Opinion: Tipped into poverty

POSTED: 06/16/14 10:48 PM

The Editorial Board of the New York Times addressed an issue recently that also plays in St. Maarten’s tourism oriented service industry, but its views did not meet with universal approval. Read and judge for yourself:

“When Senate Republicans recently blocked a vote to raise the federal minimum wage, they snubbed the estimated 27.8 million people who would earn more if the measure became law. The hardest hit are the roughly 3.3 million Americans who work for tips, nearly three out of four of whom are women. Workers in predominantly tipped jobs — including restaurant servers, bartenders, hairstylists – are twice as likely as other workers to live below the poverty line. They need a raise, and Congress should give it to them.

The current minimum wage for such workers, $2.13 an hour, has not been raised since 1991 — testament to the power of the restaurant industry. For nearly 30 years after the minimum wage was first instituted, in 1938, restaurant owners were exempt, and waiters and waitresses had to live on tips alone. Now, an employer of tipped workers is in compliance with the law as long as $2.13 plus tips equals at least $7.25 an hour, the minimum wage for other workers. The Democratic proposal rejected by Republicans called for the tipped wage to rise gradually so that by 2020 it would equal 70 percent of the proposed new minimum of $10.10 an hour, adjusted annually for inflation.

The puniness of the tipped wage is not the only problem. One of the most prevalent wage violations found by the Department of Labor is the failure by employers to adequately “top up” wages when tips do not work out to at least $7.25 an hour. Violations also include failing to pay the full minimum wage when tipped workers spend considerable time on cleaning, cooking or other non-tipped work, as well as requiring servers to share their tips with other employees who do not typically receive tips.

From 2010 to 2012, the Labor Department found wage and hour violations in nearly all of its 9,000 investigations of full-service restaurants, including, but not limited to, tip violations. One large case recently brought by the department for tip violations against Chickie’s & Pete’s, a chain of sports bars based in Philadelphia, was settled in February with the chain agreeing to pay servers and bartenders $6.8 million in back pay and damages.

Low wages plus wage theft equals poverty. At the very least, the tipped minimum wage needs to be raised. Ideally, lawmakers would abolish the separate minimum wage for tipped workers in favor of one robust minimum for all workers, as seven states already have done.”

But Dawn Sweeney, president and chief executive of the American National Restaurant Association strongly disagrees with the view the New York Times presented, as appears from the following reaction:

“You portray an unfair view of the restaurant industry and the opportunities that it provides for workers, particularly women.

Restaurants provide flexible opportunities to women of all ages and at all stages of their careers, from managers and owners to first-job seekers and retirees. Our research shows that tipped workers earn a median hourly wage of between $16 for entry-level workers to $22 for more experienced servers.

A survey we conducted found that more than 90 percent of women who have worked in restaurants say it is a good place to get a first job and learn skills, and 75 percent say they would recommend that a family member or friend seek a job at a restaurant.

Female-owned restaurants are growing at a faster rate than the overall industry. According to the Census Bureau, between 1997 and 2007, the number of restaurants owned by women jumped 50 percent, which is almost one and a half times the growth in the overall industry during the same period.

We are proud of our role in providing well-paying jobs and opportunities for American workers, men and women alike. The restaurant industry helps people get ahead and achieve the stability to secure fulfilling careers.”

After reading all this, we realize that we have a lot of employees in a diversity of jobs in St. Maarten that also depend for their income at least in part on tips. How does that work out and what should change? Send your experiences to todaymanagersxm25@gmail.com and we will further address the local situation.

 

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