Policy Brief | Oct. 2014 |View the Press Release

New York’s Tipped Workers and the Sub-Minimum Wage

Apurva Mehrotra

Summary: In 2014, hundreds of thousands of workers earning the minimum wage in New York State received a raise. In a deal reached by the New York State legislature and Governor Cuomo, the minimum wage rose from $7.25 an hour to $8.00 an hour, with further increases scheduled in 2015 and 2016. However, one important group of workers was left out of the deal: 172,000 tipped workers in the food services and accommodation industry. The minimum wage for these workers remains at just $5.00 an hour, 63% of the current statewide minimum wage and not enough, even when factoring tips, to lift many of these workers out of poverty. This new report looks at the status of the tipped workforce in New York State and New York City and finds high rates of poverty and economic hardships. We also find that these workers, particularly in New York City, tend to be older and more likely to be heads of households than similar workers in other parts of the countries. We argue that New York should eliminate the disparity between the sub-minimum wage for tipped workers and the statewide minimum wage, as seven other states have already done (with Hawaii soon to be an eighth).

Issues: Economic Mobility & Security, Workforce & Poverty

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