Minimum Wage Position Paper
A. Is Tipping optimal for Employers and Employees?
C.1 Economic Point of View
There is disagreement among economists, business leaders, and labor activists regarding whether the tipped wage should be higher and whether tipped employees should receive a different wage than non-tipped workers.
Proponents of a different wage for tipped and non-tipped workers point out that the law guarantees tipped employees the same minimum wage that other workers receive. They argue that because restaurants have very small margins, an increase in the minimum wage could lead to higher prices for consumers and fewer jobs available for latent employees. A 2011 study suggested that 2011’s WAGE Act, which would have raised the minimum wage for all tipped employees …show more content…
Others argue that because tips often represent 50%-90% of a waiter’s income, workers’ incomes are unfairly vulnerable to fluctuations in customers’ generosity. Also, opponents of the current minimum wage for tipped employees point out that the tipped minimum wage has remained stagnant since 1991 despite increases in the cost of living and in the standard minimum wage over that same …show more content…
In the USA, tips make over half of restaurant workers’ income (Azar and Yossi, 2008). One might question whether or not tips are actually being distributed fairly to the service employees in the restaurant. Employee motivation and perception of fairness in the restaurant industry is vital to the future success of restaurant organizations because if recognized correctly, managers can avoid the high costs associated with turnover. (Dermody, M. Young, M. and Taylor, S. 2004). Because competition is steady with other industries to attract and retain workers to meet the demand of consumers, restaurant employers stand to gain by achieving a better understanding of worker motivation (Enz, C.A.
C.1 Economic Point of View
There is disagreement among economists, business leaders, and labor activists regarding whether the tipped wage should be higher and whether tipped employees should receive a different wage than non-tipped workers.
Proponents of a different wage for tipped and non-tipped workers point out that the law guarantees tipped employees the same minimum wage that other workers receive. They argue that because restaurants have very small margins, an increase in the minimum wage could lead to higher prices for consumers and fewer jobs available for latent employees. A 2011 study suggested that 2011’s WAGE Act, which would have raised the minimum wage for all tipped employees …show more content…
Others argue that because tips often represent 50%-90% of a waiter’s income, workers’ incomes are unfairly vulnerable to fluctuations in customers’ generosity. Also, opponents of the current minimum wage for tipped employees point out that the tipped minimum wage has remained stagnant since 1991 despite increases in the cost of living and in the standard minimum wage over that same …show more content…
In the USA, tips make over half of restaurant workers’ income (Azar and Yossi, 2008). One might question whether or not tips are actually being distributed fairly to the service employees in the restaurant. Employee motivation and perception of fairness in the restaurant industry is vital to the future success of restaurant organizations because if recognized correctly, managers can avoid the high costs associated with turnover. (Dermody, M. Young, M. and Taylor, S. 2004). Because competition is steady with other industries to attract and retain workers to meet the demand of consumers, restaurant employers stand to gain by achieving a better understanding of worker motivation (Enz, C.A.