By: Elaine S. Povich, Stateline.org
Grace McGovern, a 24-year-old bartender and server at a downtown Boston brewery, recalls one recent customer vividly. He was very rude.
It was a slow night, and she only had one table, a large group led by a man who “kept touching my lower back and my leg and making jokes,” she told Stateline.
It rankled her, but she smiled and laughed along with him, knowing that much of her pay for the night would come from whatever tip he and his companions left her.
Now, McGovern has turned her irritation to action, and is advocating for a referendum that would raise the hourly rate for workers who earn tips up to the standard minimum wage.
“Men will still be creepy,” said McGovern, who is the state’s organizer for One Fair Wage, a national nonprofit seeking to end all pay below minimum wage. “But [if the referendum passes], I’m no longer relying on their money to make a full minimum wage for the day.”
In Massachusetts, the minimum wage is $15 an hour for most workers, but $6.75 an hour for tipped workers, as long as their tips bring them up to at least $15 an hour. Under the ballot measure, employers would pay $15 an hour and tipping would still be allowed.
But the Massachusetts Restaurant Association and some servers are against it. Restaurateurs say it would raise their costs and potentially push them out of business, while some waiters say it would actually reduce their pay.
The referendum is among those on the ballot in a half dozen states this November having to do with wages and benefits. Although ballot measures to raise minimum wages are typically popular, those in Massachusetts and Arizona affect tipped workers and have drawn significant opposition. Proposals in Alaska and Missouri also face some opposition, because they would require paid sick time along with hiking state minimum wages.
In addition, California has a ballot question that would increase the minimum wage from $16 to $18 per hour by 2026. In Oklahoma, a citizen initiative to raise the minimum wage secured the necessary number of signatures to be placed on the ballot, but a challenge appears likely to keep it off.
Presidential nominees Kamala Harris and Donald Trump have both promised to eliminate federal taxes on tips. which has spotlighted the issue of “tipped wages.” That, in turn, has brought attention to the wage referendums, which could affect turnout in key states such as Arizona.
Arizona’s ballot question would allow employers to pay tipped workers less. Currently, businesses in Arizona can pay tipped workers $11.35, $3 less than the state’s minimum wage, which increases with inflation. If voters approve the measure, employers would be allowed to pay workers 25% less than the minimum wage — or $10.77 an hour, currently — as long as their pay including tips is at least $2 above the hourly minimum wage.
A political action committee called Raise the Wage Arizona, which advocates for a minimum wage increase, challenged the ballot initiative in court, arguing that its title, the Tipped Workers Protection Act, was deceptive. But the Arizona Supreme Court rejected that claim and ruled it can stay on the ballot.
According to the National Conference of State Legislatures, 34 states, territories and districts have minimum wages above the federal minimum wage of $7.25 per hour.
Generally, ballot initiatives to raise the minimum wage are likely to succeed, according to Landon Jacquinot, policy analyst for the National Conference of State Legislatures. When the cost of living is rising, “people just want to keep up,” he said in an interview.
“It is popular because wages affect everybody. Even if you don’t work a minimum wage job, your neighbor might, or your kid might work in a fast-food restaurant,” he said. “Everybody knows somebody or has been in that situation of working a minimum wage job. It would have been nice to have made more money.”
But Gretchen Shelgren, a bartender at Mamma Mia’s restaurant in Plymouth, Massachusetts, said she’s against the referendum because she thinks it would cut her income.
She worked for 12 years in Bellingham, Washington, where there is a single minimum wage for all workers. The wage has been indexed to inflation since 1998 — and because of a 2016 ballot initiative, it jumped from $9.47 that year to the current $16.28 an hour.
Shelgren’s tips suffered under that system, she said, and she only got 10%-12% in tips, instead of the typical 15%-20%. “People don’t tip the same” when they know their server is already making the state minimum wage, she said.
A 2020 study by Michael Lynn, a Cornell University professor of consumer behavior and marketing, appears to bolster her contention. The study found that states with higher tipped minimum wages have lower average tip percentages in restaurants, but higher average tip percentages in coffee shops.
“Although the data are only correlational and do not prove causality, these findings support the idea that paying tipped workers higher wages decreases the tip percentages those workers receive,” Lynn wrote in the study.
Shelgren said she currently makes more than three times Massachusetts’ minimum wage, but she worries that would drop.
“I’ve made a great living as a single person, working flexible hours and raising my son,” said Shelgren, 51. “It’s a great quality of life and I’m concerned that’s being threatened.”
Massachusetts state Sen. Patricia Jehlen, a Democrat, sponsored a bill last year to do essentially what the ballot issue does, but it failed to make it through the legislature. She thinks the ballot measure has a better chance of success.
“It’s more popular with the public than the legislators,” she said in an interview. Legislators appeared reluctant to address the minimum wage in 2024, especially since it was just raised to $15 an hour in 2023.
In Missouri, the ballot measure would hike the $12.30 minimum wage to $13.75 by 2025, and to $15 an hour in 2026. It also would require employers to allow workers to accrue one hour of paid sick leave for every 30 hours worked.
Business groups, particularly those representing small companies, have asserted that the sick leave provisions will make Missouri’s atmosphere less favorable compared with nearby states.
In Alaska, the referendum on the minimum wage has three parts: It would raise the current $11.73 minimum wage to $15 an hour by 2027, require employers to provide workers the ability to accrue sick leave, and prohibit companies from punishing workers who fail to show up at employer-sponsored meetings involving political or religious topics.
Joelle Hall, president of the Alaska AFL-CIO union, said in an interview that one of the reasons to boost the minimum wage in the state is that Alaska is such an expensive place to live. Alaskans are “pretty solidly in favor of the minimum wage every time we bring it to them,” she said.
And, she said, there’s little earned sick leave in the state, which was underscored during the COVID-19 pandemic. As for the company meetings, she said, the union tried to get a similar measure through the legislature but failed. “So we said, let’s go straight to the people.”
But Kati Capozzi, president and CEO of the Alaska Chamber, said her business group opposes the ballot issue largely because of the issues other than the minimum wage. If it was just on the wages, “I can’t say confidently that we would have a position one way or the other,” she said in an interview.
The sick leave provisions could create problems, particularly for small businesses in the food service or tourist industries, Capozzi said. Most small tourist-related businesses operate seven days a week during a very short season, she said.
“It’s a really short 90- to 100-day season,” she said. “Small businesses are operating on very slim margins, and to slap these rules on them leaves them operating in the dark.”
