With the 2024 presidential election already in disarray, it’s no surprise that bar brawls have erupted over tipping. Former President Donald Trump stirred up the controversy at a campaign rally last month, Pledge If re-elected, he will repeal the tax on tips.
A few decades ago, this might have been dismissed as mere campaign hype, but today off-the-cuff rhetoric on the campaign trail is often the closest thing to deliberative policymaking. Republican senators are doing just that. The bill was submitted There are bills being introduced in Congress that would eliminate income taxes on tips, and the idea is also included in Republicans’ 2024 bill. platform.
But while Trump may think he’s the first politician to bring tipping policy into the mainstream, he’s actually late to the party: President Joe Biden spoke out about tipping during the 2020 election. Pledged So-called Tip Wage CreditThis is a practice that allows restaurant waiters and other hospitality workers to be paid less than the legal minimum wage, as long as they pay the difference through tips.
After taking office, the Biden administration Tightened It revised the rules on the tipped wage deduction, narrowing the types of work to which it applies and limiting its use in federal contracts. Progressive politicians at the state and local levels have called for eliminating the deduction and applying traditional minimum wage laws to all tipped workers. Voters in Washington, D.C., have Ballot Initiative The tip wage system will be abolished in 2022. Chicago followed suit. Last year, at the state level new york, Marylandand Illinois Recently, they considered a bill to do away with this model as well.
The motives are clear: Both parties are trying to appeal to the poor as part of an effort to garner working-class support: Democrats want to impose a one-size-fits-all minimum wage rule reminiscent of the New Deal era, while Republicans seem to think they can win big working-class support with a simple tax cut proposal.
Unfortunately, neither of these ideas are the best solution for helping restaurant and hospitality workers, many of whom prefer a tipped wage system. Make much more Cities like Washington, DC, which have eliminated the tipped wage deduction compared with the traditional minimum wage rate, have seen a surge in restaurants adding 10 to 20 percent “service charges” to customers’ bills, suggesting that eliminating the tip deduction often leads to higher food and beverage costs.
Regarding Trump’s proposal to end the tip tax: Disadvantage It’s unclear how much relief workers would actually get if it wasn’t paid as a benefit and applied to federal payroll taxes in addition to income taxes.
While there is much room for improvement in both policy proposals, the candidates are not wrong. The restaurant industry is the second-largest private sector employer, 15 million workers and, Workers without a college degree and Former inmateThe industry is considered vital in providing employment opportunities and economic benefits to the local community, with some commentators saying declare“When restaurants move, the economy moves.”
Despite its central role in the country’s economic prosperity, workforce issues continue to rock the industry. One of the main criticisms and shortcomings of restaurant work is that Lack of profits It is also well known that what workers get in these jobs lacks work-life balance, and many Spread “Just-in-time scheduling” allows employees to come to work quickly if demand for meals spikes in real time.
If politicians want to help restaurant workers, this That’s where they should focus. And the answer is to find nimble policy ideas that help both restaurants and workers, rather than simply mandating more benefits for workers. For example, the industry could perhaps: Portable delivery model It is gaining attention as a solution to increase benefits for workers in the gig economy. In fact, many restaurants Taking advantage of the gig economy Such practices could be encouraged and tied to a portable benefits model to fill restaurant shifts during very busy times.
The industry should be freer to experiment with creating entirely new systems of labor and employment laws. There are many ways to do this, but one possibility would be to create a joint committee with equal representation of restaurateurs and employees. The group would: both The groups agreed that if no agreement could be reached, current labor laws would continue to apply as they are now. But if they could reach agreement on new rules, both sides in the labor dispute could benefit from the policy experiment.
As an example, negotiating parties could agree to pay a higher minimum wage to workers who agree to be ready within two hours whenever needed (agreeing with the employer’s desire for just-in-time scheduling), while agreeing to pay a lower minimum wage for reliable regular work hours (providing an option for workers who want more predictability in their schedules).With regard to tips, agreements could be pursued such as allowing waiters to choose to receive 100% of tips, instead of being compensated at the traditional minimum wage, a mechanism that allows restaurant employees to decide for themselves how they want to be compensated.
In other words, the industry needs more flexibility and fundamental regulatory reform that can update labor rules for the 21st century — not just implement minimum wage rules from the last century or push for small tax cuts.
