Friday, June 15, 2012

On Tipped Female Workers

Getting your earnings mostly from tips is the lot of many in service industries.  It turns out that the usual gender gap in wages can be found in those industries, too:

"The sub-minimum wage hits women hard because 72.9 percent of tipped workers are women compared to less than half the overall labor force," says Allegretto, co-chair of the Center on Wage and Employment Dynamics at the Institute for Research on Labor and Employment of the University of California, Berkeley. "The federal tipped minimum wage was originally 50 percent of the regular minimum wage, but it has eroded over time to just 29.4 percent of the current minimum wage for all workers because it has been frozen since 1991 unlike the federal minimum wage, which was raised in 2007."

Allegretto's research shows that female tipped workers, overall, average 50 cents less per hour than their male counterparts because they are employed in lower paying sectors, such as food service and home health.
Among wait staff, the wage gap is even worse: women earn 83 cents less per hour than do men because they are more likely to be employed by fast food restaurants than fine dining establishments.


Rep. Donna Edwards, a Maryland Democrat, introduced a bill in 2009 that would have increased the tipped minimum wage to 70 percent of the regular minimum wage by 2012. Opposition by Republicans and the restaurant and hospitality industry, which employs the largest number of tipped workers, stymied the bill. Edwards plans to reintroduce the bill this spring.
But advocates are looking past Congress and pinning more hope on the states, many of which have stepped ahead of federal lawmakers.
Over half the states and the District of Columbia have tipped credits that are higher than the federal standard. These range from $2.33 an hour in Wisconsin to $7 in Hawaii.
Washington is one of seven states that has no tipped credit law. Employees' tips are excluded from the calculation, so employers pay the state's full minimum wage, $9.04 an hour, the highest in the nation.

Thus, a hike in the basic wages for those jobs would help women.

This is an interesting example of the way the gender gap in wages often appears:  Women tend to be congregated in the jobs which pay less within each industry.

The reasons for this are likely to be many but at least one audit study in Philadelphia in the 1990s found that when actors pretending to have the same work experience and other credentials auditioned for server jobs men got better offers than women.  Discrimination, in other words, cannot be ruled out as one of the causes for earnings differentials.

Note, also, that the customers can decide how much each worker is worth.  That may be OK or not, depending on the reasons the customers have for tipping someone or not tipping someone.