With Gov. Cuomo’s announcement today that the minimum wage for tipped workers in New York will be increased from $5.00 to $7.50 an hour, hundreds of thousands of workers whose incomes are far too reliant on tips will feel a greater sense of economic stability. The increase will impact food service, hospitality, and other tipped workers across the state, at a time when employment in the service sector is booming.
A recent Community Service Society (CSS) report found that tipped workers in New York are more than twice as likely to live in poverty as non-tipped workers and are more reliant on public assistance. The rationale behind a separate, lower minimum wage for tipped workers is that they can make up the difference in their base wage with tips. However, our study found that while this may be the case for tipped workers at the top of the earnings spectrum, far too many tipped workers struggle to stay out of poverty even when including tips.
In New York City, our study found that tipped workers are more likely to be older, work full-time, and support children than tipped workers nationwide. The notion that tipped workers are predominately teenagers earning a little money on the side simply doesn’t ring true, and we are pleased that the governor has recognized this with his decision today.
Eight states do not have a separate minimum wage for tipped workers, and New York City residents are prepared for New York to be next. According to CSS polling data from its annual Unheard Third survey, eight out of ten New Yorkers favor raising the tipped minimum wage so it is equal to the overall minimum wage, including two-thirds who are strongly in favor. Support is strong among both low and high-income New Yorkers, and both Democrats and Republicans.
We hope New York will work toward eliminating the separate, sub-minimum wage for tipped workers altogether. Today’s announcement was a positive step in the right direction.