The federal minimum wage for tipped workers is $2.13 per hour. While some states set higher minimums, many allow employers to pay lower wages to tipped employees.
Tips are supposed to make up the difference — but relying on the kindness of customers to earn a living wage is fraught with uncertainty.
It’s no surprise that a recent study published in the American Journal of Epidemiology shows that tipped workers are more likely to suffer from mental health issues than other workers.
Based on data from a health survey that tracked U.S. participants from adolescence to adulthood, the study showed that tipped workers were more likely to suffer from stress, depression and sleep problems.
Why Are Tipped Workers at Greater Risk?
In short, the lack of security adds stress that workers who are compensated more regularly don’t have to face. Service-industry workers are more likely to have unpredictable schedules and pay and less likely to have health insurance, paid sick time and other benefits.
“The higher prevalence of mental health problems may be linked to the precarious nature of service work, including lower and unpredictable wages, insufficient benefits, and a lack of control over work hours and assigned shifts,” says lead author Sarah Andrea, M.P.H., a Ph.D. candidate in epidemiology at the OHSU-PSU School of Public Health, at Science Daily. “On average, tipped workers are nearly twice as likely to live in poverty relative to untipped workers.”
At The Economic Policy Institute, Elise Gould and David Cooper link higher poverty rates directly to separate tip wages. In a recent blog post, they write:
The clearest indicator of the damage caused by this separate wage floor for tipped workers is the differences in poverty rates for tipped workers depending on their state’s tipped minimum wage policy. …in the states where tipped workers are paid the federal tipped minimum wage of $2.13 per hour (just slightly less than the district’s $2.77 at that time), 18.5 percent of waiters, waitresses, and bartenders are in poverty. Yet in the states where they are paid the regular minimum wage before tips (equal treatment states), the poverty rate for waitstaff and bartenders is only 11.1 percent.
The EPI also notes that poverty rates for workers who receive at least the full minimum wage (not the tip wage) are “very similar regardless of states’ tipped minimum wage level. This strongly indicates that the lower tipped minimum wage is driving these differences in outcomes for tipped workers.”
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