Economy

The Wage Policy Hillary Clinton Calls ‘Shameful,’ Explained

CREDIT: AP Photo/Frank Franklin II

Democratic presidential candidate Hillary Clinton at a rally in New York City

While the country’s minimum wage requires most workers to be paid at least $7.25 an hour, that’s not true for those who earn tips. Their minimum wage is $2.13, a figure that hasn’t increased in more than two decades. Employers are supposed to make sure that their wages, combined with tips, equal at least the full minimum wage, but many don’t.

Calling this inequity “shameful,” Democratic presidential candidate Hillary Clinton pushed to end the tipped minimum wage altogether at a rally in New York City. “It is time we end the so-called tipped minimum wage,” she said. “We are the only industrialized country in the world that requires tipped workers to take their income in tips instead of wages.”

Clinton has supported raising the federal minimum wage to $12 an hour, below rival Bernie Sanders’ call for $15 an hour. She supports state and local efforts to go further, however, and supported New York Gov. Andrew Cuomo’s (D) current push to raise the state’s minimum wage to $15.

Sanders had already advocated for an end to the gap between the minimum wages for regular and tipped employees. In the bill he co-sponsored that would raise the federal minimum wage to $15 an hour, the tipped minimum wage would also be scrapped.

The lower minimum wage for tipped workers leaves them in an economically vulnerable position. They are twice as likely to experience poverty; restaurant servers, some of the most common tipped employees, experience a poverty rate nearly three times higher than the average. The differences have gender and racial impacts, as women make up two-thirds of the country’s tipped workers, while people of color make up about 40 percent despite being about 30 percent of the workforce.

But at least eight states have done away with the distinction between tipped and regular employees in their minimum wage laws. And in those places, tipped workers’ poverty rates have been reduced by a third. They also have smaller wage gaps between men and women, particularly for women of color.

Both Democrats stand in stark contrast with the Republican field, which opposes any increase in the minimum wage. At Thursday night’s debate, many of them agreed that wages have stagnated, but still John Kasich swore off supporting a minimum wage increase, while Donald Trump has said that current wages are too high. Marco Rubio and Ted Cruz have also vowed not to increase it.