 Economic Policy Institute. My name is Christian Dorsey. I'll be your host for today on my day job. I direct EPIs, External and Government Affairs, and it's my pleasure to welcome you here for this event on tip workers and the tip minimum wage, something that is incredibly important, not just to working Americans, but to our economy as a whole, and we'll explore why. Before I get into introducing today's event, there are certainly some acknowledgements that I would like to make. First of all, I'd like to thank our partner in presenting this event, the Restaurant Opportunity Center, Rock. We thank them for joining us in partnership, as well as Unite here, who has been instrumental in helping bring some talent to this event, who you'll hear from a little bit later on. I'd also like to thank the Ford Foundation, which has been an incredible partner to EPI in our work in support of working Americans, and specifically with this paper that you'll see featured here as part of today's forum. As far as logistics for this event, if anyone at any point needs to use the restroom, I would ask that you use the rear door, which is behind you, and to, I guess, your right. You can walk down that hallway and you can find both the men's and ladies' rooms and ask that you not use the front door during the time that we are in session. We are live streaming this event, so there are a number of people who couldn't make it here in person, but who are watching on the web for them and for all of you, if you'd like to live tweet during this event, please use the hashtag tippedworkers. We'd appreciate that. And with those logistics out of the way, let's get into the substance of today's event. As I've done an informal survey of people to talk about this issue, many folks are unaware that there's even a separate minimum wage for people who work in the hospitality industry. For most folks, there's just an understanding that there's the federal minimum wage and that's it. So one, we want to explore what is this phenomenon of the tipped minimum wage, why it exists in our economy, what's the historical background for it, and whether or not it actually meets the needs as it was developed and intended. So we wanna make sense of this and figure out how the many rules that govern the tipped minimum wage, how well those are followed, whether or not the tracking and reporting requirements are met to an adequate degree. We also wanna explore the macroeconomic implications of the tipped minimum wage in our economy, what it does to living standards for the nearly four and a half million Americans who work for tips, what it's like for businesses who actually work under this model and what the impact of the tipped minimum wage is on federal and state budgets. We then wanna look at the micro level and see what it's like for people who actually earn the tipped minimum wage, how it is that they're able to make ends meet, how they're able to provide for their families, what it's like for individual business owners who have to go about understanding the myriad regulations and what it does to their business outcomes. And then finally, we just wanna explore whether or not there is a better way forward, whether or not the way we're doing things now actually makes sense moving forward. So we've got a big agenda, but we certainly have a wonderful group of people who are gonna make it possible for us to explore these issues in depth. We're gonna lead off with Laura A. Fortman, who is the principal deputy administrator of the Wage and Hour Division at the United States Department of Labor. Laura and I were just speaking before the event started. She is, we know, new to the position, relatively new, been there a little bit over a year. She comes to us from Maine, so we have to extend our sympathies for these hot, humid Washington summers. Most people in Washington go to places like Maine during the summer and she somehow didn't get the memo. But we are pleased that she's here because she brings an extensive background on behalf of vulnerable Americans in the workplace to her position at Wage and Hour. She joined the department in June of 2013. Prior to this, she was executive director for the Francis Perkins Center in Newcastle, Maine, an organization that's dedicated to achieving social justice for the treatment of workers. And previously, prior to that appointment, she spent eight years as the commissioner of labor for the state of Maine, where she was engaged in a number of labor issues, including minimum wage increases, overtime protections, child labor protections, and breaks for nursing mothers. This is really just the culmination of what has been a life career devoted to working on behalf of vulnerable workers. She's been involved with many organizations such as NELP and chairing the governor of Maine's workforce cabinet. She's just been committed to these issues at every step of the way and in every dimension that we could value. And it's so important for us to have at the Department of Labor and in the Wage and Hour Division people who get it because as I'm sure Laura will share with us, it's not just set it in forget it and ensuring that people actually receive the full protections that the law affords them. So to open our event, it is my pleasure to welcome Laura Fortin. The introduction probably took longer than my comments. So thank you, Kristen. It's a pleasure to be here. And I unfortunately am only able to stay for a few minutes at the beginning, but the reason I'm here is because this issue is incredibly important to us at the Department of Labor and in particular at the Wage and Hour Division. As the video showed, many people do not even understand how the tip credit works. So I'm delighted that there is now a video that can help explain it to folks. The 213 has been frozen in place since 1991. And I know and we'll be hearing, all of you will be hearing from some workers who can talk about the impact that that has on their lives. For those of you who don't know about Wage and Hour, we are in a division at the Department of Labor. We're responsible for enforcing labor laws such as minimum wage, overtime, child labor. Our responsibility is for 135 million workers at 7.3 million establishments. We have 1,100 roughly investigators, which means we can't be every place all the time. So what we do is we use our resources strategically to identify areas where we see high rates of violation. We do not wanna be out spending resources in places where people are in compliance with the law. We wanna go where there's a high likelihood that there are vulnerable workers and laws are not being complied with. And so that's one of the reasons why we pay careful attention to what's happening in restaurant industries across the country. For example, in 2013, we conducted 3,875 investigations at full service restaurants and found minimum wage, overtime, or record keeping violations which resulted in a little over $26 million in back wages. Now for some people, $26 million sounds like a lot of money and for other people they're saying, wait a minute, that's not very much. If that's all you're finding, why are you spending your time on that industry? When you look at the low wages that you're collecting, that is a lot of money. Also we found that in full service restaurants where we're doing investigations that there is an 80% violation rate. So that means if you're finding violations that high we have a responsibility to be there. Now our ultimate goal is always compliance. We wanna make sure people understand the law and that they're in compliance with the law. So we also spend a considerable amount of time doing outreaching education. Our goal is not to play gotcha. Our goal is to make sure that a fair day's pay, fair day's work results in a fair day's pay. That's what it's about. People are working hard and they need to be paid and so that's how we see our job and making sure that everyone understands the rules. As has already been pointed out in the video, tipped employees are the only group of workers who rely on the customer to pay their wages. And as I'm sure you'll talk about during the day some states have changed their laws to provide greater coverage for these workers. Some states, although most states still adhere to the 213 for the tipped wage. The president was also very concerned about this issue and back in February he issued an executive order on minimum wage for government contracts and in that there is a provision for tipped workers and it will raise their wages to 70% of the minimum wage that will be included in the executive order. So it'll be 70% of 10-10. Now that will be phased in over time. January 1, 2015 it will bring the tipped wage up to $4.90 so it's for those federal contracts. So that's not everyone. Unfortunately the president can't just unilaterally make this change except in areas that he can control through executive order and so those are the steps that he's taking. That minimum wage executive order wage an hour is responsible for promulgating regulations to enforce that and we are in the rulemaking process right now and July 28th, which I believe is Monday is the final day of comments. So if there is anyone who wanted to comment on that there is an opportunity for you to do that. So I know that you want to really get to the meat of the conversation here today but I did want to just make sure that you knew that we do understand the issue at wage an hour. We are committed to enforcing the law and we'll be very interested in hearing what comes out of today's discussion as well as the research that I'm looking forward to reading that has been done on this topic. I just wanted to, I'm sure you'll hear lots of statistics today but it wouldn't be the Department of Labor if I didn't toss out a few statistics such as when you're looking at the demographics of people who are earning these wages that you are primarily talking about adults, one in three in parents, one in six of those rely on free lunches to help feed their children and that only seven states require employers to pay their tipped workers the same as the minimum wage for all workers. So that's a little bit about the demographics and I wanted to just close with a quote from the president when he signed this minimum wage executive order and people are saying, you know, why are you doing this? What he said was that there's a simple moral principle at stake. If you take responsibility and you work as hard as these folks work, if you work full time you shouldn't be living in poverty. Not in America, we believe this. So thank you for everything that you're doing to help understand this issue