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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 ...

• About half of all workers in predominantly tipped occupations would see their earnings increase as a result of the president’s proposal.

Because the national tipped minimum wage has been stuck at $2.13, as a result, tipped workers are at greater risk of not earning the full minimum wage, even though employers are required by law to ensure that employees’ tips plus their employer-paid wage meet or exceed the full minimum wage.

• Since 1991, the tipped minimum wage has declined by 40 percent in real terms. Today, the tipped minimum wage equals just 29 percent of the full minimum wage, the lowest share since the tipped minimum wage was established in 1966.

• When surveyed, more than 1 in 10 workers in predominantly tipped occupations report hourly wages below the full national minimum wage, including tips. This fact highlights the challenges of ensuring compliance with minimum wage laws for tipped workers, as the employer contribution has been eroded by 20 years of inflation.

• Many states have recognized the need for a greater employer contribution to the wages of tipped workers. Currently 32 states (including the District of Columbia) require employers to pay tipped workers an hourly wage that exceeds the national tipped minimum of $2.13—and seven of these states require employers to pay both tipped and non-tipped workers the same state minimum wage before tips.

Raising the full minimum wage and the tipped minimum wage will help reduce poverty among women and their families, as well as make progress toward closing the gender pay gap.

• About one-quarter (26 percent) of all workers who would benefit from increasing the minimum wage to $10.10 have dependent children, and 31 percent of female workers who would benefit have children.

• Nearly 2.8 million working single parents would benefit from the president’s proposed increase in the full minimum wage, more than 80 percent of whom are women.

• Research shows that raising the minimum wage reduces child poverty among female-headed households.

• Increasing the minimum wage can also help women work their way out of poverty and into the middle class.

• For every dollar that men earn, women earn just 77 cents.

Estimates from the President’s Council of Economic Advisers suggest that increasing the minimum wage to $10.10 an hour and indexing it to inflation could close about 5 percent of the gender wage gap.