Equal Pay Day: Why women bear the brunt of 'subminimum' wage

Aarthi Swaminathan
·Reporter
·4 min read

While D.C. debates raising the federal minimum wage, a new report highlights how tipped female workers are being crushed — financially and emotionally — under the minimum cash wage of $2.13 per hour.

The report by One Fair Wage and UC Berkeley Food Labor Research Center found that over two-thirds of 5 million tipped workers in America are women. When workers partially rely on tips, they can be paid at a minimum cash wage or "subminimum wage" rate of $2.13. (The minimum cash wage was last raised in 1991.)

"Because tipped restaurant workers are 66% women and non-tipped restaurant workers are 46% women, the subminimum wage for tipped workers creates legislated gender pay inequity in the restaurant industry," the report stated, "perpetuating the gender pay gap and leading to disproportionately higher rates of poverty for women."

The federal minimum wage is at $7.25, last raised in 2009. President Joe Biden had proposed eliminating the tipped subminimum wage on the campaign trail, though many lawmakers are opposed to doing so.

“$2.13 is outrageous,” Valerie Jarrett, a former advisor to the Obama administration, said during a press conference organized by One Fair Wage to share the findings of the report. “We have to have a holistic approach. We have to pay a living wage. We need to make sure that we're not relying simply on tips to be able to get by.”

As Phase One of reopening begins in Northern Virginia today, a waitress with a face mask to protect against the coronavirus disease (COVID-19) serves diners at a restaurant in Alexandria, Virginia, U.S., May 29, 2020.  REUTERS/Kevin Lamarque
A waitress with a face mask to protect against the coronavirus disease (COVID-19) serves diners at a restaurant in Alexandria, Virginia, U.S., May 29, 2020. REUTERS/Kevin Lamarque

'We are gambling with our lives'

Many of these tipped workers also experience sexual harassment on the job: The authors noted that in a survey of more than 1,600 tipped workers in fall 2020, 71% of women said they had been sexually harassed at least once during their time in the restaurant industry.

“Tipped workers were more likely to be treated in sexist ways; more likely to be targeted with sexually aggressive and degrading behavior; received more persistent and intrusive sexual attention, were more likely to be coerced or threatened into sexual activity they did not want and were more likely to be victims of sexual assault than their non-tipped counterparts,” the report found. “These differences between tipped and non-tipped women workers’ experiences were not only statistically significant but substantial.”

One restaurant worker, Hayley Holland, shared her first-hand experience of harassment in her workplace, telling the press conference that frustrations arise from “the winks, the nods, the pet names, the persistence of men asking for my personal information and how normalized these behaviors are, and how working women including myself tolerate them because we know that if we don't smile, nod and laugh it off, we're not going to get a tip.”

Jarrett supported the calls to raise the minimum wage — especially for tipped workers — and advocated for them to also receive not just equal pay, but also receive paid leave and paid sick days.

“We are gambling with our lives," the Phoenix-based Holland added. "I was speaking to a woman in the industry last night who said, 'It's the nature of the game.' She was right. We are literally rolling the dice on our personal safety, well-being, and our ability to afford to live.”

'Elena the Essential Worker' a 24-foot statue reminiscent of the famous Rosie the Riveter icon stands erected as restaurant workers protest to demand to be paid full minimum wage with tips due to risking exposure to the coronavirus disease (COVID-19) as local restaurants commence indoor dining in Manhattan, New York City, U.S., September 30, 2020. REUTERS/Andrew Kelly
'Elena the Essential Worker' a 24-foot statue reminiscent of the famous Rosie the Riveter icon stands erected as restaurant workers protest to demand to be paid full minimum wage with tips due to risking exposure to the coronavirus as local restaurants commence indoor dining in NYC, September 30, 2020. REUTERS/Andrew Kelly

'This is about dignity'

In seven states that require employers to pay the full minimum wage to tipped workers with tips on top, the report noted, the “poverty rate among women tipped restaurant workers... is 50% lower than in the states with a $2.13 subminimum wage for tipped workers.”

The seven states are Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington.

Senator Bernie Sanders (I-VT), who joined the press conference, said that this issue is a “simple moral” one.

“In the wealthiest country on earth, people should not be working for starvation wages,” he added. “$2.13 an hour, and that has not been raised since 1991 — 30 years ago, maybe, just maybe, it might be time to raise that tipped wage.”

If the federal minimum wage were raised for tipped workers, that would mean more than just a financial boost.

“This is about dignity and not having to tolerate this abhorrent behavior, because I don't need your tip, [man who is] repeatedly asking me what I'm doing after work,” Holland stressed. “$15 for all workers including tipped workers means security, safety, and the end of a sexist, racist legacy. And that's what we need: one fair wage.”

Aarthi is a reporter for Yahoo Finance. She can be reached at aarthi@yahoofinance.com. Follow her on Twitter @aarthiswami.

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