Opinion: It’s time for New York to eliminate the subminimum wage for tipped workers

President Donald Trump has tried to pander to restaurant workers by promising to end taxes on tips, even going so far as to include that measure in the recently passed federal budget bill. Yet the fact is that the cuts in Trump’s budget – especially cuts to Medicaid – will hurt more workers than ending taxes on tips would help. Democrats in New York have an opportunity to actually deliver meaningful change for restaurant workers while shutting down Trump’s cheap publicity stunt by finally passing legislation to end the subminimum wage and raise the minimum wage for all, with tips on top.

Trump’s measure to end taxes on tips is little more than a PR stunt to try and distract working-class Americans from the fact that the vast majority of the Trump agenda benefits corporations and the super-rich. But the fact is, the “no tax on tips” policy also mainly benefits better-off restaurant workers. Since more than two-thirds of restaurant workers nationwide work in casual restaurants and bars where they do not earn enough money to pay federal income taxes, that means the policy wouldn’t help them at all. And for those who do earn enough, Trump’s policy only applies up to $25,000 in tips and it’s a deduction, so tips are still subject to payroll taxes. That’s why many economic analysts have agreed that the more effective way to help tipped workers is to end the subminimum wage – which is $2.13 an hour at the federal level and hasn’t been raised a penny since 1991.

But what’s even worse is that the extreme cuts in Trump’s budget will do more to hurt tipped workers than help them. Because of their subminimum wage, tipped restaurant workers experience poverty at more than double the rate of other workers. That’s why restaurant workers – the servers and bussers who put food on our tables at restaurants – are twice as reliant on food stamps as other workers, requiring subsidized government SNAP benefits to put food on their own families’ tables. Trump’s budget would cut those SNAP benefits. And because of poverty induced by subminimum wages, restaurant workers also disproportionately rely on Medicaid for health care – which Trump’s budget will cut more severely than at any point in U.S. history. Under Trump and the GOP’s extremist budget, over 1.2 million restaurant and hospitality workers could lose their health care coverage.  

To be clear, that’s not just bad for the workers themselves. When restaurant workers don’t have the health care they need, they’re often forced to go to work sick, which creates serious public health risks. No one thinks that restaurant workers should show up for their shifts when they’re sick, but because of poverty wages and a lack of paid sick leave, they already do far too often – and cutting Medicaid will only exacerbate this.

In New York, we have an alternative path. We are the cosponsors of legislation that would finally end the subminimum wage across New York state. Honestly, it’s something our state should have done years ago; the subminimum wage for tipped workers is a holdover from the era of slavery and contributes to the worst rates of sexual harassment of any industry in the nation. Yet we have an extra reason to do so now. Passing this bill would show that Democrats genuinely support tipped workers with real, meaningful policy reform that makes their lives better and puts more money in their pockets – in contrast to Trump, who is trying to pander to tipped workers while actually hurting them with his policies.

Yes, this is important as costs are rising and working folks’ wallets are stretched thinner and thinner. But it’s also important in this political moment to distinguish the vision and values that Democrats stand for and help us win back working-class voters. We have an opportunity in New York state to show up Donald Trump and the GOP’s disastrous anti-worker budget while also showing that Democrats truly are the party of working people.