Eliminate Subminimum Wage for Tipped Workers
A newly released report from the Political Economy Research Institute (PERI) at UMass Amherst reveals the substantial benefits of eliminating the subminimum wage for tipped workers, providing clear evidence in favor of the Question 5 ballot measure. The report, Potential Impacts of a Full Minimum Wage for Tipped Workers in Massachusetts, highlights the positive economic impact of the measure and directly challenges the misinformation spread by the Massachusetts Restaurant Association (MRA) and other opponents.
Among the report’s top findings:
• Increased Earnings: Tipped workers in states that have eliminated the subminimum wage earn 10-20% more than those in states with a lower tier wage system, proving that this change will result in higher and more reliable income for workers in Massachusetts.
• Minimal Business Impact: Contrary to claims by opponents, the report finds that restaurants would face only modest cost increases — equivalent to a 2% price hike — allowing businesses to absorb the impact without job losses or drastic price increases.
• Addressing Wage Theft and Inequality: The subminimum wage disproportionately impacts women and workers of color. Eliminating this system would reduce wage theft, improve job quality, and promote economic justice.
This new research provides a data-driven counter to the misleading narratives promoted by the MRA, which has claimed that Question 5 would hurt the restaurant industry. The findings show that implementing a full minimum wage with tips on top for tipped workers would not only improve their financial well-being but also benefit businesses by reducing turnover and stabilizing the workforce.
“It’s important to understand that tipped workers are typically from vulnerable social groups — they’re disproportionately women, people of color and earn low wages. These workers are concentrated in the restaurant and hotel industry, which we find to have relatively high levels of worker complaints related to wage theft issues,” says Jasmine Kerrissey, associate professor of sociology and Labor Center director. “Although the restaurant and hotel industry accounts for less than 6% of employment, it accounts for nearly 14% of all worker complaints.”
On the exaggerated claims that ending the subminimum wage will increase costs for consumers, Jeannette Wicks-Lim, research professor at PERI added, “We find that eliminating the subminimum wage will only modestly raise business costs. This is because Massachusetts tipped workers already typically earn around $12* an hour as their base pay (without tips) and because they won’t get to the full $15 minimum wage for five years (i.e., by 2029). The average Massachusetts restaurant should be able to adjust to their increased costs by raising prices about 2%. A $50 meal would go up to $51, for example. Past research has found that minimum wage hikes linked to cost increases of this size do not produce measurable job losses but have raised workers’ earnings.”
As the Yes on 5 campaign continues to gain endorsements from community leaders, civil rights organizations, and worker advocacy groups, One Fair Wage is urging Massachusetts voters to support Yes on Question 5 this November.
Submitted by One Fair Wage, (https://www.onefairwage.org), a national organization seeking to end all subminimum wages in the U.S.
*The minimum wage for tipped workers in Mass. is $6.75.
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