But the Economic Policy Institute estimates workers across the U.S. will lose $5.8 billion every year if the new rule goes into effect, and a study by the Restaurant Opportunities Center United and the National Employment Law Project found that the median share of hourly earnings that come from tips account for 58.5 percent of servers’ income and 54 percent of bartenders’ earnings.
Bay Area News Group
February 7, 2018
If the proposed rule goes on the books, it would put some of the most vulnerable workers in the country at the mercy of dishonest and unscrupulous employers. As a result, according to the left-leaning Economic Policy Institute, tipped workers stand to lose $5.8 billion a year—more than 16 percent of the estimated $36.4 billion in tips they earn each year, or an average loss of $1,000 per year per worker.
Slate
February 7, 2018
The Economic Policy Institute studied the change proposed by the Labor Department, and concluded it would reduce the average waiter’s income by $1,000 a year. Heidi speaks at 1:18-1:28.
NBC Washington
February 7, 2018
Indeed, the Economic Policy Institute, employing tried and true methods routinely used by the Labor Department, quickly found that by conservative estimates, employers would likely keep $5.8 billion in tips that would otherwise go to workers if the Labor Department finalized the rule change. … The agency’s cover-up has kept workers and their advocates, along with many other stakeholders, in the dark about critical evidence related to the impact of the proposal, which is already deeply unpopular with voters. Even before news about the Labor Department cover-up broke, a recent poll revealed that 82 percent of Americans disapprove of the proposal. Worse, 57 percent indicate that if it is finalized, they would tip less money and less often, a fact that indicates that the economic reality of this proposal is probably even far worse than the Economic Policy Institute or Labor Department first estimated.
The Hill
February 7, 2018
The Economic Policy Institute estimates the proposal would result in employers taking $5.8 billion in tips from workers. This would be a severe blow in an industry where abuse is already rampant. Employers of tipped workers are among the worst offenders in minimum wage violations, especially due to the subminimum tipped wage. Employers who pay a subminimum wage ($2.13 at the federal level) are technically required to ensure that tips bring employee wages up to at least the full minimum wage, but difficulties in enforcement result in high noncompliance rates.
Inequality.org
February 7, 2018
A proposed Department of Labor rule would allow employers to pocket their employees’ tips. The proposed rule in no way requires that these pocketed tips are distributed among employees—employers could simply take them (a fact the DOL tried hard to cover up). The Economic Policy Institute estimates that the rule would cause workers to lose $5.8 billion in tips per year. While being rightfully outraged by this prospect, we should revisit why tipping exists in the United States in the first place.
The American Prospect
February 7, 2018
Monique Morrissey an economist with the Economic Policy Institute opposed that idea. “We need to strengthen, not loosen, the distinction between employees and independent contractors,” she said. “I don’t have sympathy for companies who want to have it both ways.” Morrissey suggested expanding Social Security, which could reduce the number of retirement accounts gig economy workers juggle.
The Hill
February 7, 2018
“When the proposed rule came out it was stunning that there was no economic analysis in it, the agency claimed there was too much uncertainty but that seemed profoundly fishy,” said Heidi Shierholz, who was chief economist at the Department of Labor under President Barack Obama and is now director of policy at the Economic Policy Institute. Shierholz ran a study at the left-leaning think tank which found that the rule change could cost workers billions, as employers will likely fail to redistribute the money as proposed. “We believe employers will pocket between $523 million and $13.2 billion in workers’ tips annually, with $5.8 billion being our best estimate,” according to the study, which based its analysis on the notion that employers would pocket anything their tipped workers earn that is over the hourly wage these same workers could get in a nontipped job. (Heidi quoted throughout)
Newsweek
February 6, 2018
The left-leaning Economic Policy Institute think tank estimates that if the rule is implemented, nearly $5.8 billion in tips would shift every year from workers to employers. “The proposed rule does not require employers to distribute the tips, so employers would be no more likely to share tips with back-of-the-house workers than they would be to make any other choice about what to do with a business windfall, including using the money to make capital improvements to their establishments, to increase executive pay, or to line their own pockets,” the study said.
The Plain Dealer
February 6, 2018
There are roughly 1.29 million waiters, waitresses and bartenders who receive tips nationwide, according to the Labor Department. The new rules would not be restricted to the restaurant industry. An analysis from the left-leaning Economic Policy Institute found employers would keep $5.8 billion in worker tips each year, about 16% of all tips earned.
Los Angeles Times
February 6, 2018