Tipped workers in restaurants, hotels, and other service businesses in the State of New York will receive a wage boost next year when a new minimum wage for tipped workers goes into effect.
New York’s Acting Labor Commissioner Mario Musolino on February 24 approved a recommendation by New York’s Wage Board to raise tipped workers’ minimum wage to $7.50 an hour effective December 31.
New York has three levels of minimum wages for tipped workers, $4.90, $5.00 and $5.65, depending on the type of job. Those tiers will be consolidated into one, and all tipped workers will be paid a minimum of $7.50.
New York’s minimum wage for all other work is $9.00 an hour
The Restaurant Opportunities Center United (ROC United), a worker center for low-wage workers, called the minimum wage increase for tipped workers a victory and said that it was made possible by collective effort.
“It took 2,000 e-mails. . . months of One Fair Wage rallies, events, and public testimony, and our collective voice to reach today’s victory,” said ROC United in a statement about Mr. Musolino’s decision.
The Hotel and Motel Trades Council AFL-CIO, SEIU, and the Retail Wholesale Department Store Union held a rally in support of the decision and invited Gov. Andrew Cuomo to speak at the rally to announce the decision.
In a posting on its Facebook page, the Labor Religion Coalition of New York State said that as a result of the decision, “239,000 workers in New York just beat the corporate lobby and won an unprecedented wage increase. Next up $15 and a union.”
Last fall during testimony before the Wage Board, David Jones, president and CEO of the Community Service Society of New York, explained why tipped workers need a raise.
According to Jones, 30 percent of tipped workers in New York City make less than $10 an hour with tips included, and between 20 and 30 percent do not earn enough to keep a family of three out of poverty.
Tipped workers are twice as likely as non-tipped workers to live in poverty.
Twenty percent qualify for food stamps and 22 percent are on Medicaid.
Tipped workers in New York City, where the cost of living is higher than almost any other city in the US, could be getting even more of an increase.
Musolino’s decision allows an extra $1 increase to the tipped minimum wage in New York City if the state legislature allows the city to increase its minimum wage.
The State of New York’s minimum wage for tipped workers is well above the $2.13 national minimum wage for tipped workers, which hasn’t increased since 1991.
A 2011 report by the Economic Policy Institute (EPI) says that a lower minimum wage for tipped workers doesn’t serve any purpose, except to give employers of tipped workers a subsidy that helps keep their labor costs low.
EPI also reports that the lower minimum wage has turned tipping into a necessity rather than a gesture of rewarding excellent service, and as a result has pressured customers into subsidizing employers labor costs.
“Raising the tipped minimum wage up to a higher percentage of the regular minimum wage would be a step in the right direction, but perhaps we should simply eliminate the tipped minimum wage altogether, and give tipped workers the same basic protection afforded to other workers,” concludes the report.