A new study released by the Employment Policies Institute finds state-level $15 tipped minimum wages will cost jobs and earnings for restaurant employees. In next week’s elections, voters in several states will be tasked with choosing whether or not to enact similar wage hikes for tipped employees.
The study, conducted by Drs. William Even (Miami University) and David Macpherson (Trinity University), is based on previous research that found a $1 increase in state tipped wages resulted in a 6.1% decrease in restaurant employment and a 5.6% decrease in employees’ earnings. Even and Macpherson use this finding to estimate the losses resulting from a $15 tipped minimum wage for each state.
Read Even and Macpherson’s key findings below, and view the full report with state data here.
- The United States could lose as many as 801,224 jobs in the restaurant industry under a $15 minimum wage with no tip credit, with 466,040 of those jobs belonging to tipped restaurant employees. The states with the largest number of jobs lost include Texas (127,477 lost), Ohio (63,205 lost), Pennsylvania (57,291 lost), North Carolina (46,738 lost), and Michigan (43,568 lost).
- Full-service restaurant employees across the U.S. could lose nearly $2.2 billion in total annual earnings due to a $15 tipped minimum wage. States with largest earnings losses include Texas ($452 million lost), Georgia ($151 million lost), North Carolina ($143 million lost), Virginia ($129 million lost), and Tennessee ($113 million lost).
- Eliminating the tip credit and raising state tipped minimum wages to $15 would cost the average family with a tipped worker thousands of dollars per year in annual income. The largest losses for families of tipped workers will fall in the following states: Texas ($4,942 lost annually per family), Virginia ($4,899 lost per family), New Hampshire ($3,755 lost per family), Mississippi ($3,651 lost per family), and Nebraska ($3,597 lost per family).