The mandatory minimum wage for workers who earn tips (such as waitresses and nail technicians) is set low and for a good reason. By providing great service, they earn tips from customers that are often more than any higher minimum wage would deliver.
Don’t tell that to AOC though. In essence, she’s pushing to get rid of the merit-based tips system that rewards good service by demanding that the tipped minimum wage be the same as the regular minimum wage.
AOC returned to her roots last week as part of a union-orchestrated publicity stunt to push for a higher tipped wage.
For one hour, she whipped up and served drinks to a restaurant full of food and nail salon workers dressed in coordinated t-shirts to protest for “one fair wage.” As her “origin story” goes, according to the New York Times, she went “from bartender to underdog congressional candidate to face of the progressive left.”
It’s admirable how far she’s come in a short time. Her ascension to power is fueled by an adoring media and big social media following.
However, she continues to expose her own lack of understanding about how business works and the impact of how her proposed policies will hurt more low-wage workers than it will help.
AOC co-sponsored a bill that would double the federal minimum wage to $15 an hour. New York State is also considering joining seven other states in bringing their minimum tipped wage in line with their minimum wage.
Sharing her stories of harassment and uncertain pay with other workers who may have experienced the same, made for good news fodder and photo ops.
However, tipped workers understand that tips are rewards for good service, not an unfair burden. Their minimum wage is intentionally set low because they can make up the difference in tips — and exceed the minimum wage. Employers are responsible to make up the difference between cash wages and tips if they don’t add up to at least the federal minimum wage,
However, increasing the tipped wage significantly increases costs for employers. To stay afloat or profitable, employers may cut worker hours or cut staff, which are outcomes that no one wants. Research shows that raising the tipped minimum wage leads to Iess work and smaller tips. Customers won’t tip as much or at all especially as prices rise.
When Washington, D.C. voters approved a $15 per hour minimum tipped wage, restaurant workers protested saying voters did not understand that this would actually hurt them and that they wanted their regular tipped minimum wage back.
AOC is playing on the emotions of low-wage workers, but she shouldn’t hide the facts and research.
Here’s one fact she can start with: the restaurant where she was a bartender shut its doors because they could not afford the rising minimum wage.