and make sure that a fair day's work results in a fair day's pay. In terms of, and thank you for phrasing it that way. I mean, we have a responsibility to enforce existing law and that's kind of, you know, our responsibility but in terms of studies, the Fair Labor Standards Act was 75 years old last year and as part of our celebration, we commissioned a number of research projects to help us really look at what is happening with vulnerable workers. We do have a website with that research posted on it and many of the people in this room contributed, you know, to those research papers. Okay, I can't get at it without Heidi. Heidi. That's a great question. As Heidi said, the federal law does not require that but what happens is whichever law is most protective is the one that applies. So if you're in a state that has, well, you know, a minimum wage that's higher, that's the wage that's required to be paid. However, the federal Department of Labor does not enforce that. The state would be enforcing it. One of the things that we have done during this administration is form, we have signed MOUs with at this point 15 states to do a better job of coordinating our activities around enforcement so that we can have those conversations at the state level and determine who has either the better resources, the better law to make sure that vulnerable workers are receiving the most protection that they can. Okay. Is that enough? Yeah, well, yeah. Yeah, let's, there are only two questions. Let's see if I can answer them. Okay. Differences between tip credit stakes and a tip that the tip workers, the full minimum wage or if you don't have the evidence at hand, maybe at least what you would expect is an act of work. Yeah, we do not have a breakdown of that at this point. So I really, I can't answer that. And I'd be willing to bet that there are people in this room though who are looking at that research. That's a good opportunity. Thank you, Larry. Thank you for coming. You mentioned that the restaurants is over 80% of non-compliance. How does that compare with other industries and restaurants that are at the top of the list of non-compliance? And again, I want to frame it and coming from researchers, I know that you'll appreciate this. That was 80% of full service restaurants where we had an investigation. So that's a very small subset that is not, there's an 80% violation rate at all restaurants across the country. So I wanted to be clear about that part. The other thing is getting back to Heidi's question about what's your relationship with the states. One of the things that we've done in this administration is really start using a strategic enforcement approach. So we're always looking at places where there's a likelihood of violation. So we start screening from the beginning and of putting our resources in those areas where there are either low wage workers or where the workers do not have a private right of action. And so we're in industries that have a high violation rate. Does that make sense? So it's unfair to kind of make a sweeping statement about the violation rates in those industries generally. I don't know that I would use the word target. I would say that through our analysis. Yes, yes, through a combination of the data that we have. We spend a lot of time in agriculture in retail, in construction, in janitorial services. We look for areas where there's a disconnect in the employment relationship. So as my boss, David Weill talks about the fissured workplace. So looking in areas where there's a high likelihood that workers are not being paid. Appropriately. I have to get to a different appointment. We thank you very much. Thank you very much. My sense is the Q and A portion could have gone on for quite a while, but we appreciate that you've got the people's business to get to. Next, it's my pleasure to introduce the two authors of the paper that you see on this title screen. 23 years and still waiting for change. An examination of tipped workers in the macro economy along with a pretty bold recommendation that's included in the subtitle, not to give anything away. But let me introduce the two authors of this report who will present it to you this morning. Sylvia Allegretto is a labor economist and co-chair of the Center on Wage and Employment Dynamics at the Renown Institute for Researcher on Labor and Employment at the University of California at Berkeley. Dr. Allegretto has received her PhD in economics from the University of Colorado at Boulder and early on in her career was a renowned economist here at the Economic Policy Institute and was a co-author for several editions of our seminal state of working America most recently in 2011. She joins with us on a lot of our work on the minimum wage, having authored paper recently in the anniversary, the 50th anniversary in the March on Washington and looking at the minimum wage in the context of that as a civil rights demand and has done at least a couple of iterations co-authored work on TIP workers in conjunction with EPI. We are pleased that even though she no longer calls this her day job place of employment, she maintains a status as a research associate here at the Institute and we are thrilled that she joined us from the Bay Area here today. And her co-author is David Cooper who has been with EPI since 2011 and Dave conducts a national and state level research on a variety of issues and is really our go-to expert on the minimum wage and other wage issues. Dave's research and work holds a unique place here at EPI not just looking at national level issues but with a particular emphasis and expertise on how it relates to the states. So he is really our minimum wage, our state expert and we are so pleased that he brings his talents to this work and we are pleased that both of them are going to present and walk you through this paper which we hope is making a meaningful contribution to the low wage worker debate. So I'll bring it up, Dave and Sylvia to do their thing. Good morning. It's always wonderful to be back at EPI. I did used to reside here and used to raise a little hell and was in charge of happy hours and stuff like that every once in a while I would do something good like the state of working America. Anyway, it's always great to be back here but this is truly amazing to think about this 213 because just imagine if you owned a business like a restaurant and I told you that for a large share of your workers you're gonna be paying them the same that you're paying them today in 2000, you know, 2037, at least until 2037. You'd think that's kind of crazy, right? You'd think, well, what a boom that would be for me if I was a restaurant owner, right? But this is what we're talking about. It's 23 years since we have had an increase in the federal minimum wage. So let me back up just to give a little bit more history about this. So in the original Fair Labor Standards Act there were a lot of workers that weren't covered. Hotel workers, other service workers, a lot of tipped workers, restaurant workers. So in the 1966 amendment they widened the umbrella to cover these workers but then they said we're gonna pay you less, we're gonna allow for a sub minimum wage. So this is kind of the history, right? So this is kind of what we're talking about that started in 1966. Now this figure is adjusted for prices but this is what we're dealing with. So in 1966, this is when this started then we had this two-tiered system and the way this works is that you have what we call a tip credit. Well, who does the tip credit? The tip credit's the employer, right? So yes, feel free to shout out the answers. So what we have is that you have this situation where you had the tip wage is the red line and the black line is the regular minimum wage and you had 50-50, that's what the original ruling said. That the employer would pay half of the minimum wage to tipped workers, half of the regular minimum wage and the customer portion would pay, the customer tips would subsidize the wage bill for the employer for the other half to get the worker to the regular minimum wage. That's what we're seeing here, 50-50 in 1966. It never went below the actual wage actually got up to being around 60% at one point so the tip credit at one point was even smaller, about 40%. But then we have this situation, right? That happened in 1991, the sub-minimum wage is 213 and in 1996 we had a minimum wage bill signed under President Clinton and under much pressure from the restaurant association lobby where you had the sub-minimum wage then frozen into perpetuity, right? So it was 1996 wage bill but it had been 213 since 1991, right? So what you have is exactly what we see here in the picture, that you have the tip wage now is the lowest ever on record because of this continual erosion over 23 years and it's only 29%. So instead of 50% like the original bill now the tip wage is only 29% of the minimum wage and the tip credit is 71%. So customers now are paying the lion's share of the wage bill for the employer, right? That's the employer subsidy. So again, we have this long-term decline and we don't have anything right now to change this. I mean hopefully the Harkin-Miller bill will or something but it's a very long, long-term trend. So like the minimum wage, as you know about like the minimum wage, we have states that have enacted policies that are above the federal level. So the federal minimum wage, 725, the federal tipped minimum wage, 213, the federal tipped credit is 512, right? So what this shows is the different scenarios that we have and it's kind of hard to see but in like here in New Mexico for instance where you see these black dots that show up those are the states that have higher federal regular minimum wages, so higher than 725, right? And then you have the red states here and there are about 19 of those covering just under a third of all tipped workers who follow the $2.13 an hour. Those are the red states, right? And then you have that has been mentioned the seven green states, those are states like where I'm from in California that don't allow for a subminimum wage for tip workers. So tip workers also get the regular minimum wage. By the way, most of these states as you can see have higher minimum wages. So not only do they not have a subminimum wage, they have a higher regular minimum wage such as in California where I am now a $9 minimum wage or Washington state is 932, a big difference from $2.13, right? So the green states cover about 18% of the workforce and then we have these blue states in between which I call these partial tip credit states that are about 25 of them where they have their subminimum wages higher than the $2.13 but below the binding state minimum wage. For instance, here in DC, right? How much do wait staff make in DC? $2.77, you get the prize. So $2.77 has been for a long time here in DC. I've often wondered why it's such a $2.77 but that's what it is. And you have a minimum wage here of 9.50 so you have a pretty big tip credit of over 6.70, right? 