Tips 104 – Yes, People Will Still Tip

Wage Basics

Tips 104 – Yes, People Will Still Tip

In local fights to eliminate the tipped minimum wage, there’s been one surprising advocate against reform: tipped workers themselves. Fed lies by their employers and managers, many tipped workers have worried that they’re going to lose their tips, and even their jobs, if their employers are forced to pay them the standard minimum wage. Needless to say, those fears are unjustified.

There are seven states that already have the same minimum wage for both tipped and untipped workers: Alaska, California, Nevada, Montana, Minnesota, Washington, and Oregon. If there was any evidence that eliminating the subminimum tipped wage would lower the number of restaurant jobs available or lower the amount of money that tipped workers make in total, we would see it in those states. Spoiler alert: we don’t.

Studies show that restaurant industry growth in those seven states is strong, so strong in fact that job growth in the restaurant industry and restaurant sales per capita in those seven states are higher than the national average. There’s a good argument to be made that based on that data, the restaurant industry actually does better in states where tipped workers make the standard minimum wage.

Fears that customers will stop tipping if workers are paid the minimum wage are also unfounded. Evidence shows that waiters and bartenders earn on average about 20 percent more, after tips, in states where tipped workers must be paid the full minimum wage, and that customers tip about the same as in other states. 

And when you think about it, that makes sense. When was the last time you went out to dinner and asked yourself how much your server was earning as a base wage when you were deciding how much to tip? Never, right? That’s not how diners make their tipping decisions. Restaurant owners have done a great job scaring their workers into fighting against a raise, but the facts are crystal clear: paying tipped workers the minimum wage is good for tipped workers, period.

NEXT: Tips 105 – The Gig Economy Scam →