The Low-Wage Truths of Subminimum Wage Work exposes how America’s tipped wage system—rooted in the legacy of slavery—continues to produce poverty-level wages across the restaurant industry, with the harshest consequences falling on Black women. Using national census data and worker surveys, the report shows that tipped restaurant workers earn just 37 percent of the national median income, while Black women in tipped jobs make only 63 cents for every dollar earned by white men—an inequity that has worsened since the pandemic.
The report finds that the subminimum wage for tipped workers is a major driver of race and gender pay gaps, forcing millions of workers to rely on customer bias and tolerate harassment just to survive. It also highlights how recent policy victories—like ending the subminimum wage in Chicago—offer a proven path forward. Raising wages to at least the full minimum wage, with tips on top, is not only essential to lifting pay for all tipped workers, but a critical step toward closing long-standing racial and gender wage gaps in the industry.