6.73, but it's all across the board. You have Illinois that pays a subminimum of 4.93 with a minimum wage of 8.25 for a $3.30 tip credit. So we have all types of different scenarios across the country. So as an economist, we have a natural experiment going on. Matter of fact, my old research assistant here, Rachel West is here now. She resides upstairs at CAP and she's helped me with a lot of my academic research on this topic but we have a natural experiment going on, right? So it's clear at the very least, it's clear that the restaurant industry does not hinge on paying $2.13 an hour to tip workers. Otherwise, you wouldn't think there'd be any restaurants, full service restaurants in states like California but I promise you that there are. There are a lot of restaurants in California and in Washington state, right? So that's one of the most important things but just I want you to keep in mind because we're in DC where I know all you folks are out going for a couple martinis after work and having your dinner and usually spending other people's money so you're tipping really well but you're in the little bubble here, right? So I want you to keep in mind that's not most tip workers, right? Even most restaurant workers. You'll have to really think about the mostly women who are working at a diner in rural Pennsylvania where I'm from or at Denny's in Youngstown, Ohio or somebody working at a 24 hour truck stop in Nebraska, right? These are the people that we're really talking about here. So one of the reasons that David Cooper and I look at this and I think this is so important is the restaurant industry is booming. Since the full service restaurant industry since 1990 is up over 80% and to put that in the context private sector is up about 25%. So these workers, there's more of these workers, it's becoming a larger and more important sector in the overall labor force so we should take a closer look at it. So just to motivate what my wonderful co-author, David Cooper is gonna come up here and talk more about the substance of the paper. We have over 4 million tip workers nationwide. Most of them are in the food service industry. The majority of them by far are women so this is definitely a women's issue. These are not all teenagers by any stretch, an average age of 33, most are over 25 years of age and of course we have a lot of parents. So this is another reason why I just think we need to really take a really strong and really hard look at this industry, this growing industry that's becoming so important to see how workers are faring, something that the economic policy is brilliant at so I was glad to contribute. But let me hand this off now to my wonderful co-author to really get into kind of some of the meat of our research. Thanks Sylvia, I'm David Cooper, star of such films as what's wrong with America's tipping system? So as Sylvia mentioned, this is a growing portion of the workforce and that's really why we need to look at this issue and understand what life is like for these workers. And the important thing to keep in mind when we talk about tipped work is that really no matter how you look at it, tipped work is low wage work. There's sometimes the industry and some folks like to paint this picture that tipped workers are doing just fine, that they're earning these great tips that give them a really great wage and that may be true for some high performers in fine dining restaurants or high-end casinos or things like that, but as Sylvia mentioned, that's really not the workers that we're talking about here. There's always gonna be high performers in any industry. The vast majority of these workers are not doing that well. So this table that I'm showing here shows the median wage of all workers nationwide than tipped workers and specifically waiters, waitresses and bartenders because as Sylvia mentioned, they make up the bulk of tipped employment. It shows the breakdown by gender and also by the state level of the state tip minimum wage in those states. And there's really three takeaways from this chart. The first thing that you see is that, as I said, tipped wages are not high wages. The median wage for tipped workers nationwide at 10, 22 per hour is equal to roughly 60% of the median wage for workers overall. Even in the best case scenario for male waiters and bartenders in states where they're getting the regular minimum wage, the median wage is only $12 an hour. So that's still in the bottom third of the wage distribution nationally. Even for the best category on this table, it's not really that much money. And in the worst case, for female waitresses and bartenders in states where they get the 213 tip minimum wage, the median wage is only $9 and 14 cents per hour. If that waitress or bartender works 40 hours a week, year round, their annual income is less than $19,000 a year. So this is not a lot of income. The second takeaway, the important thing to notice is that if you look, there's a very clear progression in the wages for tipped workers between the low tip minimum states and the high tip minimum states. And I should note that these numbers here are both base wages and tips. So it includes the tips that they're getting. And what you see is that as you increase the base wage for these workers, their total hourly pay goes up significantly. Waiters, waitresses and bartenders in states where they get the regular minimum wage make 20% more than at the median than workers in the 213 states. And I think that this really directly contradicts some of the claims made by folks that, oh, if we eliminated the tip minimum wage, that somehow these workers would be worse off because people would tip less and their total take home pay would go down. Clearly, we see that that's not true. In the states where they're already getting full minimum wage, these workers are doing significantly better. The third thing that I'll just note from this table is that we do see a gender gap for these workers that even though women make up the majority of tipped workers, they do tend to make less than men. And this is true in any of the categories represented. Although I will note that the gap between the male and the female median wage is smaller in the states where they're getting the regular minimum wage. Another thing to think about, and I'm sure that some of the other speakers we have today, we'll talk about this, is that tipped workers, by and large, do not get benefits. And unfortunately, we weren't able to get data on tipped workers specifically, but what this graph shows is the receipt of benefits, things like health insurance, life insurance, paid vacation, paid sick time for the overall private sector, that's the dark blue line, and then for workers in the accommodation and food service sector, which of course is where the bulk of tipped employment resides. And what you see is that workers in accommodation and food service, for virtually all of these benefit categories, they're receiving those benefits at either half or less than half the rate of workers overall in the private sector. And again, because this isn't just tipped workers we're talking about, we're looking at all workers in accommodation and food service, this also includes management in that sector. So if we were to just look at tipped workers without management, these rates would be even lower, presumably. And that's really, I mean, when I think about that, particularly in the case of paid sick leave, I mean, that really, that frightens me. I mean, I think that that should be very worrisome for folks that when you go out to a restaurant, the person who's serving you food doesn't get paid time off from their employer to stay home and get healthy when they're sick. And because so much of their wages dependent upon the tips that they make, the incentive is for them to work when they're sick, when they're gonna interact with the most customers and to potentially take time off and get healthy on shifts when they wouldn't interact with as many people. I mean, that's completely perverse incentives in terms of public health. And so, as I've been saying, because these workers get such low wages and no benefits, we see that their poverty rates are significantly different than workers who are getting paid the regular minimum wage. Nationwide, the poverty rate for tipped workers is 12.8% compared to a nationwide poverty rate for non-tipped workers is 6.5%, so almost double. And if we look just at waiters, waitresses, and bartenders, their poverty rate is more than double the poverty rate for non-tipped workers at 14.9%. But the important thing to note here is that as Sylvia mentioned, there's seven states where these workers are paid the regular minimum wage, where they're not getting the 213. And the difference in poverty rates between workers in those states and the states where they're getting 213 is dramatic. If you look at the overall poverty rate for tipped workers in states where they're getting 213 an hour as their base wage, it's 14.5% compared to a poverty rate for those workers, for overall for tipped workers in states where they're getting the full minimum wage, it's 18, excuse me, 10.8%, so 4 percentage points lower, almost. If you look just at waiters, waitresses, and bartenders, the poverty rate in the states where they get the regular minimum wage is 8 percentage points lower than in the states where they're getting 213 per hour. So that's a dramatic reduction in poverty for these workers. And it's important to note that the poverty rate for non-tipped workers between those three categories of states, their three state minimum wage policies, the non-tipped worker poverty rate is virtually the same across all of them. So what that tells us is that very clearly it's the base wage, it's the higher base wage that these workers are getting that's leading to a significant reduction in poverty, specifically among tipped workers. Now because of their higher poverty rates and lack of benefits, these workers tend to have to rely on public assistance a lot more than non-tipped workers. What this table shows is that for tipped workers, about 46% of tipped workers have to rely on some form of public assistance compared with maybe about 35% of workers overall. So as Christian alluded to in his