A strong minimum wage helps workers support their families, and it can bolster our economy by increasing the amount of money workers have to spend at local businesses.
In the case of workers who regularly earn tips, like waiters and hairdressers, employers are only required to pay what’s called the “tipped minimum wage,” which in Massachusetts is well below the regular minimum wage (it is currently $2.63). The law then requires that for any such worker, the combination of hourly pay and tips must be at least as high as the full minimum wage.
Our new factsheet, Job Growth Unrelated to States’ Tipped Minimum Wage explores the impact of tipped minimum wage levels on employment in the restaurant and food service job sectors. The new factsheet finds that:
- Historically, Massachusetts – with its low tipped minimum wage – has not reliably outperformed high tipped minimum states or the US average for job growth in the restaurant industry
- Despite Massachusetts low tipped minimum, the restaurant industry itself does not projection strong job growth in Massachusetts over the coming decade, nor meaningfully higher job growth in low tipped minimum states vs. high tipped minimum states generally
- Tipped workers in states with higher tipped minimum wages have higher earnings and lower poverty rates
All of our work on the minimum wage is available here
I have a couple of close friends pushing 40 who work as restaurant servers. The tipped minimum wage hasn’t been raised in Mass. since 1999. They don’t get paid enough, at $2.63 per hour, to cover their healthcare premimums. Generally they owe the restaurant money each month instead of collecting a paycheck.
As concerns the tipped minimum wage (and the minimum wage generally): would it not be beneficial for the restaurant industry to have fewer Massachusetts residents just scraping by? People like to eat out, but when finances are squeezed it’s among the first things to go.