White House: raise tipped minimum wage to help women

Updated at 4:26 p.m.

A new report from the White House argues that raising the minimum tipped wage, which has been stuck at $2.13 for more than 20 years, would have an outsized effect on the lives of women who make up more than half the workforce of people who rely on tips to earn a living.

President Obama has made raising the minimum wage a top goal for the year and is pushing for a national minimum of $10.10 per hour, up from the current rate of $7.25. He already signed an executive order to raise the minimum wage and minimum tipped wage for federal contract workers, but would rely on Congress for a broader increase.

"What every American wants is a paycheck that lets them support their families... and pass down some hope and optimism to their kids," he said at a speech at Central Connecticut State University earlier this month, part of his push to raise public support and pressure reluctant Republicans in Congress.

The president supports raising the tipped minimum from the current level of $2.13 to $4.90 by 2016. Eventually, he would like to see it equal 70 percent of the full minimum wage. It would affect about half of all workers in predominantly tipped occupations, the White House concludes.

Vice President Biden visited a D.C. restaurant Wednesday to praise the owners for voluntary paying workers for paying $3.77, more than the tipped minimum wage amount.

"In this battle here about some kind of wage equity, I don't want it to go unnoticed: there's a lot of restaurant owners around the country that think that the wage being paid should be raised and that it's good for business overall. When you raise the tipped wage, the tip minimum, or the overall minimum wage, all of that money goes back into the economy," Biden said of Imar Hutchins, who owns the Florida Avenue Grill.

"The idea that you can work 40 hours a week and still be in poverty is just ridiculous, it's ridiculous," he said.

The report concludes that women make up nearly three quarters of all workers who work in predominantly tipped occupations, like servers, bartenders and hairstylists. Their average hourly wages are nearly 40 percent lower than people who hold other jobs that pay average hourly wages, leading to a doubling in the chance that they experience poverty.

It also notes that the real value of the tipped minimum wage has gone down by 40 percent, and it's at the lowest share of the minimum wage since it was established in 1966. More than one in ten workers are paid below the national minimum wage of $7.25, even though employers are supposed to make up the difference, which is hard for the government to enforce.

At the crux of the report is an argument that an increase would be beneficial for families: 26 percent of all workers in predominantly tipped wages have dependent children, including 31 percent of female workers. It would affect 2.8 million working single parents, of which women comprise 80 percent.

Republicans have argued that a minimum wage increase would cost jobs, and trumpeted a Congressional Budget Office (CBO) report released in February that said increasing the minimum wage to $10.10 an hour would reduce employment by about 500,000 workers (it also said about 900,000 of the roughly 45 million Americans who live below the poverty threshold would be lifted above it).