As the fight to end unfair tipped wages heats up in the United States, multiple counties in Maryland are stepping up to lead the charge. Councilmembers at the Montgomery County Council have recently introduced legislation that would phase out subminimum ‘tipped’ wages, and reduce service wage inequality for workers across the county.
“The subminimum wage for tipped workers is still just $2.13 an hour at the federal level,” the One Fair Wage national coalition notes in its fact sheet. Although the federal minimum wage is $7.25 an hour, the practice of paying tipped wages allows employers to pay service workers such as restaurant waiters at lower rates. Tips are supposed to balance out the discrepancy, but for many tipped workers the reality is an income below the minimum wage—and a struggle for survival.
In “Tipping is a Legacy of Slavery,” Michelle Alexander wrote about the history of tipped wages in America, saying:
After the Civil War, white business owners, still eager to find ways to steal Black labor, created the idea that tips would replace wages. Tipping had originated in Europe as “noblesse oblige,” a practice among aristocrats to show favor to servants. But when the idea came to the United States, restaurant corporations mutated the idea of tips from being bonuses provided by aristocrats to their inferiors to becoming the only source of income for Black workers they did not want to pay.
In the intervening decades, subminimum wage for workers in the service and restaurant industries have disproportionately prevented women and workers of color from receiving fair, equitable wages.
“Workers have been suffering with the subminimum wage for a very long time, all the way back to Emancipation when the restaurant industry first demanded the right to hire newly freed slaves, not pay them anything, and force them to live on tips,” said Saru Jayaraman, president of One Fair Wage, an advocacy organization dedicated to supporting fair wage initiatives across the United States. “Since 1865, it’s been overwhelmingly women, disproportionately women of color, mostly single moms struggling with the highest rates of poverty and sexual harassment of any industry because they had to put up with so much to get those tips.”
“[Subminimum wage] is a direct descendent of slavery, of Jim Crow, of discrimination against people of color and women,” Montgomery County Councilmember Will Jawando told The Real News. “[Ending subminimum wage] would go right at the heart of an intentionally racist policy and say ‘We’re not going to do that anymore. We’re going to make sure that people get paid a dignified and fair wage.’”
The precarious nature of tipped wage work in the United States was made even worse by the economic upheaval during the COVID-19 pandemic. Tipped wage workers across the country were deemed “essential,” working in high-traffic workplaces with few protections. To complicate matters, workers experienced higher instances of abuse, lower tips, and stagnant wages, causing many to leave the industry entirely in search of more stable, better-paying employment. “Your rent and your bills don’t go down every month, but your tips fluctuate wildly day to day, week to week, month to month, shift to shift, season to season,” Jayaraman said. “It’s impossible to plan, save, pay your bills, and that’s why so many people have left [the service industry].”
During the pandemic, some restaurant owners began voluntarily raising their wages to a full minimum wage plus tips to recruit long-term staff, but Jayaraman believes the business-by-business wage adjustment strategy isn’t enough to retain workers. “A lot of restaurant owners have now joined forces with [One Fair Wage] to say, ‘We need this because a lot of us are raising wages, but it’s not enough.’ Workers don’t want to come back unless they’re guaranteed by law a full minimum wage with tips on top.”
“What’s really changed is that workers during the pandemic reached their limit,” Jayaraman continued. “So many left [the industry] and so many more are saying ‘I won’t work anymore unless you pay me a full minimum wage.’”
With the passage of Initiative 82 in Washington, DC, on Nov. 2022, service industry wages in the surrounding area have become far more competitive. Workers now have the choice to find more lucrative restaurant work in DC, rather than settle for lower wages in the surrounding counties. Legislation proposed by Jawando in Montgomery County and introduced Sept. 19 is designed to raise the subminimum wage in the county in $2 increments until it is fully phased out by 2028.
When asked what removing the subminimum wage would do for the people of Maryland, Jawando replied that it would be transformative. “It’s never been more important to have jobs that pay a living wage, a fair wage,” he said.
The proposed legislation in Montgomery County is part of a larger push to end subminimum wage in the state of Maryland. Prince George’s County is expected to introduce similar legislation next month, and state lawmakers first introduced a bill to phase out subminimum wage with Senate Bill 803 earlier this year, but the bill came under heavy criticism by opponents and failed to make it out of committee. There are plans to reintroduce the bill during the 2024 legislative session.
In response to heated criticism of the fair wage initiatives, Jawando says that he believes most of those concerns are specious arguments. “I think to say that, ‘we can’t pay our workers a fair wage, and that’s why I can’t be in business,’—that’s just not true, and it’s not fair, and it’s not right,” he said. “We have to confront the lie that you can’t do it. You can do it, you can be profitable, and pay your employees a fair wage.”
Public comment for both bills introduced by Jawando is scheduled for Oct. 10 at 1:30PM EST.