Tipped workers included in proposed minimum wage increase

A minimum wage bill pending before Congress would substantially increase the minimum wage for nearly 30 million US workers including tipped workers who haven’t seen an increase in their minimum wage in 21 years. The proposed minimum wage increase would, according to supporters,  go a long way toward stimulating the US’s stagnant economy and have only a modest impact on food prices.

“Raising the minimum wage at its core is about respecting and valuing work,” said Rep. George Miller of California, author of the Fair Minimum Wage Act (HR 6211). “No one who works hard every day and plays by the rules should live in poverty.  Increasing workers’ paychecks will help millions of working families make ends meet and help the nation’s economy grow.”

Introduced last summer, HR 6211 would increase the minimum wage in three 85 cent steps from $7.25 an hour to $9.80 an hour. After that, the minimum wage would be indexed to inflation every year.

According to Miller, today’s minimum wage buys less that it did in 1956 when the minimum wage was $1 an hour.

Tipped workers would be included in the minimum wage increase, the first time since 1991. Their minimum wage, now set at $2.13 per hour, would increase by 85 cents an hour every year until it reaches 70 percent of the regular minimum wage.

According to a report by Restaurant Opportunity Centers (ROC) United, the restaurant industry, one of the fastest growing sectors in the US economy, offers some of the lowest paying jobs. Federal law allows restaurants to pay tipped workers $2.13 an hour as long as a combination of tips and hourly wages equal $7.25 or more.

However, says ROC United, restaurant owners frequently ignore this requirement.

As a result, tipped staff at restaurants, 71 percent of whom are female, are three times more likely to live in poverty than other workers.

Restaurant workers aren’t the only ones in the food supply chain who would benefit from the proposed minimum wage increase. Farmworkers, warehouse workers, food processing workers, and retail grocery workers now working for minimum wage would see an increase in their pay.

A report released last month by the Food Labor Research Center on the impact that an increased minimum wage would have on the economy finds that it would substantially improve the lives of low-paid workers, especially those in the food supply chain, at a minimal cost to consumers.

“Food workers are some of the lowest-paid workers in America, and they face much higher levels of food insecurity than the rest of the US workforce,” said Saru Jayaraman, director of the Food Labor Research Center. “Our report shows that raising the minimum wage would help them put food on the table while barely, if at all, impacting everyone else’s ability to put food on their tables, too.”

The report, entitled, A Dime a Day: The Impact of the Miller/Harkin Minimum Wage Proposal on the Price of Food, estimates that if the minimum wage increase proposed in HR 6211 were implemented, “retail food prices for American consumers (would increase) by at most 10 cents a day, while helping nearly 8 million food workers and 21 million workers in other industries.”

“We rely on food system workers to bring our food to our tables – workers on farms and in food processing plants, warehouses, grocery stores, and restaurant and food service establishments,” said Joann Lo, executive director of the Food Chain Workers Alliance. “It’s a sad irony that food-system workers rely on food stamps at one-and-a-half times the rate of the general workforce. Raising the minimum wage can help lift food workers, and workers in other industries, out of poverty.”

Increasing the minimum wage, according to the Economic Policy Institute would also strengthen the US economy by adding $40 billion to the economy through higher wages, creating a net of 100,000 new jobs, and boosting the Gross Domestic Product by $25 billion.

“It is long past time to establish a fair minimum wage in our country,” said Sen. Tom Harkin, who authored the Senate version of the  Fair Minimum Wage Act of 2012 (S 3453). “It is good for families, good for business and good for our economy, and, most importantly, it is the right thing to do.”

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