By Mary Gatta
I met Diane, a 69-year-old server, while doing research on aging and economic insecurity. She spent the past five decades in the restaurant industry, dependent on customers’ tips to survive. She has never owned a home or built up savings.
Diane lives shift to shift, hoping to make enough in tips each week to cover her basic life expenses. Her greatest fear is that she will wind up homeless. And while she is on a waitlist for senior housing, that can take years to come through. Her backup plan, if she loses her apartment, is to live in her car with her cat.
Diane is among the 80 percent of American restaurant workers who live in economic insecurity. In all but seven states, tipped workers receive a subminimum wage, often as low as the federal minimum of $2.13 per hour.
While living on tips can be a route to economic security for some, most tipped workers in our country live economically precarious lives. The subminimum wage means workers must depend on the whims of customers. Yet tips tend to vary greatly depending on a server’s appearance – factoring in race, gender and attractiveness. As workers age, they tend to be viewed as less attractive, which can reduce tips.
Too often older restaurant workers have paid relatively little into Social Security – the only guaranteed retirement income they have. As a result, the benefits to which they are entitled are often not enough to provide an economically secure retirement. The average benefit for an individual worker is just over the federal poverty line.
Yet there are policies that can improve tipped workers’ economic prospects. Eliminating the tipped subminimum wage by paying One Fair Wage – the full minimum wage plus tips – can boost the economic security. Workers would be better able to plan for expenses and set aside savings.
We know that in the seven states with One Fair Wage, including California, Oregon and Washington State, tipped workers receive higher take-home pay. Rates of poverty, wage theft and sexual harassment are all lower as well, and restaurants are thriving.
Here in New York, Gov. Andrew M. Cuomo has expressed support for phasing out the tipped subminimum wage, and the Department of Labor held hearings across the state this summer to assess the impact of transitioning to One Fair Wage.
Thousands of New York workers like Diane are living on the edge, just a paycheck away from financial ruin. They need an ally who will ensure they’re paid fairly for their hard work. I hope Gov. Cuomo will push ahead with One Fair Wage.
Mary Gatta is an associate professor of sociology at Guttman Community College in Manhattan and author of the book, “Waiting on Retirement: Aging and Economic Insecurity in Low Wage Work.”