What's the Significance of $2.13?

2.13 is not just today's date. Astonishingly, $2.13 is also the federal minimum cash wage for tipped employees — just as it has been since 1991. Since most of the workers who rely on tips, especially in the restaurant industry, are women, this shocking figure not only contributes to the economic insecurity of restaurant workers, it also contributes to the gender wage gap.

As an important new report from Restaurant Opportunities Center United explains, in the large and growing restaurant industry, a lower wage for women is a matter of public policy: predominately male positions have a different minimum wage than predominately female positions. Women represent less than half (48 percent) of non-tipped restaurant workers, who are subject to the regular $7.25 federal minimum wage. However, two-thirds of tipped restaurant workers are women, subject to the federal minimum cash wage of only $2.13/hour.

Lower wages have a real impact on women and their families. Servers represent the largest group of tipped workers and are mostly women (71 percent). In part due to the low tipped minimum wage, servers experience almost three times the poverty rate of the workforce as a whole.  Many of the workers who serve our food when we enjoy a meal out struggle to feed themselves and their families.

But tipped workers aren’t the only women being held back by low minimum wages. NWLC’s new fact sheet shows how an increase in the regular federal minimum wage could make a difference for women, who represent nearly two-thirds of minimum wage workers:

• A woman working full time, year round at the federal minimum wage of $7.25 an hour earns just $14,500, more than $3,000 below the poverty line for a family of three.
• Increasing the minimum wage to $10 per hour — close to where it would be if it had kept pace with inflation — would boost annual earnings to $20,000, enough to pull a family of three out of poverty. 
• Increasing the minimum wage would mean higher pay for millions of women and would help close the wage gap. In 2010, women working full time, year round were paid only 77 cents for every dollar paid to their male counterparts.

People earning minimum wage are not just teenagers with after school jobs; they are also women trying to support families. Full-time workers made up 38 percent of the minimum wage workforce in 2010, and most of those workers (57 percent) were women. Most women making minimum wage also do not have a spouse's income to rely on.

It's time for the minimum wage to catch up with the times. Some states are taking the lead, but Congress will need to act to raise both the federal minimum wage and the tipped minimum wage to ensure that women around the country have a fair shot at building economic security.