Former DEP Secretary Katie McGinty was one of the first gubernatorial candidates to call for a raise in Pennsylvania’s minimum wage. Now she has come out in support of eliminating the subminimum wage for tipped workers.
“This issue has a particular impact on women, who represent 67% of restaurant workers. It’s time that tipped workers receive the same minimum wage as every other worker in Pennsylvania,” said McGinty. “While employers are supposed to ensure that consumer tips bring every employee to the overall minimum wage, too often that does not happen.”
In Pennsylvania, the federal minimum wage for tipped workers has halted at $2.83 for the last 21 years. General minimum wage for hourly workers is $7.25 per hour, increased from $6.55 in 2009.
President Obama’s federal legislation on raising the minimum wage would increase it to $10.10 per hour, and tipped workers would receive an increase 70% that amount. McGinty believes it should be 100%.
“Bottom-line, no one who works hard forty hours a week should have to live in poverty,” she said.
Some restaurants in Pennsylvania do pay their tipped workers the same minimum wage as their hourly workers. Several other states, including Alaska, California and Minnesota, have completely done away with a subminimum wage for tipped workers.
In the case that the increase in minimum wage does go through for Pennsylvania, a study released at UC Berkeley’s Center for Labor and Research reports that raising the minimum wage for tipped workers would have little impact on prices for consumers.
Also running in the Democratic primary for governor, McGinty faces fellow former PA DEP Secretary John Hanger, Rep. Allyson Schwartz, State Treasurer Rob McCord, former Revenue Secretary Tom Wolf, pastor Max Myers and Lebanon County Commissioner Jo Ellen Litz.
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5 Responses
Milton Friedman’s ghost seems to have skipped over the part of the article that notes the study that found that increases in wages wouldn’t have much of an effect on prices.
As to the rest, if a restaurant is busy and it needs more servers to meet demand, then it will hire more servers. If it’s slow, then it’s not going to hire more servers. Companies don’t hire based on tax breaks and incentives – they will only take on the expense of another employee when their existing staff is stretched to the limit and simply cannot keep up with demand. The best way to stimulate demand is by making sure the people who are most likely to spend money have money. The Marginal Propensity to Consume and the Money Multiplier Effect work in concert beautifully here.
It’s also going to have a particular impact on women when more of them are UNEMPLOYED because the restaurants can’t afford to hire as many servers.
All that is going to happen is that currently tipped workers will no longer be tipped. They do this in Europe.
This is a misguided approach to reducing poverty. It is true that women earn the tipped minimum wage at a greater rate than their male counterparts. However, employers are forced to make up the difference between the tipped minimum wage and the regular minimum wage when the employee’s tips do not cover the difference. Under McGinty’s proposal, restaurants (and other industries where employees depend predominantly upon tips) will now have to pay employees a full minimum wage, which has grave implication for their bottom lines. Less employees will be hired. Incumbent employees will be terminated. Ancillary benefits will be cut. Costs will be passed on to consumers.
Finally, we have a candidate who gets it when it comes to the overall minimum wage problem. There are hundreds of thousands of restaurant workers who will benefit from this policy. Kudos to McGinty for leading the charge on eliminating the poverty wage. I hope the other candidates take note.