaurant in Royal Oak, Michigan, from 6 a.m. to 2. p.m., five days a week.

Although she only makes $3.52 an hour – the minimum wage for “tipped” workers in the state – she was bringing home around $500 each week, thanks to those gratuities.

But lately, things have been tighter for the 46-year-old mother of two.

A construction project near her restaurant has resulted in fewer customers coming through the door. Her wages for full-time work have shriveled to around $250 a week.

“My landlord doesn’t care that we have construction behind the restaurant,” Brasseur said. “They want their rent money.”

Advocates and workers recently celebrated the Department of Labor’s decision to back off its proposal to allow employers to use certain workers’ tips.

The updated law now allows that tips get shared among non-tipped workers, like cooks and dishwashers. But it doesn’t cover managers or employers, and it applies only if all workers are paid the regular minimum wage of that region — not the lower hourly compensation paid to some tipped workers.

Now labor advocates are focused on a more familiar fight: Abolishing the tipped wage altogether. While the federal minimum wage has been inching up over the last few decades, the federal minimum wage for tipped workers has been frozen at $2.13 since 1996.

Some states have raised the tipped wage beyond that, but only seven states guarantee the same minimum wage to all workers.

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