opening remarks, this means that more taxpayer dollars are going to subsidize wages at these restaurants and tipped employers because these workers are not getting enough through their time in the labor market. And so I think a lot of this, as the workers that we're gonna hear from and we're gonna talk about, part of the problem is that because they're getting such a low base wage, because so much of their income is dependent upon tips, there's really no way for them to budget or plan. Their income levels can vary dramatically from week to week. And imagine trying to figure out if you can afford a new car payment or rent at a new apartment or say tuition if you wanna go back to school when you don't know what your income's going to be from week to week. It's impossible to budget. And as the video that we showed at the beginning mentioned, I used to work for tips and I remember days when I would drive into the restaurant and I'd see that I'd been given the patio section at the restaurant and a thunderstorm would roll in and they'd shut down the patio and I'd have to sit there for two hours not working because the law required that if they called you into work you had to be there for at least two hours. So I'd just sit around for two hours and then go home having not made any money because they'd closed my section and that's just the way it goes in that industry. And I'm sure we're gonna hear more about that. So for all these reasons, we think that this system needs to change. And as Laura Fortman mentioned, there's a bill in Congress right now, the Harkin Miller bill that would raise the tip minimum wage up to 70% of the regular minimum wage. We certainly think that's a step in the right direction but given the experience of tipped workers in the States where they're already getting the full minimum wage, we think it's time to just do away with the tip minimum wage altogether. Have these workers be paid the regular minimum wage? We know that it's leading to better outcomes for these workers and that the restaurant industry is still thriving in those States. So we should just give them the full minimum wage and let tips go back to just being an expression of gratitude for good service as opposed to being the bulk of these workers paychecks. Thank you, Dave and Sylvia. The data that you presented is really a collection of many individual stories and we would be remiss if we didn't actually delve into those individual stories as part of today's conversation. So we're very thankful that joining us today are a few people to tell their stories and first we're gonna have Marcy Gardner who is a worker at a local DC restaurant, a one that's probably considered upscale, right? Marcy, you know, a place where, you know, $16 burgers, right? That's upscale, right? So, you know, we're not talking, we're not talking a place where you're talking about low bills and therefore subsequently low tips, putting people in peril. We're talking about a place where there's a fair amount of money flowing per check, yet Marcy is still here to tell her story. So we welcome Marcy to the stage. Marcy also does some advocacy work with the Restaurant Opportunity Center and we look forward to hearing what you have to say. Thank you all so much. I'm so happy to be here today. My name is Marcy Gardner. I'm 29 years old and I'm a waiter at a wine bar here in DC. I moved to DC last year in January, 2013 to take a congressional internship as part of my master's degree program. And when I graduated in May, I found that I could not find work and it became essential for me to return to the restaurant industry in order to pay my bills. As a recent college grad, it's really hard. I went to college so that I could escape this exact kind of life. But when I graduated, we'd fallen on hard times. We could not even afford a gallon of milk, let alone pay rent. When I decided it was time to stop looking for real jobs and apply to service industry jobs. In two days, two days, I'd gotten my job. But the really sad part is that despite my willingness to do whatever it takes to pay my bills, I still have a hard time making ends meet. Good times are okay. In good times, I can put away enough money into my bank account to pay my bills and to put food on the table. But in hard times, going to my kitchen to make dinner can look like a mystery box challenge from MasterChef. Like, it's just, what can I do to make this work? And the worst part is, of the shifting seasons, there is no warning when the winds are gonna change. As has kind of been alluded to here today, my income depends entirely on how many people come into the restaurant. Not on how many hours I spend there. The exempt minimum wage is a serious part of this problem. Actually, before college, I used to work at a restaurant outside of Portland, Oregon, that's my hometown. And that's where Tipped Workers receive 100% of the state minimum wage. Currently at $9.10 an hour, management is forced to consider the cost of labor when they do their scheduling. So they adjust in time. Some people come in at four o'clock, some people come in at five o'clock, some people come in at six o'clock. And then when the dinner rush is over, they start sending people home. And yes, this does result in shorter hours, but you know what? It also results in more money in workers' pockets for the time that they spend at work. It results in a higher hourly wage that is significantly different and it results in a significantly different quality of life for people who work in restaurants. This is not the case in D.C. At $2.77 an hour, service staff is practically free labor. And the thing is management knows that. There's no incentive for them to cut labor when business is slow, resulting in excessively long hours and little payoff for employees. Just this last Saturday night, in the first four hours of my Saturday night shift, from four o'clock until eight o'clock at night, I had served four people. Four people and not a single person was cut off the floor. All three of us were kept until midnight at close, including the guy who had been there since 10 o'clock that morning serving brunch. What's worse, it's commonplace for management to cut at more expensive employees, such as host staff who are not tipped and expect the service staff to pick up the slack. It's simple. The exempt minimum wage disincentivizes business efficiency. It encourages consistent overstaffing and rewards abusive practices towards workers. It's gotta stop. The restaurant industry is one of the largest and fastest growing job sectors in this country. But Americans don't just need any old jobs. We need good jobs. Raising the tip to minimum wage to 100% of the minimum wage will reward hard work with good wages and the respect of a job well done. And Rock United is looking to do that right now for workers here in DC. We're working on putting together a ballot initiative to get the option to raise the minimum wage, the tip to minimum wage to 100% of the minimum wage on the ballot so that voters have a choice. We need signatures and we need help collecting them. If anyone here is looking for a next step to help abolish the tip to minimum wage, this is it. And together, we can achieve one fair wage. Thank you, Marcy. And I should note that we'll have an opportunity to engage in further discussion with all of the speakers who remain as soon as they've all delivered some remarks. So get your questions and comments ready because we will have time for that discussion. I'd now like to welcome Amber Grinden, who works for a restaurant, Phillips, right, Amber? So a seafood restaurant at BWI Airport. Amber is the sole breadwinner in her family. So she has to work in an environment where there are lots of customers. It's fairly consistent. Yet she's also here to tell her story. So we welcome Amber Grinden. Oh, you know my name already. And I've worked at BWI Third Good Marshall Airport for the past five years as a server at Philip Seafood. I'm paid the Maryland minimum wage for tipped workers, which is $3.63 an hour. The restaurant industry is growing at the airport and throughout the country because of all our work. But even though the industry is growing, our minimum wage has been stuck at $363. It's difficult to get by when you have to depend on tips. Our tips are very seasonal. That means that for half the year, I feel like I can take care of my family. And the other half of the year, I feel like I have to just scrape by. There is no security. I don't know how much money I'm gonna, we'll make each week from week to week. For the past two years, my husband has been too sick to work and I have been the only one working to support us and our 10-year-old son. Having to rely on tips limits anything I could do to plan for the future. Right now, I need to buy a new car, but I can't because I don't know if I'll be able to afford the payments all year round. Recently, the Mobile Home Park I lived in was sold. And we were all told that we had to move within eight months. They sold the land to build $300,000 homes. Before I owned my own mobile home and only had to pay 550 for a lot rent each month. But now the most affordable place I was able to find to rent cost $1,200 a month, it's twice as much as I had to be. But that I was playing before it. In the winter months, they cut our schedules back and I'm only working three days a week. And with less business on those days. And fewer tips. I'm worried about how I'll keep up the rent and bills when tips are down. I am considered by my company to be a full-time worker. So I qualify for benefits, but not all my coworkers do. I see the company hiring more part-time workers and denying more hours of people who want to be full-time and get benefits like health insurance. My whole paycheck right now goes into taxes and I owe more taxes in a year because my hourly pay is not enough to even cover my tax bill. If I was making the full minimum wage plus tips, it could at least ensure that my taxes could be covered out of my paycheck. And I wouldn't have a huge bill hanging over my head at the end of the year. That would be more stability of my life so I could provide better for my family. Now my coworkers and I are organizing together for a fair process to form a union in our job. We want to see positive changes in the law. Thank you, Amber. Joining us now for a slightly different perspective, someone in the same industry, but who holds a different role, is Imar Hutchins, who is the owner of Washington's Venerable Florida Avenue Grill, a DC institution that I no doubt suspect several of you have frequented over the years. It was, yeah. Imar has owned the