Photographer: Luke Sharrett/Bloomberg

Higher Wages for Servers Could Help Close the Gender Pay Gap

Higher wages for tipped occupations also come alongside lower women's poverty rates
From

Raising the minimum wage for U.S. workers who receive tips, which has been frozen for 25 years, may shrink the gender wage gap. 

In eighteen states, tipped workers are entitled to a base wage of only $2.13. That’s less than a third of the federal minimum wage, which stands at $7.25 per hour — the logic is that gratuities will boost the workers' pay up past that normal floor. But in eight states, including Alaska, California, and Washington, employers are required to pay workers the federal minimum wage regardless of the amount they get in tips.

In those so-called "equal treatment" states, women on average are paid 82 cents for every dollar their male counterparts make. That compares with a 22 cent wage gap in states that adhere to the federal tipped minimum wage of $2.13, according to findings from the Washington D.C.-based National Women’s Law Center. 


Equal treatment states with higher wages also help lift tipped female workers out of poverty. The poverty rate for women in tipped jobs in states with a higher minimum wage is 27 percent lower than in states that abide by the smaller federal wage.

Beyond tipped workers, women at large benefit in equal treatment states where "the wages are higher, the poverty rates are lower, and there is less inequality,'' said Jasmine Tucker, director of research at the law center. The poverty rate for all women living in states with higher tipped wages is 13 percent lower than in states that remain at $2.13.

The report comes at a time when a higher minimum wage is a key part of the national discussion about helping workers, who have seen their pay stagnate in recent decades. Both Democratic presidential candidate Hillary Clinton and Republican Donald Trump have said they support a higher minimum salary. Opponents point to studies showing that higher wage floors can reduce employment. 

benchmark-new

 

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE