The Economic Policy Institute, a left-leaning think tank, has released its own study of the issue, which suggests that $5.8 billion in tips would be taken from workers by owners each year, a little more than a 16% of all annual gratuities.
Quartz
February 2, 2018
While the Economic Policy Institute (EPI) also called on the department to “release its analysis immediately or, better yet, withdraw its proposal and refocus on its mission of serving working people, not big business,” the group has released its own analysis outlining the likely consequences of the proposed “tip stealing” rule (pdf).
EPI’s analysis predicts that if the department’s proposal is finalized:
- tipped workers would lose $5.8 billion a year in tips, with $4.6 billion of that coming from the pockets of women working in tipped jobs;
- the take-home pay of back-of-the-house or other nontipped workers would remain largely unchanged; and
- restaurant owners and other employers of tipped workers would get a $5.8 billion a year windfall.
Common Dreams
February 2, 2018
Well, about that. Bloomberg reports that the Department of Labor did in fact complete a study on how much money employers would steal from their workers, but senior officials ordered staff not to include it in the final proposal because it happened to show that “workers could lose billions of dollars in tips as a result of the proposal.” (A week after the study-less proposal was released, the Economic Policy Institute releasedits own study showing that employers would pocket $5.8 billion of workers’ tips.) According to Bloomberg, the department leadership was “uncomfortable” with everyone knowing exactly how fucked this proposal is:
Splinter News
February 2, 2018
The Department of Labor said it will publish a quantitative analysis of a proposed change to a tip pool rule — but not before the comment period has ended. “As previously stated, after receiving public comment, the department intends to publish an informed cost-benefit analysis as part of any final rule,” a DOL spokesperson said. The comments come after Bloomberg reported that the Trump administration suppressed an internal analysis showing the rule change would transfer billions from restaurant employees to business owners. The left-leaning Economic Policy Institute published its own analysis in January claiming workers would lose $5.8 billion in tips. Democratic lawmakers demanded the administration rescind the proposed rule in light of the revelations. Patty Murray (D-Wash.), ranking member on the Senate HELP Committee, accused the DOL of a “botched cover-up” and said the Trump administration should “abandon this effort immediately.” In a notice of proposed rulemaking posted in December, DOL said it “has asked some specific questions that may help the Department quantify benefits and transfers.” The rule remains open for comment until Feb. 5.
Politico Pro
February 2, 2018
The Economic Policy Institute has estimated the new rule will cost tipped workers $5.8 billion a year. That fact rather undermines the Trump administration’s claim that its policies are good for workers.
The National Review
February 2, 2018
The new tipping proposal would disproportionately affect women, the Economic Policy Institute said in its report. Of the $5.8 billion nationally in tips per year they estimate would be shifted from workers to employers, $4.6 billion — nearly 80 percent — would be pulled from the pockets of women working tipped jobs, the report says. These high numbers for women can be attributed to the fact that women are more likely to both be tipped and earn lower wages.
The Texas Tribune
February 2, 2018
Heidi Shierholz of the Economic Policy Institute pointed out the missing impact data back in December. She now says in a statement that: Thanks to excellent reporting, we now know that DOL did produce an estimate, which showed that the rule would be terrible for workers, shifting billions of dollars from workers to employers—so they scrubbed it. In so doing, they ensured that workers, advocates, and anyone else who wants to comment on the proposal would have to do so without key information about the impact of the rule. This shows the lengths to which the Trump administration and Secretary of Labor Alexander Acosta will go to hide the fact that they are taking steps to actively make workers’ lives worse. The EPI’s estimate was that tipped workers would lose $5.8 billion to their bosses. We still don’t know exactly how much the Labor Department estimated that would be, since they haven’t released the analysis they previously denied even having done. Shierholz, as well as Christine Owens of the National Employment Law Project, is calling on the Labor Department to withdraw the tip-stealing proposal.
Daily Kos
February 2, 2018
There’s a lot of guesswork involved in this kind of analysis, to be sure. (The left-leaning Economic Policy Institute, for instance, has estimated that employers could keep “between $523 million and $13.2 billion in workers’ tips annually.”) And frankly, as far as the propriety of this rule is concerned, it doesn’t matter how much money in tips employers would keep, because the law doesn’t authorize the Labor Department to regulate the practice anyway. The rule simply eliminates a previous one that shouldn’t have been enacted to begin with, and that was being challenged in court with some success.
The National Review
February 2, 2018
Of course, common wisdom is that the administration felt it was better off hiding that analysis, given the support it gets from wealthy restaurateurs. Think-tank reports have predicted a massive loss for tipped-wage earners — the Economic Policy Institute’s guess is that under the Trump rule, employers would pocket as much as $5.8 billion worth of workers’ tips each year. Economists have also been perplexed by the Labor Department’s alleged trouble figuring these numbers out. Agree or disagree with its number, but the Economic Policy Institute’s team says it took them about three days.
Grub Street
February 2, 2018
In all, American workers receive about $36 billion a year in tips, the economist Heidi Shierholz, a former Labor Department official, told me yesterday. The typical tipped worker receives about $1,000 a year in tips. The Trump proposal would make about two-thirds of this total vulnerable to seizure by business owners. (Shierholz goes into more detail in this Q&A, and The Times’s editorial board has also explained the issue.)
The New York Times
February 2, 2018