Bumping the minimum wage up to $10.10 an hour would lift nearly six million workers out of poverty, according to a new report by Restaurant Opportunities Centers United, a national organization dedicated to bettering the wages and working conditions for restaurant workers.
That’s more than half of the 10.4 million individuals classified as the “working poor” in 2011. People who fall in the working poor category have been part of the labor force for at least 27 weeks, but their incomes are below the poverty level, according to the U.S. Bureau of Labor Statistics.
About 60 percent of the workers who would emerge from poverty via a minimum wage hike proposed in Congress would be people of color, the report found.
The Fair Minimum Wage Act of 2013, S. 460 and H.R. 1010, which was introduced in early March, looks to increase the current federal minimum wage of $7.25 to $10.10 by 2015.
Under the measure, future minimum wage increases would be tied to inflation. And the base wage for tipped workers, which is currently $2.13 an hour, would be 70 percent of the overall minimum wage. U.S. Sen. Tom Harkin (D-Iowa) and U.S. Rep. George Miller (D-California) jointly introduced the bill, which is pending in House and Senate committees.
The country’s minimum wage has not stayed consistent with the realistic cost of living for decades, explained Emily Twarog, assistant professor at the University of Illinois at Urbana-Champaign’s School of Labor and Employment Relations.
“It’s a poverty wage no matter how you cut it,” she said.
The federal minimum wage has not seen an increase since 2009, while the tipped minimum wage has been frozen for more than two decades. Illinois’ minimum wage is $8.25 per hour, although Gov. Pat Quinn is in favor of raising the state's minimum wage.
Back in February, President Barack Obama called for a minimum wage increase to $9 an hour by 2015 in his State of the Union address, saying “no one who works full time should have to live in poverty.”
"It could mean the difference between groceries or the food bank; rent or eviction; scraping by or finally getting ahead. For businesses across the country, it would mean customers with more money in their pockets," he said.
Restaurant workers in particular tend to find themselves in poverty despite working full-time, the report noted. That’s because 39 percent of all American workers earning at or below the minimum wage are employed in the restaurant industry, which is also the largest employer of people of color. The restaurant industry employs more than 10 million workers.
“It’s ironic and it’s tragic that there are millions of Americans who work in the restaurant industry producing food all day, but can’t afford food for their own families,” said Jill Garvey, executive director of the Center for New Community, which helped release the report. “I think most Americans agree that this needs to be rectified.”
The restaurant industry is growing rapidly, Garvey explained, and it continued to grow during the major recession.
Restaurant workers who appear to be earning good tips often experience wage theft from management, Twarog said. This is especially true for tips paid out through a paycheck rather than by cash, she said.
Overall, people of color make up 40 percent of America’s tipped workers, and more than 23 percent of tipped workers are immigrants, according to the report. In comparison, immigrant workers make up 16 percent of the total workforce.
And 58 percent of all workers with incomes below the poverty line are people of color. Out of the tipped and restaurant workers with incomes under the poverty threshold, 50 percent are people of color.
Structural racism within the country’s food system is one of the biggest contributors to why workers of color have had trouble reaching the American dream, Garvey added.
“The fight to ensure the full and tipped minimum wages are actually livable is an issue of racial justice,” said Restaurant Opportunities Centers United co-director and co-founder Saru Jayaraman in a statement. “We’ve released this report near the anniversaries of the Fair Labor Standards Act and Martin Luther King Jr.’s march on Washington for jobs and freedom to make it clear that raising the minimum wages is about racial justice.”
But Twarog said it is unlikely the federal government will pass the Fair Minimum Wage Act of 2013 and raise the minimum wage anytime soon “given the divisiveness in Congress.”
“I just don’t even see how it would get passed,” she explained, adding that the National Restaurant Association, which is opposed to raising the minimum wage, also has “enormous power.”
The House shot down an amendment from U.S. Rep. Miller to the SKILLS Act back in March that would have raised the minimum wage to $10.10 an hour.
Garvey explained that the National Restaurant Association will likely fight hard to keep the tipped minimum wage from being raised by arguing that restaurants will have to raise their prices.
“I think we have to keep our eye on the priority here,” she said. “It is more important that every working American be able to make enough money to meet their basic needs, and I don’t think a lot of workers in the restaurant industry are able to do that unless they’re working for employers who are paying above the tipped minimum wage.”
Garvey added that the National Restaurant Association does not represent a large number of restaurants that are more family- and worker-oriented.
“I think that there’s actually a good percentage of restaurant owners out there who want to pay their workers a fair wage and do,” she explained. “Americans would gladly probably pay a little more for each meal to ensure that their neighbors and their friends and their community members are able to live above the poverty line.”
Twarog said she is more hopeful that a meaningful change to the minimum wage would come from individual states rather than from the federal government.
“I think on a state-by-state level there can be enough leverage,” she said. “I think it’s a long time coming for national change.”
Garvey acknowledged that the campaign to raise the minimum wage will be difficult, especially up against the National Restaurant Association’s strong lobbying power.
But it would be a "shame” if raising the minimum wage had to happen state-by-state, Garvey said.
“As a nation, we're really at this critical point where we’ve gone far too long without raising the wages for this specific group of workers,” she said.