Sen. Brown and the Tipped-Worker Minimum Wage Hike

Ohio Senator Sherrod Brown recently released his latest newsletter, which can be read here.  The newsletter once again reveals the over-reach mindset of a big government Progressive (of which Sen. Brown can be arguably considered). This time the subject was raising the tipped employee minimum wage

Sen. Brown states the federal minimum wage for tipped employees should be raised because "...some tipped workers never see their earned gratuity."  Therefore, within the "Fair Minimum Wage Act" there is a provision to "gradually raise the federal minimum wage for tipped workers from the current $2.13 an hour to 70 percent of the regular minimum wage."  The regular minimum wage to which he refers is the "new" minimum of $10.10 in the same Act.

There are two points to be made regarding those statements.

First, if "...some tipped workers never see their earned gratuity," are they actually "tipped" employees?  If so, the employer pilfering those tips should be held accountable for stealing the money the employees duly earned.  Otherwise, the employees, who are not receiving those gratuities, should be paid at the higher non-tipped minimum wage.

The second point to ponder:  If the tipped minimum wage is going to be raised to 70% of the federal minimum wage, why not just take it a step further?  Eliminate the tipping altogether and pay all employees, at least, the new federal minimum wage?

Barring the second point: 

It is well understood tipped employees are paid at a lower rate.  Therefore, by and large, most consumers are quite generous when tipping.  And even though as Sen. Brown states: "There's a big difference between the tips at a Manhattan steakhouse and the local diner in Chillicothe (Ohio)," tips do equalize-- and usually increase -- the pay tipped employees receive compared to other non-tipped service-industry workers.  One must then wonder how many currently tipped employees would support the change suggested in the second point.

Sen. Brown, intentionally or not, ignores the consequence of the proposed tipped worker minimum wage change.   If employers are to pay the higher wage, they must logically increase the price of their services.  Will that affect a change of attitude in the formerly generous tipping public?  Assuming the change in tipping attitude will occur, those tipped employees will see, if anything, a very modest gain in their actual take-home pay.

Once again, just as in the Affordable Care Act, Dodd-Frank, and now the "Fair Minimum Wage Act," the cure will be worse than the disease.   Rather than address the relatively few uninsured, bad financial institutions or unscrupulous employers, the Federal Leviton seeks to impose sweeping and drastic changes on entire industries.  And as always, those industries and "victims" the Acts are intended to aid are decimated, destroyed or otherwise harmed beyond repair.

Sen. Brown even unwittingly reinforces the above assumption with this paragraph:

"They (tipped employees) are men and women who once had good-paying factory jobs with benefits, and now work in low-wage positions with no benefits. And in the aftermath of the recession, the largest job growth has been in the service industry".

It is precisely the legislation Sen. Brown and others have imposed, and seek to impose upon us, which has killed those good paying jobs and prolonged the recession.

An irony whose cause the Washington establishment will never admit.

You can email Rick at ras1957aug@yahoo.com

Ohio Senator Sherrod Brown recently released his latest newsletter, which can be read here.  The newsletter once again reveals the over-reach mindset of a big government Progressive (of which Sen. Brown can be arguably considered). This time the subject was raising the tipped employee minimum wage

Sen. Brown states the federal minimum wage for tipped employees should be raised because "...some tipped workers never see their earned gratuity."  Therefore, within the "Fair Minimum Wage Act" there is a provision to "gradually raise the federal minimum wage for tipped workers from the current $2.13 an hour to 70 percent of the regular minimum wage."  The regular minimum wage to which he refers is the "new" minimum of $10.10 in the same Act.

There are two points to be made regarding those statements.

First, if "...some tipped workers never see their earned gratuity," are they actually "tipped" employees?  If so, the employer pilfering those tips should be held accountable for stealing the money the employees duly earned.  Otherwise, the employees, who are not receiving those gratuities, should be paid at the higher non-tipped minimum wage.

The second point to ponder:  If the tipped minimum wage is going to be raised to 70% of the federal minimum wage, why not just take it a step further?  Eliminate the tipping altogether and pay all employees, at least, the new federal minimum wage?

Barring the second point: 

It is well understood tipped employees are paid at a lower rate.  Therefore, by and large, most consumers are quite generous when tipping.  And even though as Sen. Brown states: "There's a big difference between the tips at a Manhattan steakhouse and the local diner in Chillicothe (Ohio)," tips do equalize-- and usually increase -- the pay tipped employees receive compared to other non-tipped service-industry workers.  One must then wonder how many currently tipped employees would support the change suggested in the second point.

Sen. Brown, intentionally or not, ignores the consequence of the proposed tipped worker minimum wage change.   If employers are to pay the higher wage, they must logically increase the price of their services.  Will that affect a change of attitude in the formerly generous tipping public?  Assuming the change in tipping attitude will occur, those tipped employees will see, if anything, a very modest gain in their actual take-home pay.

Once again, just as in the Affordable Care Act, Dodd-Frank, and now the "Fair Minimum Wage Act," the cure will be worse than the disease.   Rather than address the relatively few uninsured, bad financial institutions or unscrupulous employers, the Federal Leviton seeks to impose sweeping and drastic changes on entire industries.  And as always, those industries and "victims" the Acts are intended to aid are decimated, destroyed or otherwise harmed beyond repair.

Sen. Brown even unwittingly reinforces the above assumption with this paragraph:

"They (tipped employees) are men and women who once had good-paying factory jobs with benefits, and now work in low-wage positions with no benefits. And in the aftermath of the recession, the largest job growth has been in the service industry".

It is precisely the legislation Sen. Brown and others have imposed, and seek to impose upon us, which has killed those good paying jobs and prolonged the recession.

An irony whose cause the Washington establishment will never admit.

You can email Rick at ras1957aug@yahoo.com

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