FOR IMMEDIATE RELEASE
December 10, 2024
Contact: William Lutz 202-785-5100
New IWPR Report: Tipped Minimum Wage Harms Women
Washington, DC — The Institute for Women’s Policy Research (IWPR) has released a new fact sheet exposing the human cost of the federal tipped minimum wage, which has remained frozen at $2.13 per hour since 1991. The report clearly demonstrates that among its many flaws, the tipped minimum wage disproportionately harms women, particularly women of color, jeopardizing their financial security and ability to lift themselves out of poverty. As gender wage issues take center stage in national conversations, IWPR’s report also calls for systemic reforms to address wage gaps, economic instability, and workplace inequities.
“Almost every American has worked for tips at least once in their life. And IWPR’s report confirms what all those workers already know: it’s almost impossible to make ends meet when your income consists of a pitiful minimum wage plus tips. This is especially true for women,” said Dr. Jamila K. Taylor, president and CEO of IWPR. “The tipped minimum wage is rooted in our nation’s dark racist and misogynist history. It’s time for our country to abolish this failed employment model.”
“At IWPR, we believe economic justice begins with fair pay for all workers, especially women, who are unfairly affected by the tipped minimum wage,” said Dr. Taylor. “The need for change is evident across the country, and we commend the states that have taken action to end this outdated practice. Their commitment to wage equity is a crucial step toward building a more just and equitable economy for everyone.”
Key findings from the fact sheet include:
Women Drive the Tipped Wage Workforce: Women dominate tipped minimum wage occupations, comprising nearly two-thirds (65.5 percent) of servers, including waitstaff and bartenders, who represent the majority of workers in these roles.
Gender Pay Gap Persists for Servers: Women servers earn only 78.5 percent of what male servers earn, and women from all racial and ethnic groups make less than White men in the same jobs, underscoring persistent wage inequities.
Abolishing Tipped Minimum Wage Lowers Poverty: Servers working full-time year-round earn much higher wages and face lower poverty rates in states that have abolished the tipped minimum wage, such as Nevada, Washington, and Oregon, and in states that have passed a higher tipped minimum wage, such as Hawaii and Colorado, compared to states that follow the federal tip credit of $2.13.
Federal Tipped Wage Frozen While States Act: For over 30 years, the federal tipped minimum wage has remained at $2.13 per hour. Today, 15 states adhere to this federal rate, while 29 states have raised it yet still keep it lower than the standard minimum wage. Seven states have abolished the subminimum wage entirely, ensuring tipped workers earn the full state minimum wage.
The study concludes that the tipped minimum wage creates economic insecurity for workers and, most notably, undermines women, leaving them vulnerable to poverty and exploitation. IWPR advocates for abolishing this system and adopting a “one fair wage” policy that guarantees all workers are paid at least the full minimum wage. A nationwide shift to one fair wage would not only enhance economic security for workers but also address longstanding gender and racial wage gaps, providing a more just and equitable future for all.
For more information on the fact sheet and IWPR’s ongoing work to promote economic equity, please visit IWPR.org.
The Institute for Women’s Policy Research strives to win economic equity for all women and eliminate barriers to their full participation in society. As a leading national think tank, IWPR builds evidence to shape policies that grow women’s power and influence, close inequality gaps, and improve the economic well-being of families. Learn more at IWPR.org and follow us on Twitter.