grill for about nine years and he comes to ownership of this Venerable institution with a very diverse background as a real estate attorney and developer. He's developed condos adjacent to the grill but has made a real commitment to making sure the grill's history not only remains in DC but that it's also modernized for new generations who frequent the Shaw U Street area and can hopefully live on in the future. But we bring Imar here today, not just because of the Florida grill, but because he has what you might view as a different perspective on the tip minimum wage. We often hear that this is something that is necessary for business owners to exist. In fact, that if we didn't have this tip minimum wage, these jobs would go away. These businesses would fail. Imar doesn't subscribe to that viewpoint. He's here to tell us why. Imar Hutchins, everyone. I want to thank Christian for having me. I want to acknowledge all the people from Rock here, Britain, Jeremiah, and others, I'm sure. So as Christian said, I'm the owner of the Florida Avenue Grill and you might say, why is a restaurant owner here? And why would he be advocating for increasing the tip minimum wage which is only going to cost him more money? Well, the way I look at it is, the example I always give people is, let's say I have a bar and you have a bar next door and if I want people to stop smoking and if I stop smoking in my bar, everybody goes to the bar next door, right? But if there's just a law that comes out, it affects everybody the same. It's neutral with respect to restaurants. It's neutral with respect to bars. So people still go to the place that they were going to go before and it's just something that everybody has to deal with. And we've seen this in places like D.C. and New York which have passed, say, anti-smoking laws and really it didn't affect anyone adversely with respect to any one particular other place. So, the situation that we're in is that we pay slightly above the tip minimum wage. About a year ago, the grill was approaching its 70th anniversary, right? This is our 70th year. We're proud to be the oldest soul food restaurant in the country, in the world. That's a little bit of a trick because soul food is only American phenomenon but we're gonna say in the world anyway. We're also the oldest African-American restaurant of any kind surviving. So, October 4th is our 70th anniversary. You mark the date. But, you know, I started thinking about, well, okay, I bought the grill as you alluded to to build the building next door. That was the real reason that I bought it. My personal background is I'm a vegetarian. So, I know. And so, I had actually five vegetarian restaurants previously, two in DC, which if you've been around long enough you might have heard of them, called Delights of the Garden. One in Georgetown and one near Howard. But, anyway, as we approached the 70th anniversary I started thinking to myself, well, okay, what is, I guess I should say first, I maintain the grill mainly for social reasons. Like, most developers would have probably torn it down to get like another two units, right? But it was important to me to keep the grill because it's such an icon of DC history. It's a continuing source of employment for people that might not have it. Otherwise, one of the, you know, they say that Lacy, which is the former owner, would, he would give a three-legged cat a job. So, like, truly we've hired a lot of people over the years that might not have been hired elsewhere and, honestly, most people mess it up, but some people surprise you. So, you're giving people a chance. So, the manager of the grill for many years was someone who was formerly incarcerated, you know, and I don't know how many places that would happen. So, anyway, I kept it for these years for mainly a social purpose, but as we were moving forward I said, well, if I'm going to kind of commit myself to it, then what does it have to be, what does it have to look like going forward? And I, you know, I thought about it and I realized that it must mean for me that I need to make it healthier, you know, that it must be a reason that I, of all people, would own the place, you know? So, I kind of reluctantly came to the conclusion that it must, part of the reason must be for me to help my people, in particular, learn how to eat better. But, as I started thinking about the restaurant, like DeNovo, you know, from scratch, I said, well, okay, it's not enough to just think about what we serve. Let's think about the whole enterprise, you know, and let's think about the worker-restaurant relationship, you know, and is that working? And is that, is it really a healthy restaurant if it's not healthy for the people who work there? Is that possible? And so, we just started kind of doing like an open source evolution, maybe open source is not the word, but just inviting the public into our evolution, you know, one thing that I love about rock and the work that you guys do is that it's also, it's not just negative, it's also offering suggestion or a path forward, right? And I actually went to law school with Saru, who's the co-founder of rock, and I didn't even realize that until I happened to look at the book and look at the picture and I was like, oh, Saru, you know, because as I was gonna evolve the restaurant, I was like, I need to get that book behind the kitchen door. I know it's about this issue, and it wasn't until I actually looked at the book that I realized that fact. So we kind of reconnected, we were working a lot of things, and what I've been trying to do is to kind of like champion a new business model, I would say, and so what you're referring to, Christian, is that I personally believe that we should just abolish tips, period, like the practice of tipping. Like, I know that's an unpopular thing and I know that's not gonna probably happen anytime soon, but like if we wanna, like if we wanna, okay, here's what happens. You go to a restaurant, let's say the food is $10, but you know you need to have 12 leaving aside the tax for a minute. You know you need to have, say, $12, or you wouldn't go to a restaurant with food for 10. So the real cost is 12, and everybody knows that. It's just like an agreement that's been made that, well, you are gonna pay two directly here and to the server, and then you're gonna pay 10 to the restaurant, and then they're gonna give part of that 10 to them too, but when you put that together, that's what the server gives. Well, why not just charge what it is and that's what it is, you know? There are a lot of places that, not a lot of places. Now our places where tipping is allowed, where even exchanging cash is not allowed, you know? There's clubs that do that, that the Yale Club, for example, there's no money allowed to exchange. You're not allowed to tip, you know? It's just they charge what it should be and that's what it is. So there are places that do that. I would be in favor of that. It's a lot of problems with that because servers are very attached to tips too, you know? Like we, when Laura Forman was here talking like about the violations in the industry, well, we can't get people to report their tips to us, period, like people don't wanna report their tips. So servers and restaurants are attached to this whole tipping thing and what happens is people, because they have these good times, you know, sometimes they wanna not complain about the bad times, because they don't wanna get put on worse shifts and all kinds of things like that. So kind of like everybody just grins and bears it, you know? But it's actually, I believe it's actually holding back both sides of the equation, you know? Both the restaurant and the servers. So I mean, like we're talking about it now, trying to see if we could abolish tips at the grill. I mean, there's gonna be a lot of resistance from that and of course we would have to charge more for the food. So this is why I'm in favor of legislative addressing of the issue of the tips minimum wage because if it's something that just happens and everyone has to deal with it, it's a level playing field, every restaurant in DC does the math or nationally if that could happen. Everybody does the math and figures out, okay, we need to go up X percent on the food. Everybody does it, you take the pill and then everybody moves on, you know? People wouldn't know when they go out to eat, they're gonna have to pay $12 for the thing that was 10 or $11 or whatever. But when they actually think about it, they're spending the same amount of money as before. It takes the, it's called a gratuity, which means it's gratuitous, which means it doesn't actually have to happen. So like how many things do you know that you can go, the services render then after the fact you decide if and how much you wanna pay for it? I mean, is that, can you go to a lawyer and say like after the work is done, say, I kinda didn't like the way you looked at me when you were doing it. So I'm gonna give you 70% of what the bill says here. Nothing else is like that. So it's just something that's really like built up and like encrusted over many generations in this industry, but it's not really, I don't really think it's the best. So I know we're gonna have Q and A, so I'll leave it there. All right, thank you. All right, so I'm now gonna invite all of our speakers to come up to the front. We've got some assigned seating. We'll get you mic'd up. Before we get into audience questions, I wanted to address a question first to Dave and Sylvia, just in looking at the final proposal that you all sort of have, abolishing the tip minimum wage altogether, can you just delve more into the experiences of the states where that have already done this and how they kind of look in the restaurant industry, because again, a guiding fear for a lot of people, even if they're not necessarily pro-restaurant industry folks, is that somehow could this succeed in making people worse off? So if you could just talk a little bit more about what's happening in those states that have already done this. Sure. Okay, there we go. So sure, as I mentioned in my presentation, we know clearly from the data that workers are better off in the states where they're getting the regular minimum wage as their base wage. So there really should be no dispute about that. The folks are doing better there. In terms of the restaurants themselves, as Sylvia alluded to, the restaurant industry nationwide has grown dramatically over the last 20 years faster than the private sector as a whole, but as Rock likes to point out sometimes, and we noted this in our report as well, even the restaurant industry