We’re all for workers’ rights. We’re all for equal and fair pay. We’re all for providing people who work hard with a good living, no matter what they choose to do.
However, we’re not for government-mandated raises, especially for workers who typically make more than minimum wage.
New Jersey Policy Perspective is urging lawmakers to increase the state’s minimum wage for tipped employees from $2.13 per hour to $5.69 per hour — a 167 percent increase. The Assembly Labor Committee passed such a bill in March.
The group argues tipped workers “earn less than twice that of their non-tipped counterparts and, as a result, are more likely to live near the poverty line.”
The non-profit Economic Policy Institute, which suggests paying tipped workers the same minimum wage as non-tipped workers, $8.25, says tipped workers have a poverty rate twice that of non-tipped workers, are more likely to rely on public assistance and less likely to receive benefits such as paid-time off and health coverage.
Tipped workers in this state haven’t had a raise in their minimum wage since 1991, sitting at $2.13 per hour — the federal minimum — for more than 20 years.
But this is where the controversy begins. The New Jersey Restaurant Assocition opposes the increase, obviously, and it has a very good point. The association’s president, Marilou Halvorsen, reminds us that tipped workers are guaranteed to make at least the state’s minimum wage of $8.25; if they leave making less than that in tips, the employer “is obligated to make up the difference,” she said.
So what’s the fuss about, then? Halvorsen says a survey of the association’s membership found that tipped workers earn between $15-$16 per hour on average. Extrapolate that over a 40-hour week, and that’s a salary north of $30,000 per year.
Seems to us the system currently in place protects tipped workers just fine. Giving them the proposed $3.56-per-hour raise would equate to an additional $7,404.80 per year, per employee based on a 40-hour work week, for a total salary of almost $40,000 per year. And the difference in salary would come out of the business’ pocket.
If these businesses are required to pay that difference, it wouldn’t be surprising if they simply laid off a tipped worker or two and got by with a smaller staff. That would accomplish almost exactly the opposite of what these groups, and the proposed bill, seek to do. We urge the Legislature to resist passing this bill. Tipped workers are already compensated at appropriate levels.
And we’ll continue to tip 20 percent.
