Monday, March 14, 2005

Minimum wage and tips

Waiterrant argues, reasonably, that recent legislation to eliminate the mandatory $3.85 that folks who work on tips get, is mean and a bad idea. As he acknowledges, the $3.85/hour is a small fraction of this total income, but his total income is small and he needs ever cent he can get.

I don't know the details of the legislation, but let's just say it was to eliminate any minimum wage requirements on employees who get money in tips. This to me sounds like eliminating the minimum wage, which I think is good because minimum wages price out the lowest skill workers, while transfering a small amount of money to high-skill minimum wage workers, also known as high-school students, who are not poor. Would repealing a minimum wage for waiters make their wages go down, or would restaurants ensure that a waiter's total compensation was roughly the same as before? I don't see how restaurants could avoid paying waiters more.


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