themselves would admit that in the states where they're paying workers the regular minimum wage, restaurant employment is actually forecast to grow faster in those states than in the rest of the country where they're paying lower base wages. So the notion that having to pay this higher base wage to these workers is going to just kill the industry is just bogus, and the industry themselves knows this. They admit this in their forecast reports. So I mean, I think clearly this is something that would benefit the workers and also wouldn't really have any damaging effect on the employers either. This one is from R.C. and Amber. A lot of folks believe that ultimately the success or failure of tipped workers when it comes to their take home pay is entirely controlled by tipped workers. If they do a good job, then they'll get good tips. What's your experience in terms of how tips do or do not correlate with the level of service? Give us some dynamics of what you experience with how people actually go about tipping. I actually heard a statistic or someone that I worked with said that they'd seen a study that showed that actually most people disobeyed. That showed that most people, not sure, okay. I'll just speak up. That most people, when they go to a restaurant, they actually decide before they walk in the door what percentage they're gonna tip. So there's definitely instances where I see that what I receive and tip is not correlated with my performance. And the sucky part on top of that is that sometimes the service that they get isn't all my fault. It's not my fault. If the bartender didn't see the ticket and I had to hound them because they were talking to somebody else because their tips depend on talking to that person so that they will stop and make the drink that I need to give to you. It's also not my fault when something happens in the kitchen and they burn your eggs and they have to start over. Yes, I'll do my best to communicate that with you, but I'm not a magician. I would say that for me, I do feel good in that the majority of the time I do feel that most people are fair. They want to reward people for giving them good service and that's awesome, but it's just really unfortunate to live in a city where my wage does depend directly on what you choose to give me and anybody that decides that they have a good reason to not give me a fair wage does directly impact my life. Oh, go ahead, go ahead. I feel the same way as what you said. People are gonna tip what they tip no matter what I do. I go above and beyond it and they don't necessarily tip above and beyond. I think another, that's already been touched on a little bit, that even if people were all good tippers somebody still has to cover the hours where there's not gonna be very many customers. And so there's no opportunity there than to make more money off of tips because you're just relying, at least for a large part of the day restaurants aren't very busy. There's a lot of restaurants that are 24 hours a day. So there's just not an opportunity to make more no matter how wonderful of a service that you might provide if you don't have any customers. I would also add that a lot of people, customers don't even know that waitresses and waiters don't make a lot of money. My father lives in Kentucky and he goes to like a, is that me? Okay, he goes to like a golden corral type of place and he'll leave him a tip but it's just like, a dollar or whatever change you have. I'm like, yeah, well you know that person, that's all they're getting. He's like, really? You know like some people honestly don't know because it's not something that's talked about and people assume that you're working there, you have the uniform on that they're paying more. So that's one thing. Another thing just from a restaurant owner perspective, like you're also giving the power to the people. You're not paying them, right? So I would rather that the place paid them instead of the customer because you're gonna be accountable to who pays you. So if we could work that out, that would be preferred. Just one other thing I'll add on that. There we go. Is that, this isn't something that we looked at but Professor Michael Lynn at Cornell studies this issue extensively and his studies show that tipping is often discriminatory, that black servers tend to get lower tips than white servers even for the same reported quality of service. But also the interesting thing is that there's a perception in the industry that black customers don't tip as well as white customers and so servers of all races will tend to give worse service to their black customers because they're expecting a lower tip from those folks. So that's again, that's not good for a business owner who wants all of their customers to be getting good service. And let's explore that before we get to audience questions. This whole idea, does this make good business sense to have sort of these systems, this regime in place. Marcy, you brought out that such a low tip worker minimum wage is easy for employers. They don't have to think about what are good business practices. And Ema, maybe we can start with you. Do you think that leveling the playing field as you sort of identify as a first step would actually create an environment where businesses are succeeding or failing based on their level of innovation and performance as opposed to just carrying cheap labor and getting by that way? Well, I think, I'm not sure the answer to that question but I do think that it would make it easier for someone that wants to pay more, right? Because right now a person who wants to pay more has to go out there on a limb because they are gonna have to increase their prices relative to everybody else to do it. So I'm not, I mean, the honest answer to your question is I don't know if in the end it would be better or not. I just can address the fact that one restaurant is gonna have to charge more to pay people more and it's gonna have to, the way people are very, you know, price conscious. And you know, also I would, on that point, like I think the ultimate change in the tipping culture is gonna come from the customer side because restaurants, restaurants, you know, they're kind of like a very follow the leader type of industry. So like if somebody paints their door red and they are like a popular restaurant, next week everybody will paint their door red, you know? It's just, that's the way they operate. So if people want, if people come in and they're wanting, you know, is this, you know, free range, organic turkey and people will say, yeah, that's what we're doing, right? So when customers come in and they start saying, well, you know, what is your policy with respect to tip to workers, you know? Or how many people of color do you have in the front of the house, you know? Or things like that, when people start asking these questions and becoming more aware of the industry, then the industry will change because no one wants to be on the wrong side of history. Okay, let's move to some questions from our audience. Yes, and please just do us a favor, stand up so that your question is captured by the camera microphones. Yes? The servers to share their tips with other workers, right? So they don't even get to keep everything that they have. Right. And I've also managed to say it's a percentage of the tips. I'm one of the people who talk a lot about it. Well, all right, so who wants to start with that? Well, in the restaurant where I work at, we do have to share our tips. We tip out our bartenders to ensure that we get our drinks so we can serve our tables. And so we don't get to keep 100% of what we take in. Yeah. I don't know how that's where you work. It's the same where I work. I would say I probably tip out about close to 25% of my tips between tipping out the bartender, food runner, bussers. There's a lot. And so there's a giant portion of my day that goes out the window. You give money to me and then I give it to the restaurant to give back to other employees. So I'm also subsidizing my fellow workers' wages. Yeah, I think this idea of what we refer to as these kind of secondary tips is not ever talked about hardly, because it has all kinds of implications. You really have to ask yourself, how much in tips do these workers have to make to be able to make ends meet, to be able to tip out, and to be able to buy almost all their own health care, sick leave, vacation leave. That's how you have to think about it. If you're getting a base wage of $2.77 or $2.13, you need a lot of money in tips. And what this research is showing, that they're not, you know, most workers, especially in these lower tip credit states, are certainly not not making it. Well, I would say that I personally, we have a similar kind of thing. They tip out maybe a percentage of their thing to the service assistants and runners and people like that. But I'm personally in favor of the tips being shared through the whole building and paying people more equally throughout the whole building. Then you create a teamwork type of mentality instead of us against them. So a lot of times, I don't know if that's me, but a lot of times restaurants break down into front of the house, against the back of the house, the servers against the bar, then day shift against the night shift and all these kind of things. Whereas we're actually theorizing right now, trying to figure out our next move, but we're thinking about, is it possible to just pull everything for the week and distribute it according to some formula? Is it, you know, we're trying to break that down. And I'm probably, a lot of people would be interested if they could see a way to do it, yeah. You trailblaze, you can provide a model, right? That's what I feel like raising the tip and a way to cross the whole world would do, would be to make everybody equal between the. Well, that's possible. So you're just, I mean, what we're describing here today is actually a system that is fairly complex in how it works. You know, for the end user, the customer, they think the calculation is difficult, figuring 15, 18, 20% is a pre-tax, post-tax, what? But really, you all are talking about a system that only gets into a lot of reporting, a lot of bean counting, a lot of figuring out who you share with, how it's shared. But then on the business owner side, a lot of shifts so that theoretically there is some equity and all kinds of things that go into this. Is there ever a point for any of you speaking principally to Marcy Amber and EMAR where it's worth it? Or, you know, do the good times, sort of as I think EMAR, you were saying, that gets people complacent and really