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The impact of raising the minimum wage on women

Ensuring a robust tipped minimum wage

OW Staff Writer | 3/27/2014, midnight

“Most people who would get a raise if we raise the minimum wage are not teenagers on their first job—their average age is 35. A majority of lower-wage jobs are held by women. These Americans are working full-time, often supporting families, and if the minimum wage had kept pace with our economy’s productivity, they’d already be earning well over $10 an hour today. Instead, it’s stuck at $7.25. Every time Congress refuses to raise it, it loses value because as the cost of living goes higher, minimum wage stays the same.”

  • President Barack Obama, remarks at Central Connecticut State University, March 5, 2014

Over the past 30 years, modest minimum wage increases have not kept pace with the rising costs of basic necessities for working families. No one who works full time should have to raise his or her family in poverty. President Obama supports raising the minimum wage to help build real, lasting economic security for the middle class and has made it a key part of his plan to create more opportunities for every hardworking American to get ahead in 2014.

The president knows this is important for workers, and good for the economy. That is why the he has already signed an executive order to raise the minimum wage and tipped minimum wage for federal contract workers and is calling on Congress to raise the national minimum wage from $7.25 to $10.10 per hour and index it to inflation thereafter. Also he advocates raising the tipped minimum wage for the first time in more than 20 years. Increasing the minimum wage and the tipped minimum wage is especially important for women, who make up more than half of the workforce in jobs that pay the minimum wage and tipped occupations. The White House has released a new report that lays out how women and the workforce would benefit if Congress passed legislation to raise the national minimum wage and tipped minimum wage for all Americans. Key findings from the report include:

Raising the minimum wage is especially important for women because:

• Women in the workforce are more highly concentrated in low-wage sectors such as personal care and healthcare support occupations.

• Women account for more than half (55 percent) of all workers who would benefit from increasing the minimum wage to $10.10.

Women also make up the majority of workers in predominantly tipped occupation. Under Federal law, employers are allowed to pay a “tipped minimum wage” of $2.13 to employees who regularly earn tips as long as their tips plus the tipped minimum wage meet or exceed $7.25 per hour.

• Women account for 72 percent of all workers in predominantly tipped occupations such as restaurant servers, bartenders, and hairstylists.

• Average hourly wages for workers in predominantly tipped occupations are nearly 40 percent lower than overall average hourly wages.

• Workers in predominantly tipped occupations are twice as likely as other workers to experience poverty, and servers are almost three times as likely to be in poverty.