Minimum Wage In Tips

With the presidential elections right around the corner policy on minimum wage has come up for debate once again. William Hoar from The New American argues in his article “Misguided minimum wage mandate” that raising the minimum wage will only result in loss of jobs. According to the editorial board at USA Today, “ inflation adjusted income of the top 1 percent has grown by 58 percent and the remaining 99 percent has only grown by 6.4 percent”. They then state that a raise to 15 dollars an hour only comes out to an annual income of 30,000 a year. It is true that the majority of the minimum wage workforce is from ages 18 to 25 but considering the fact that that age group are the people attending college and paying off student loans, then it should be expected that they are unhappy with such a low salary. At the minimum wage of 7.25 that comes out to 1200 dollars per month for the cost of living. Therefore raising the minimum wage will not only increase morale, it will also reduce rates of poverty.

“A 15 percent increase in the minimum wage nationwide would destroy about 290,000 to 590,000 young people's jobs, and about 400,000 to 800,000 jobs overall” (Henderson, David R). Due to the Fair labor Standards act, the federal minimum wage, or the lowest you can pay an employee for work, currently stands at $7.25 an hour. Although a number of Americans think that raising the minimum wage would benefit our country, it would actually bring a number of problems to our economy, such as a rise in job loss and high school dropout.

The controversy over what to establish as the official minimum wage in the United States has been debated and argued over for many years. Due to inflation, the gradual increase of pricings due to a saturation of printed currency, the minimum wage for workers has to be increased in order to compensate for the ever-fluctuating value of the U.S. Dollar. Many today are rising to the conclusion that a minimum wage of fifteen dollars an hour is necessary. This motion is designed to keep those who have minimum wage income out of poverty and to increase the amount of money in the consumer’s pocket overall. However, this particular increase in minimum wage will lead to the inevitable downfall of the United States’ economy and be a catastrophe for the working class.

For example there is a big gap in the amount people get paid in the state in Nebraska, where the tipped wage is $2.13 and the general wage is $9.00 an hour. It is also unfair because in other states like Montana, Nevada and California have little to no gaps, this means that these states are being payed the same amount in tipped wage and general minimum wage.

The thought that the simple act of tipping could solve such a complicated problem is an attractive thought, but it is just not probable. The authors believe that enough people will automatically tip more because they care about the income inequality gap. However, this is unlikely since Americans seem not to care, even if it is important to do so. For example, the voter turnout in the United States is very low. If people are not going to vote for their leaders, then how can the authors expect them to give more money to minimum wage

Barbara Ehrenreich establishes her claim on how society and the government are detrimental to people in poverty. The negative generalization that minimum wage workers experience in America affect their ability to move from the low class and into the middle class. I agree with Ehrenreich because many people who are in poverty are categorized as lazy and many people also believe that poverty does not occur on a large scale in the US. While government assistance does exist, most individuals surpass the threshold for welfare, yet still can not afford basic necessities.

We all need money. We need it to buy food or to pay for bills in adult life. It is a necessity for us to survive in this world. The minimum wage law was introduced in 1938 during the Great Depression as part of the Fair Labor Standards Act. These laws require employers to pay an employee nothing less than a set amount . The first wage set was 25 cents per hour, and recently in 2009 to $7.25. Congress only raises the minimum wage when the economy is healthy, mainly when there is low unemployment (Sherk). Ultimately they should not increase the federal minimum wage. It hurts the less fortunate, it keeps people below the poverty line and creates unemployment.

I agree that we shouldn't increase the minimum wage for non-tipped employees. If the non-tip wage was increased most workers would lose their jobs, or layed off so that the other workers can make the desired amount they are wanting. Many restaurants would have to also close down due to lack of bussiness.

During the late 19th century, and even a few decades into the 20th century, American laborers worked intensely. They worked both many hours and with very little pay. The bosses of these workers would pay them as much or as little as they saw fit. It wasn’t up until the year 1938 that the federal minimum wage was established in America at $0.25 per hour (that being equal to about $4.21 now). It was one of the greatest things in America at that time. It was revolutionary as a matter of fact.

Yes, it is fair for everyone getting paid the same, but it can be hard to make sure your buisness will continue to grow. Just like the manager in "Cannot" mentions, "I frear that Waffle Now will lose many customers becase of this. The resturant may be forced to close." My family owns a resturant in Taos NM, and I understand how hard it will be to keep the buisness going if he raises the wages. Its only fair to keep paying the tipped minimum wage, just to keep the resturant open.

In the essay “The Case Against Tipping” by Michael Lewis, Lewis strongly states his feelings against tipping and also whether tipping is an act of kindness or an obligation. One of his main views are, most food industries have eye grabbers that push customers to think about giving an extra tip. Lewis has very interesting arguments, but has very few examples; which makes his claims unsupported.

This article argues that restaurants should pay their employees a liveable wage. “Diners, either through their political representatives or their own complaints to managers, should argue that workers be given: Hourly wages at or above a living wage for individuals” (The Boston Globe). This is an argument about a concern over policy, and how restaurants should not be able to pay their workers a tipped minimum wage. “Meanwhile, lawmakers should summon the courage to reject the demands of the National Restaurant Association, which is largely responsible for Massachusetts’ ‘tipped minimum wage’ — under which restaurants are allowed to pay workers just $2.63 [per hour] with the hard-to-enforce understanding that tips will make up the rest of the way to at least $8 per hour” (The Boston Globe).

Tipping has emerged as a major method of compensating wait staff ever since the 1960s when Congress passed the provision within Fair Labor Standards Act legislation which introduced the “tip credit” (Allegretto & Cooper, July 10, 2014). The FLSA provision set the minimum wage for tipped employees at $2.13 per hour, given that the employees would ‘earn’ $7.25 per hour from tips. The government considers employees who earn more than $30 per month as tipped employees. The tipped minimum wage has adversely impacted tipped employees, which includes barbers, stylists, wait staff, doormen, etc., such that they need to provide a high level of service so they can receive generous tips. The tipped minimum wage provision assigns tipped employees to high poverty due to their low income salary levels.

Developments are showing that it’s time now for American small businesses to gear up for what this trend might mean for the future. There are few expenses that affect business owners more than employee wages. Experts estimate that semi-variable costs, like salaries and wages, account for anywhere between 30 to 40 percent of a company’s total revenue. As expected, the remaining revenue covers other overhead costs like operational expenses, inventory, leasing agreements, insurance, and everything in between. The fear for many small business owners, specifically those throughout the restaurant industry, is that if a federal minimum wage increase is authorized, it will significantly impact how they are able to balance a budget, with many already

Supporters also sometimes claim that more money can be made through tips than a business would otherwise pay. In practice, however, I have rarely seen this happen. A good day of tips at the commissary is not enough to make up for several poor days and almost never brings my average pay for a week to more than minimum wage.