Think about the last time you ate at a restaurant. Actually, think about any time that you’ve eaten at a restaurant. Every time you go out to eat, at the end of a bill is always the option for a tip. Everybody knows that leaving a tip is the polite thing to do, but what a lot of people don’t know is that many servers rely on those tips to make a living.
In America, minimum wage varies by state; but many states use the federal minimum wage of $7.25 an hour. However, many servers make less than that due to the laws surrounding tipped employees. A tipped employee is anybody in a job where they make $30 or more per month in tips.Then the employer is able to take a tip credit out of their minimum wage. A tip credit states that the employer can pay their servers as low as $2.13 as long as they make enough in tips to cover the difference.
One problem with this is the inconsistency of the tips that servers receive. Tips can be inconsistent due to a variety of factors. Tipping customs vary across different regions and countries. Foreign visitors often say that they are surprised with how much they are expected to tip in order to not be considered rude. Tips can also vary based on gender and race, as well as customers’ personal beliefs about tipping.
On average, restaurant servers make between $20,000 and $31,000 a year before taxes. The average cost of living for one person in America per year is around $44,000. This means that the average waiter is unable to afford to live in America on just one income and often has to get a second job, or rely on a partner to be able to afford housing and other expenses.
According to an analysis done by the congressional budget office (CBO), raising the minimum wage would cause a large number of low-wage workers to lose their jobs. However, the opposite has been proven by a study stating that in the years following the wage increase back in 2009, not only did employment rates increase, but so did consumer spending. The minimum wage has increased 22 times since it was first established in 1938, and in 2024 there are still many different organizations who are dedicated to the cause. The “Raise the Wage Act” was proposed in July of 2023 and if enacted in 2024, plans to raise the minimum wage to as much as $17 an hour by 2029.