Joint legislation would raise minimum wage for tipped workers

LANSING—Senator Coleman A. Young II (D–Detroit) and Representative Pam Faris (D-Clio) announced joint legislation today that they will be introducing to increase the minimum wage for tipped workers in Michigan. At today’s event, the legislators were joined by numerous service workers, supportive business owners and community groups all looking to establish “one fair wage” for all Michigan workers.

“As public servants, it is our job and our responsibility to help raise people up, to fight for fairness and equality at every turn and to ensure the economic success of all citizens regardless of what they do,” said Senator Young. “That means that when we see inequity, we have an obligation to right those wrongs. Right now, some workers in Michigan are still being paid less than half of the minimum wage, and it’s simply not right. Our legislation will ensure every Michigan worker is being paid a fair wage.”

Young and Faris will be introducing legislation in the Senate and House that will incrementally raise the hourly pay rate of tipped workers. The tipped worker minimum wage is currently set at 38% of Michigan’s minimum wage. Under these bills, on January 1, 2016, it will raise the tipped worker wage to 59% of the minimum wage, and on January 1, 2017, it will be raised to 80% of the minimum wage. Finally, the bills will fully eliminate the tipped minimum wage in 2018, establishing one universal minimum wage, regardless of whether or not the occupation receives tips.

“A majority of these sub-minimum wage jobs are held by minorities, women and single parents, and they’re paid so little that many are still in poverty and dependent on government assistance,” said Representative Faris. “This legislation to increase the wages of these workers will create equality, stability and independence for them while benefiting our economy and state budget as well.”

Seven other states, including more conservative-leaning states like Alaska, Montana and Nevada, have already gotten rid of their sub minimum wage. A number of other states and local governments are considering it. Despite the industry lobbyists’ negative claims about the adverse effects of raising the tipped wage, those states actually have higher restaurant sales, higher employment growth, and maintained reasonable menu prices.

“It’s important that we continue to raise awareness about low tipped wages and the negative economic impact it has on workers, businesses and our communities,” said Naomi Debebe, a restaurant server who has worked in the industry for more than sixteen years. “I appreciate the efforts of Senator Young and Representative Faris. It’s good to know that we tipped workers are not alone in this fight and that our elected officials are standing up for us.”

Michigan’s tipped workers currently make $3.10/hour, which is $5.05 less than minimum wage workers. That means these workers currently make a base pay of only $202 a week before taxes.

There are approximately 160,000 tipped workers in Michigan. Two out of three tipped workers are women. One in three tipped workers are parents. Half of tipped workers are 30 years old or older. One in seven tipped workers rely on food stamps. Tipped work is one of the fastest growing occupations and one of the lowest paid, especially for workers of color. In states with the lowest minimum wage, the poverty rate for workers of color is nearly double that of states with the highest minimum wage.

“Living with the uncertainty of low tipped wages is not something that can be done in 2015,” said Godwin Ihentuge, Founder of Yum Village Pop-Up Restaurant. “Providing a fair wage to all workers is common sense and the reform needs to take place now, because without it, we are essentially keeping a majority of our service industry in poverty.”

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