Federal Minimum & Subminimum Wages: Dynamics & Importance of - PowerPoint PPT Presentation

Federal Minimum & Subminimum Wages: Dynamics & Importance of the Two Tiered System Sylvia A. Allegretto, PhD Co-director: Center on Wage & Employment Dynamics Institute for Research & Labor Employment University of California, Berkeley

$8.00 Federal minimum wage: $7.25 $7.00 The tip credit as a percent of the minimum wage $6.00 $5.00 Tip credit $5.12 or $4.00 71% $3.00 40% $2.00 Federal subminimum wage: 50% $2.13 since 1991 $1.00 $0.00 Allegretto 2014

$10.00 $9.00 $8.00 $7.00 $6.00 $5.00 Customer portion of the wage bill is 71% $4.00 $3.00 $2.00 Employer part of $1.00 the wage bill is 29% $0.00 Allegretto 2014

Teens, 12.5% Age 55+, 13.7% Age 40 to 54, 20.8% Age 20 to 29, 36.5% Age 30 to 39, 16.6% Source: David Cooper, Economic Policy Institute Allegretto 2014

 Establishes a more meaningful wage floor  Reconnects the TW to the MW  Prevents erosion of the wage floors  Reduces the ranks of the working poor  Mitigates inequality  Lessens the gender pay gap  It is FAIR  And, it will not cause job loss Allegretto 2014

Allegretto 2014

Tip Credit Tipped Wage $10 $9.32 $9 $8.00 $8 $7.25 $7.25 $7.25 $0.25 $7 $6 $3.62 $5.37 $5 $5.12 $9.32 $4 $7.00 $3 $2 $3.63 $2.63 $2.13 $1 $0 Federal Massachusetts Maryland Hawaii Washington State Allegretto 2014

180% 170% Full-service restaurants 160% Private sector 150% 140% 130% 120% 110% 100% 90% 80% Source: BLS QCEW data. Allegretto 2014

140% Private employment 120% Limited service restaurants 100% 80% 60% 40% 20% 0% Source: QCEW 1990q1 to 2011q4. Allegretto 2014

80% 72.4% 68.0% 70% 60% 51.4% Male 48.6% 50% Female 40% 32.0% 27.6% 30% 20% 10% 0% All workers Tipped workers Waiters Source: Allegretto & Filion, EPI 2011. BLS CPS data.

25% Full Tip Credit Partial Tip Credit 19.4% 20% No Tip Credit 16.2% 16.1% 14.6% 15% 13.5% 12.1% 10% 6.7% 6.7% 6.0% 5% 0% All workers Tipped workers Waiters Source: Allegretto & Filion, EPI 2011. BLS March CPS data.

80% 71% Private sector 70% 65% 62% Acc & Food Svcs 60% 50% 37% 40% 32% 29% 30% 20% 10% 0% Health care Paid sick days Retirement Source: BLS NCS data. Allegretto 2014