Do Higher Tipped Minimum Wages Reduce Race, Ethnic, or Gender Earnings Gaps for Restaurant Workers?
Abstract
In recent years, labor activists have invested considerable financial resources in campaigns to eliminate what’s known as the tip credit.
- Tipped minimum wage hikes have not increased total weekly earnings for women or minority tipped employees.
- In fact, tipped wage hikes are shown to increase the hourly wage gaps for minority tipped employees without increasing weekly earnings for these employees.
- Should policymakers increase the overall minimum wage, keeping tip credits intact is statistically more efficient at raising wages and reducing earnings gaps for tipped employees.