NYT Misses the Mark on the Tipped Wage

Last weekend, the New York Times editorial board endorsed a 232 percent increase in the base wage for tipped employees. It’s an unnecessary policy change that will harm the same tipped employees it’s meant to help.

Here are the facts. According to recent Census Bureau data, the average hourly wage for a restaurant employee earning tip income is above $13 an hour. Top earners can collect $24 an hour or more. This same data set shows that tipped employees have seen a nearly 60 percent increase in their hourly earnings over the last 20 years.

The Times attempts to support its argument by praising some states, like Washington, that don’t allow a tip credit as proof. This also ignores the evidence: Seattle Weekly reports that restaurants in the state skimp on service as a consequence, dropping bussers and assigning larger table sections.

And nationally, table-service restaurants are experimenting with computer terminals that allow customers to order and pay at the table. A job that pays a server $12 an hour when tips are included won’t be nearly as lucrative when all the server is doing is carrying food to the table.

These real-life consequences of wage hikes are consistent with research forthcoming in the Southern Economic Journal, which finds that increasing the tipped wage reduces full-service restaurant employment. Next time, hopefully the Times editorial board will think twice before it advocates for such a misguided policy.