the CASE for PHASING OUT MAINE’S SUBMINIMUM WAGE for TIPPED WORKERS

A $12 minimum wage in Maine by 2020 would raise wages for 181,000 residents.2 The ballot proposal would also gradually eliminate the subminimum wage for tipped workers, currently set at 50 percent of the full minimum wage, or $3.75 per hour.3 Under current law, employers can pay tipped workers the lower tipped wage as long as gratuities cover the difference between the regular minimum wage and the. [...] By eliminating the subminimum tipped wage, the ballot initiative would directly address the economic insecurity and high rates of sexual harassment that uniquely affect the nearly 24,000 tipped workers in Maine.5 This report analyzes the impact of maintaining a lower minimum wage for tipped workers and draws from the experience of “One Fair Wage” states and cities that have abolished the subminimu. [...] 12 F2 Comparing the $10 subminimum tipped wage in Maine with the minimum wage in the seven One Fair Wage states (2001–2015)102 $2 2001 2015 F3 Comparing 1.95 restaurant employment 1.75 in Maine with restaurant 1.55 employment in the seven One 1.35 Fair Wage states (2001–2015) 103 1.15 0.95 2001 2015 F4 Comparing 1.8 the growth of restaurant 1.6 establishments in Maine with the 1.4 same growth in t. [...] The high estimate is based on the difference between the base wage ($3.75) for all tipped workers and the new minimum wage of $12 per hour, a stimulus that would benefit the local economy, including the restaurant industry.109 The lower estimate includes a number of tipped workers who report earning less than the state minimum wage of $7.50 per hour, a number that would decrease after adop- tion o. [...] the average of: 1.) a high estimate of the increase from the tipped to the full minimum 22 wage, assuming all restaurant tipped workers earn the tipped minimum wage of $3.75 and 117 Blanca Torres, “A year in, ‘the sky is not falling’ from Seattle’s minimum-wage hike,” March other tipped workers earn $5 per hour, times the number of workers in each category, times 31, 2016, The Seattle Times, avail.