Saru Jayaraman: The Devastating Impact of Subminimum Wages on Women

The NOW Feminist Public Square book club was honored to host Saru Jayaraman, author of the eye-opening book, “One Fair Wage.” In her publication, Jayaraman discusses the nuances of wage rates in the United States workforce, highlighting the systemic inequalities that millions of marginalized Americans face. To address the deficits in pay practices, Jayaraman launched the One Fair Wage national campaign, which advocates for the elimination of subminimum wages and the establishment of full, livable wages on a nationwide scale.

The federal minimum wage is set at $7.25 per hour. Nevertheless, millions of employees across the nation are only compensated with a subminimum wage rate of $2.13 per hour. In fact, 43 states allow employers to pay workers subminimum wages, so long as their tips – combined with their direct pay – amount to the value of minimum wage. This is the bleak reality for almost all tipped workers in the service industry.

The restaurant industry is the largest employer of women in the United States. Consequently, the overwhelming majority of tipped workers are women, meaning they are disproportionately affected by subminimum wages. In her webinar for the Feminist Public Square, Jayaraman discussed the myriad of repercussions caused by subminimum wages. Not only are tipped workers three times more likely to live beneath the poverty line, but they also experience higher rates of sexual harassment than workers in any other industry in the United States.

SEXUAL HARASSMENT: Subminimum wages force employees to rely on tips, rather than a set wage, for their basic pay. As a result, employees are often forced to tolerate inappropriate treatment from customers, as their wage is contingent on the tips they receive. Further, women are encouraged by employers to sexualize themselves at work in order to earn larger tips. Data has revealed that women who engage in flirtatious behavior and permit physical contact from customers are tipped significantly more than women who do not, which creates an incentive to act provocatively. Women workers frequently face vile sexual harassment in the workplace yet are unable to assert boundaries due to their financial needs. This leads women to internalize that sexual harassment in the workplace is inevitable, rather than unacceptable.

RACIST ORIGINS: The use of subminimum wages began in the late 1860s, shortly after slaves were emancipated in the United States.  As a way to circumvent providing newly freed slaves with fair wages, employers established a new norm; rather than being paid the hourly minimum wage, employers were able to force black employees to rely on only tips. When this practice began, black tipped workers did not receive a wage. Well over a century later, with tipped workers only being guaranteed a subminimum wage of $2.13 per hour, it is clear that the situation has not significantly improved. The economic repercussions of slavery on black Americans are still prominent today; it is not a coincidence that the lowest-paid workers in the U.S. are people of color, nor that black women receive less tips than any other group of tipped workers. Subminimum wage rates are a direct remanent of slavery and devalue the worth of minority populations’ time and effort.

MARGINALIZED COMMUNITIES: Tipped workers in the service industry are not the only employees who are compensated with subminimum wages. Disabled workers, youth workers, and incarcerated persons are equally if not more likely to be denied full, livable wages. This serves as evidence that the subminimum wage rate is innately ableist and legitimizes the devaluation of marginalized persons’ work.

WHAT THE EVIDENCE SHOWS: There is a common misconception that higher wages will lead to the economic decline of the service industry. However, evidence has suggested time and time again that this is not the case. In fact, the seven states that have outlawed subminimum wages have had higher restaurant sales per capita, as well as increased levels of job growth within the service industry. Further, when subminimum wages were eliminated, instances of sexual harassment towards women employees in restaurants were cut in half. This change can be attributed to the fact that women no longer had to endure harassment to financially provide for themselves and their families, as their wages did not depend on customers’ tips. 

EFFECT OF THE PANDEMIC: Over the course of the pandemic, millions of workers in the service industry have faced unprecedented unemployment, lower wages, and increased levels of harassment. For almost two years, workers have been forced to take on great health risks in order to maintain their employment status. Further, workers have had to enforce social distancing and mask protocol on the job, often navigating resistance from customers. Despite these sacrifices and additional obligations, employers have still failed to provide their employees with the full minimum wages that they deserve.   

HOW TO TAKE ACTION: For the first time in history, there is a chance to eliminate subminimum wage practices across the nation. This is not a partisan matter; in fact, there is overwhelming public support for establishing universal livable wage rates, regardless of citizens’ political affiliation. Moreover, there is momentum for positive change. The most effective route to raising wages to a livable standard is through legislative reform. Saru Jayaraman recommends that everyone immediately call their legislators and express support for the establishment of universal livable wages.

Additionally, Jayaraman is urging the public to provide establishments in the service industry with direct feedback. She encourages people to confront the managers of their favorite local restaurants and express why full minimum wages are necessary to achieve racial and gender equality. 

Jayaraman also encourages that the public educate themselves on the establishments in their local area that provide their tipped employees with full minimum wages. The directory of restaurants across the nation that provide fair wages can be found here: https://www.highroadrestaurants.org/.

Further, Jayaraman strongly recommends that all states implement at least a $15 minimum wage, with the ‘tip on top.’ Better yet, establishments in the restaurant industry should consider including an automatic gratuity fee within the bill, as many European and some American restaurants have already done.  

Subminimum wages perpetuate the oppression of the lower working class and prevent marginalized populations from improving their economic status and quality of life. In order for racial and gender equality to be realized in the United States, subminimum wages must be eliminated entirely.

Nora Weiss, Government Relations Intern

Further Information:

One Fair Wage: Ending Subminimum Pay in America, by Saru Jayaraman (2021)

Forked: A New Standard for American Dining, by Saru Jayaraman (2016)