Wednesday, February 12, 2014

MassBudget: Job Growth Unrelated to States' Tipped Minimum Wage



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The Tipped Minimum Wage & Job Growth

A strong minimum wage helps workers support their families, and it can bolster our economy by increasing the amount of money workers have to spend at local businesses. 

In the case of workers who regularly earn tips, like waiters and hairdressers, employers are only required to pay what's called the "tipped minimum wage," which in Massachusetts is well below the regular minimum wage (it is currently $2.63). The law then requires that for any such worker, the combination of hourly pay and tips must be at least as high as the full minimum wage.
   
Our new factsheet, Job Growth Unrelated to States' Tipped Minimum Wage explores the impact of tipped minimum wage levels on employment in the restaurant and food service job sectors. The new factsheet finds that:  

  • Historically, Massachusetts - with its low tipped minimum wage - has not reliably outperformed high tipped minimum states or the US average for job growth in the restaurant industry

  • Despite Massachusetts low tipped minimum, the restaurant industry itself does not projection strong job growth in Massachusetts over the coming decade, nor meaningfully higher job growth in low tipped minimum states vs. high tipped minimum states generally

  • Tipped workers in states with higher tipped minimum wages have higher earnings and lower poverty rates

 
The Massachusetts Budget and Policy Center (MassBudget) produces policy research, analysis, and data-driven recommendations focused on improving the lives of low- and middle-income children and adults, strengthening our state's economy, and enhancing the quality of life in Massachusetts.

MASSACHUSETTS BUDGET AND POLICY CENTER
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BOSTON, MA 02108
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Massachusetts Budget and Policy Center | 15 Court Square | Suite 700 | Boston | MA | 02108

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