ultimately complaining because the good times are so good? Oh, I wish that were the case. Well, I would say it also depends on the restaurant. You know, it's not, it's not fair to say like restaurants because they're restaurants where people make six figures, you know, serving, and they're restaurants where, you know, people, you know, don't make anything. So they run the gamut. I would say in a city like D.C., you know, the restaurants are a little more pricey than they are in some places, so theoretically the tips might be better, but there's like so many factors that go into the whole thing. I mean, does it, does it make sense? I don't know. I mean, like, we have to, I mean, for a restaurant owner, there's so many things to deal with already, right? And there's just, you almost have to have like, most restaurant owners, you know, they don't have like an accounting department and this and that. They don't have people that can handle everything that has to be done. Like, we certainly don't. So that's why simplifying would actually be better. And most restaurants, they make decisions on most small restaurants, not large ones. We make decisions based on what we think will work just without a lot of analysis. So like, if you, for example, when we added like paid vacation and sick days, we didn't really do regression analysis and see if it's gonna make sense or not. We just say, well, if somebody has been working for like a year, you know, then they should be able to have a vacation and we just did it. And it's the kind of thing that some of these changes, you're never gonna make it if you sit there and like really try to figure it out. But if you just maybe do it, then you'll do it and the world will keep spinning. One thing that I'll add to that, that you were getting at, Christian, is that, you know, because the system as it is right now is pretty complicated, for a worker to try and insure compliance with the law. I mean, this is unique to tipped occupations, that it's up to the worker to really ensure that they're getting at least the regular minimum wage. If you're a waitress at a restaurant, you have to basically keep track of your hours for a given week, keep track of all the tips that you got over that time period, keep track of whatever your boss, your employer was paying you as a base wage. And keep in mind this includes both cash tips, credit card tips, you know, factoring in the tips that you tipped out to those secondary tipped earners that we talked about, and then do the math to make sure that you were getting the regular minimum wage, at least the regular minimum wage. And if not, it falls on that server to go to her boss, the person that sets her schedule, that determines where she's gonna work in the restaurant, that determines, you know, whether she's gonna keep her job and say, look, you didn't pay me enough, you owe me more money. I mean, it's not realistic when I'm sure the workers can attest to this, that they're gonna go and do that because they don't wanna lose their job. So that's part of the reason why doing away with the tip minimum wage would make it a lot easier for these workers. They wouldn't have to have that concern. But I think also it's important for the business owners, you know, even for the good actors who wanna do the right thing, this system is difficult for them to comply with. It's difficult for them to understand exactly how to do this, you know, Sylvia maybe could say more, but I mean, the law says that the workers are supposed to get at least the regular minimum wage when you include their base wage plus tips for a given work week. But it doesn't define what a work week is very clearly. It says it's any 168 hour period. And so because these workers have such erratic shifts, when does their work week start? When does it end? You know, just all these things that makes it more complicated for good actors to try and do the right thing. If I could just say something on that, David, that all those things would have to happen on the server end every week for the restaurant to be in compliance. So it's no wonder that it's 80% violation rate in the industry because, I mean, with servers running spreadsheets, you know, keeping track of their tips every day and reporting it every week to the restaurant so that they can, you know, be in compliance. So, you know, it's a very complicated system and a simpler, you know, more equitable system will be better. And it probably does involve paying people more, you know? I would like to note real quick on the same topic that it's not just that servers are lazy and don't wanna do the record keeping. It's that quite frankly, it's not a very transparent system. I don't always know exactly what I took in, especially when I don't get to count my tips until after my tip out is taken. And I'm not sure, because they don't give me a copy of the report, they keep the report. And so, I don't know how much I made in credit card tips versus cash tips. Did I actually keep any of my cash tips or were those all taken by the restaurant for my tip out along with some of my credit card tips? It's very, very confusing. And at the end of a long work day, who wants to sit down and figure that out? So. Because you're not paid for that time that it would take to actually figure it out and monitor it. That too. Ross. We'll think about it. There were other hands, so we'll see. Mm-hmm. Oh, I'm sorry. They owe more taxes than they did in cash. All right. Right. But what I'm referring to is the cash. But, Sylvia, Sylvia and then. Even the good actors, though, this would be so difficult, because these are work hours that are very, you know, up and down. People, they're not working necessarily 40 hours a week, eight hours a day. Even a good actor, a good employer. At what point do they stop and say, okay, now I'm going to try to figure out everybody's hours that vary a lot in this industry and vary a lot over time for even the same worker. I'm going to figure out what I paid them. I'm going to figure out what they made in tips minus what they tipped out. I mean, yeah, this is so, even for somebody who wanted to do it, it seems really impossible, especially, I mean, as you just heard, individual workers would find it difficult. I think it's impossible for even the good actors. And then you are supposed to be the one to go to your boss and say, hey, you owe me money. And believe me, this does happen. When you think about these 24-hour restaurants, if you're working at a 2 a.m. shift, there's times when people are not making the minimum wage. What I was referring to in particular was the cash tips. So the server is the only one who would know how much they were tipped in cash. So most restaurants would not be able to know that unless the server told them. And Ross, and then we'll get to you. So my question follows on what I need to ask, which is what happens in terms of social security? Is the employer responsible for, you have to assume as an employer that the person did make the minimum wage. And then, so at a minimum, are you deducting enough for social security, paying in and giving the person credit for their hours based on the minimum wage? Well, that's why we have ADP. Yeah. Because they do it off for us. But yeah, I mean, it's based on what was reported to them. So it's taken out. So what Ross is alluding to this whole idea that ultimately when it comes to social security, taxes, if you will, payroll taxes, if you will, workers and employers are responsible for a certain amount. And if you've got all of these complications and record keeping, is there any way to know that people are actually paying appropriately because this has real issues for workers on the backend when they retire, making sure they're receiving the full benefits that they are entitled to. So it's social security. Yes. It's like you were talking about the abolishment of tipped minimum wage, or if you made this a national law that everyone was going to be half to pay the minimum wage. If the 15 to 18% that you're getting no longer is a cultural norm, would we see, I know this is a hard question because it's forecasting, but would we see a total decrease in the minimum wage for that cultural shift to not tip anymore? And Dave, maybe you can take first crack at it because I know you have thoughts on it. And this is a difficult crowd where we could actually do this, but it would be interesting to do a survey on the street to see how many people actually understand when they pay their 15, 18, 20% whether or not that is because the server themselves is making a sub minimum wage. And therefore they're making the mental calculus that this is going to making sure this person has adequate money. I don't know the answer, but I suspect the answer is no. So just to make sure I understand your question correctly, you're asking whether if we did away nationally with the tip minimum wage, the sub minimum wage, would tips go down or would people tip less or? Sure. Right. So I guess what I would say on this is that, first of all, I don't think, I think the vast majority of Americans don't understand how the system works right now. They just know that it's sort of expected of them to tip somewhere between 15 and 20%. However, and that they kind of have a sense that that's an important source of income for these workers, but they don't know how important it is. So I think that even if we did away with the tip minimum wage, I think most people wouldn't know that there was any difference in the pay structure for these workers. But also, as we said in our presentation, there's already seven states where this is already the case, where these workers already get the full minimum wage. About 18% of all tipped workers are operating in a system where they're getting the regular minimum wage plus tips. And I'm pretty sure that in California, people still tip somewhere between 15 and 20, 25%, would be my guess. And so there hasn't been any sort of cultural shift in these places where workers are already getting a decent base wage from their employers. The other thing I'll note on that is that sometimes you also hear this concern that oh, if we did away with the tip minimum wage, restaurants would have to institute a service charge and that customers wouldn't like that. They don't like to see a service charge. But again, I would point to the fact that we already, this is not a new idea to do away with the tip minimum wage. We already have seven states where this has been policy for 20 plus years. And every time I've visited California and been to a restaurant, I haven't seen any service charges. I mean, maybe in a handful of