CounterPunch Exclusives

CounterPunch Exclusives

The Subminimum Wage: 35 Years and Still Waiting for Change

As another April 1st rolls by, it marks 35 years of the $2.13 federal subminimum wage. Yes, I realize this seems like an April Fool’s joke, but it is no joke for millions of tipped workers.

How did this happen? The 1996 amendment to the Fair Labor Standards Act froze the subminimum wage “in perpetuity” at the behest of the National Restaurant Association. It has been stuck at $2.13 since 1991.

As I explain in more detail in this paper, the mechanics and the legality of the subminimum wage (also referred to as the tipped wage) hinge on the “tip credit” allowance, which is the difference between the regular minimum wage and the subminimum wage. Federally, that $7.25 minimum........

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