Chris Mills Rodrigo: Point
Until we raise the
minimum wage, tip!
Our nation’s paltry federal minimum wage of just $7.25 hourly is rightly criticized as far too little to sustain a worker, let alone a family, in 2025.
That’s bad enough, but did you know that there’s an even lower floor for workers who receive tips on the job? That’s right. The federal minimum wage for tipped workers is just $2.13 an hour — and has been for 30 years.
Theoretically, employers are meant to cover the difference if tips don’t raise hourly wages to the federal minimum. Cases of bosses failing to meet that requirement are commonplace.
Eight states have eliminated this tipped minimum, ensuring that tipped workers receive the same minimum as others. In the other 42 states, bartenders, servers and hotel workers are constantly exposed to wage theft.
Not only do tipped workers often end up making less than the minimum wage, but their lower floor also makes their livelihoods dependent on external factors, such as weather and customer traffic. It also exposes them to customer harassment, a massive issue for two-thirds of servers who are women.
“Many of my coworkers and I are pressured to tolerate inappropriate customer behavior because our livelihood depends on being likable,” said Red Schomburg, a One Fair Wage campaigner who worked as a bartender in Boston. “This especially harms women and contributes to the restaurant industry’s notoriously high rates of harassment.”
With that in mind, we can’t just stop tipping. Because the sub-minimum wage has been decoupled from the federal floor since 1996, businesses and policymakers have essentially shifted the responsibility of ensuring tipped workers earn enough to make ends meet to consumers.
We need to eliminate the tipped minimum and establish one fair wage for all workers. One that’s far, far above $7.25 an hour. Until then? Tip.
Raising tipped minimums to the same level as other workers has been successful when it has been tried. Despite complaints from industry groups, restaurants and server jobs have boomed since the District of Columbia began increasing the wage floor for tipped workers.
This has not been the approach of our federal government. Instead, lawmakers have toyed with the margins of the real issue of insufficient pay.
During the 2024 presidential campaign, Donald Trump proposed exempting tips from federal taxes. And now a similar policy, allowing for tips to be deducted from taxes, was slipped into the Republican “Big Beautiful Bill.”
At first, that sounds like a pro-worker policy. But looking past the surface reveals a policy that would help Wall Street executives more than servers.
Many tipped workers in America — two-thirds, by one measure!— don’t earn enough to have to pay federal payroll taxes in the first place. On the other end of the spectrum, some experts have warned that hedge fund managers or lawyers would likely reclassify some of their incomes as tips to avoid taxes.
Removing taxes on tips would alleviate pressures to raise tipped minimum wages and encourage more industries to treat their employees as tipped workers. No wonder the National Restaurant Association, which has long opposed wage increases for servers, has endorsed this policy.
Admittedly, there are many other places where tipping has become the norm, but employees do not receive sub-minimum wages, such as in coffee shops. While frustration with paying an extra buck or two on top of an already expensive latte is understandable, focusing on tipping is misguided.
Instead, we should wonder why workers at global chains need tips to meet their basic needs despite working full-time jobs.
The solution to both problems is the same: Pay people family-sustaining wages, wages they deserve, and no one will have to complain about onerous tips ever again.
Chris Mills Rodrigo is the managing editor of Inequality.org at the Institute for Policy Studies. He wrote this for InsideSources.com.
Christine Flowers: Counterpoint
Unhappy with tips jobs?
Get another job.
The other night, after the House passed the “Big Beautiful Bill of Goods” (BBBOG), I went out to dinner at one of my favorite restaurants in Philadelphia. I know the people there; they are friendly, hardworking, and they allow me to speak Italian with them. It is a place where I can forget that I am in a city where some of the trash is piling up on street corners (the garbage collectors are on strike), and some people are marching through those streets yelling about genocide. This restaurant is my Italian home away from home.
After enjoying my Carciofi fritti and tagliatelle alla panna, all washed down with an Aperol Spritz, I was faced with an existential crisis. Pondering the check, which was quite reasonable, I had to decide whether to leave the 40 percent that I always tip at this restaurant I love, or cling to my principles and do what I said I would do on Facebook: leave nothing more than a 10% token.
I made this vow of gratuity poverty after reading about the “no tax on tips” provision in the BBBOG. This, among many other aspects of the egregious mess that Congress passed, was one of the things that angered me the most. Why give special treatment to money you earn from tips, as opposed to all the other ways hard-working Americans pay the bills?
Enough about food industry workers making their living on tips because they earn so little in their regular paychecks. Enough about how they work so hard to make sure that we all enjoy magnificent dining experiences (yeah, right.)
I’ve heard these arguments repeatedly. My response comes from my “Blink and you will miss it” foray into the food-service industry.
I worked at a fast-food restaurant, which is even more grueling than working in a trendy bar or a Michelin-starred restaurant.
Oh — and no tips.
Turns out you don’t get a gratuity after waiving “Happy Trails” to a cranky customer who just told you to do something anatomically impossible to yourself. So please, excuse me if I don’t have much empathy for those who say they shouldn’t have to pay taxes on their income.
Tips are income, period. And that income averages $25 an hour for wait staff at full-service restaurants, according to the payroll company ADP. At upscale restaurants, $50 an hour is not uncommon.
The solution for people who aren’t happy with what they’re earning from tips: Get another job.
Maybe teach in a Catholic school, where they don’t get tips and their entire paltry income is taxed. Maybe become a trash collector where the conditions of your employment are likely far worse than a job serving up platters of pasta. Perhaps become a healthcare worker and empty bedpans, with no tips, for minimum wage.
Whatever you do, though, do not try to convince me that your tips should get a subsidy from fellow taxpayers.
In case you missed it, yes — I am outraged by Congress approving one of President Donald Trump’s most pandering campaign promises. I doubt this put him over the top last November, but I do remember him out on the campaign trail talking like some 21st-century Emma Goldman about the value of the proletariat, and how they needed a break from the establishment.
Giving one group of people a special tax break, whether or not they need or deserve it, is an insult to the other hardworking Americans who show up every day, do their jobs, and rarely get so much as a “thank you,” much less a 20% tip.
I suppose I now have to learn how to cook.
Christine Flowers is an immigration lawyer in Philadelphia. She wrote this for InsideSources.com.m.