cases, maybe, but the point being that I don't think this would dramatically change norms around tipping or the way that we pay workers. Yes. Complexity here and what you're talking about is cultural change, awareness in terms of customers, but also city laws, state laws, federal laws. In terms of a strategy, if we can only do one of those things in the next year, what would be the most important thing? Why don't we hear first from our organizers, Marcy and Amber? So the most important thing in terms of long-term change. Yeah, like what could be the leverage point that could change things? I think that's a very complex question, but from my personal perspective, having had experience working for the full minimum wage and the tips minimum wage, to be really frank, I really don't see good reasons to not get rid of the tips minimum wage. The Oregon restaurant industry is doing just fine and my tips were pretty much on average the same as they were here. As far as most people tipped 20%, 18%, you had the handful that tipped less, but it would just make such a world of difference. And I think that to be honest, I personally think that actually changing that law would be easier than changing a giant cultural mindset around tipping. Absolutely. And Amber, you talked about organizing, unionizing. Yes, that's where I think what will change it the best way and the fastest way. That's why we are fighting to unionize the airport for fairness across the workplace. Job security and pay is what we all need. Not just servers, everybody. Yeah. We'll go to this gentleman over here in the back. With the minimum wage, the reliance on public support programs for tipped workers there and the bigger the rest of the nation. What did we have on that? I think we might have it. It's not something that we publish anywhere. I'm happy to share it with you afterwards if you'd like. I would say this. It's like the poverty rates. Well, the poverty rates are much lower in states that have no sub-minimum wage, that have to pay the regular minimum wage. They're still far too high. So in general, this is a low wage worker industry. So what we can do, it's not just as simple as getting rid of, I don't think so, is I think it's a good very first step to get rid of the tipped minimum wage. But we see with the benefits, it's not only low wage, but it's low benefit. So we have the problem of high poverty, albeit much higher in the low-tipped credit states, but it's still far too high even in the states that don't have a sub-minimum wage. So it's an industry that needs to be kind of looked at as a whole, not just wages, but also benefits. And we had another question here on the side. Yes. Taxicab drivers were also tipped workers. I learned nail salon attendants were also tipped workers, right? And I think the law says it can make $30 a month in tips and I can pay you that tip minimum wage. So I just wanted to ask Sylvia and David, what you guys, if you tap into some of those pieces. So we did look at the occupations that we think are predominantly tipped. And there are workers outside of the restaurant industry, as Brendan was saying, where workers that are tipped occupations, people like nail salon attendants, casino workers, barbers, hairstylists, taxi cab drivers, massage therapists. And our focus was on changing the tip wage policy. And so we tried to look at the folks that we thought are the most likely to be getting this sub-minimum wage. And a taxi cab driver or massage therapist, hopefully they're getting something higher than 213. But Britain's right, if they're making at least $30 a month in tips, then technically their employer could be paying them as little as 213. And I should note that $30 in tips, if that sounds odd as a number to pick for the amount of tips, it's because, and maybe you can correct me on this, that originally that was a value that was set something like 30 years ago. And they just never bothered to update it. What was originally 20, I believe, in 1966. And they updated it to 30, and I believe around 1970. So that number has never been changed either, which would be well over $100 if we're updated today. But I think this brings up another larger question. There are folks who are not necessarily paid the tip wage that actually receive tips. And so that's another big gray area. I know that there's been talk recently of, it was one of the airports here on the East Coast trying to get the folks who help handicap workers get to their gates in wheelchairs. They wanted to make them tip workers. But in an eight hour day, how many of those folks could you actually assist? Also pizza delivery. I mean, if you're gonna make those folks tip workers, even if you were busy the entire eight hour shift and you're driving around delivering, how many pizzas could you possibly deliver? So there's, again, all of these problems with the definition of who is a tip worker and what that would mean. But clearly, some of these occupations that they're trying to drag in and saying, hey, you're really a tipped worker. Now, and again, there's the difference between do you receive some tips, or are you truly a tip worker that could have a chance, baby, of living off of your tips? And those are two really different things. Okay. Do we have any other questions? Okay, Rachel? Yeah. Thanks very much, Marcy and Amber, for contributing today. It's, here's a question that I get a lot when I talk about the tip minimum wage. And I, for reference, never been a tip worker. I know what I would say to this, and I think Marcy, you alluded to it a little bit when you said, quickly, you were able to get a job at the restaurant industry. But I get a lot of pushback from people who say, well, if tipped workers don't like the tips that they're getting, why don't they get another job in a different industry? So for the record, can you just speak to that? Oh my, yes, I'd be happy to speak to the record on that one. It's not like I haven't been applying for jobs. That's every hour that I'm not at work, I am at home on my computer looking and applying for jobs. My laptop is full of applications. And I think that the secondary, dangerous aspect to that argument is we still have such a high unemployment rate. The economy is so loose right now that their management can easily make the argument. If you don't wanna be here, I can find somebody else today. I can walk out on the street right now and find somebody else who'd be happy to take your job. And it makes it very difficult to organize, especially in smaller restaurants. I want to organize, but the restaurant industry, smaller businesses make it a lot more difficult. I hope that answers your question. But I think even more important, somebody's gonna work at that job. Whether it's somebody, one of these women, or somebody is going to feel that job. So we can't just put it on us as on the worker if you want a better job, go get another job. I mean, just because you might not have the skills to get another job, or maybe you're not mobile, so you can't move to maybe where there's another job, this is one of the fastest growing industries in the country. So we have to look at the position, not the worker in the position, and the job and make that a better paying and a better quality job. I'd like to, as we close out, I'd like to explore the vulnerability component, which this last question raises. We have two young women who work in the industry. There's been research that's looked into the degree at which women are made even further vulnerable due to sexual harassment in the workplace due to customers who view servers as their employees and therefore needing to take a lot of abuse, harassment from them. Just like your thoughts on whether or not this industry actually does facilitate the worst among us on both the customer and the employer side. If you have anything to share about that. I do think it does. Yeah, we have to take it. In order for us to make the money that we make, people can say and do whatever they want to us, and we don't have any stand to be able to tell them, no, you can't talk to me like that. Just that's how it is. On top of that, when you work in a very lubricated environment, this is the chances of that happening skyrocket, especially over the course of one shift, the longer people are there, the more they drink, and it makes people think that they can do things that they wouldn't otherwise in their right mind do. And Ima, you were talking about the whole relationship of whether or not your waiters are sort of loyal to you or to their customers. If you are a business owner and you see one of your employees being abused, I'm not saying you personally, but it seems like that puts you in an awfully difficult circumstance, alienating the customer or protecting your worker. Right, and that's why I agree with them that the system has to change because right now everybody knows that it's dependent on the gratuity from the customer. And sometimes people don't leave a tip, or sometimes they leave a really insignificant tip. And those are the ones, sure there's people that go over, but those are the ones that would be eliminated if there were an across the board wage. And then you would take the, sometimes, you know how they say the customer is always right, the customer is not always right. You know, sometimes the customer is wrong. Customer deserves to be heard, but the customer is not always right. So, like I think what the women on the panel who work in restaurants are addressing is those cases when sometimes the customer is wrong. And sometimes, you know, I would say that the culture as existing contributes to not saying anything to that customer, both on the establishment side and on the server side, but hopefully the kind of changes we're talking about could address it. But also, and I've logged in over seven years in this industry, sometimes the problem is coming from the manager side. Because you're dependent on the manager to set the schedule, who knows, the more lucrative shifts, for instance. You know, a manager who could be treating you unfairly just as customers do and could penalize you greatly if you're moved from a Friday night shift to the Monday or Tuesday afternoon shift. So, it's not just a problem with customers, it's also this typical employer-employee power imbalance that is magnified in this industry. Well, thank you. That's all of our time for today. I'd like for you to join me in thanking our panel. Thank you all for attending and for some reason, you'd like to share a video of today's proceedings. You can find the video for this event at www.epi.org. You all have a great rest of your day. Thank you.