Fair Wages: Essential for Health, Wellbeing, and an Equitable Society

We all deserve a living wage, but 43 states allow employers to pay tipped workers just $2.13 per hour. Could your family survive on that?

Editor's Note: In June 2025, One Fair Wage, NEA, Popular Democracy, and Community Change Action convened over 100 labor, worker, and community leaders to launch the 'Living Wage for All' initiative to raise wages closer to the cost of living per the MIT Living Wage Calculator and end all subminimum wages as they are all vestiges of historic discrimination.

We all want safe places to live, healthy food, good schools, reliable transportation, and the chance to help our families thrive. A safe, respectful workplace that pays fair wages is key to achieving this—but structural racism deeply embedded in the federal laws that govern wages has long disadvantaged millions of hardworking restaurant and service workers and their families. This has worsened economic inequality, harming women and people of color who make up a large segment of this workforce. To fix this, we must raise the minimum wage and end the subminimum wage for tipped workers. Doing so would improve the health and wellbeing of families and reduce hardship and poverty for millions of children.

Growing up as the child of immigrants from India in a Chicana/o neighborhood near Los Angeles, I saw firsthand how hard resilient families worked to make ends meet despite many obstacles and injustices they had to overcome. That drove me to pursue law school and organize immigrant workers when I graduated. Then, after September 11, 2001, when 73 workers at the Windows on the World Restaurant in the World Trade Center died and another 250 lost their jobs, I helped establish a relief center. Soon afterward, I began organizing restaurant workers around the country. Workers everywhere said wages were their top concern.

Determined to change this, I co-founded the Restaurant Opportunities Centers United and later co-founded One Fair Wage, a national organization of restaurant and service workers, restaurant owners, and organizations working for economic justice by ending the subminimum wage for tipped workers. Today in 43 states, the law allows employers to pay tipped workers a subminimum wage of just $2.13 an hour. The law requires employers to track workers’ tips and make up the difference if their earnings fall short of the minimum wage. But many employers ignore that mandate; in recent One Fair Wage surveys, 60% of restaurant workers reported making less than the minimum wage and said their employers were not making up the difference. And the vast majority of non-unionized restaurant workers have no access to benefits, including sick leave, paid maternity leave, healthcare, retirement, and childcare.

System failures can be reversed

This injustice is a direct legacy of slavery, and its impact is vast. Restaurant workers experience almost three times the rate of poverty and rely on food stamps at a higher rate than the workforce overall. This hardship is not distributed evenly; it takes the greatest toll on those who our systems were designed to disadvantage. Seven in ten tipped workers are women. People of color, immigrants, and single mothers also are overrepresented in these low-paying jobs. Workers of color have especially low wages, both because customers tend to tip them less due to discrimination and because the industry segregates them into lower paying jobs at more casual restaurants. Federal law also allows employers to pay a subminimum wage to workers with disabilities, incarcerated workers, and youth workers.

All of this leaves our nation’s more than 5 million tipped workers at risk for harassment and abuse on the job and surveys show it is rampant. Restaurant servers in particular face the highest levels of sexual harassment of any industry because when you depend on tips to feed your family, you’re going to put up with however they touch you or treat you or talk to you. It doesn’t have to be this way; in the seven states that have eliminated the subminimum wage for tipped workers, rates of sexual harassment were cut in half.

With the restaurant industry a fast-growing sector of the workforce, eliminating the wage bias embedded in our economic system should be an urgent priority. By ending the subminimum wage for tipped workers, One Fair Wage is working to dismantle a root cause of inequity and give everyone a fair chance to succeed.

COVID brings a shift in attitudes—and power

The COVID-19 pandemic brought a reckoning. Many restaurant workers had to return to their jobs before it was safe to do so because their low wages disqualified them from unemployment insurance. As a result, 12,000 restaurant workers died.

Fed up, workers banded together to reject the status quo that was perpetuating hardship and inequity. Some 1.2 million restaurant workers walked off their jobs, forcing thousands of restaurants to raise wages to attract staff. Workers gained power by refusing to tolerate unfair conditions any longer.

As a result, I believe we are at a turning point. In my 22 years of doing this work, I’ve never seen a moment like the one we’re in now. Workers are transforming the economic system and creating hope for policy change, too. They’re dismantling the inequitable structures that have stood in the way of fairness and opportunity for too long. This is a historic moment with tremendous potential.

Tools for progress

Education is a powerful tool that can build support and drive progress toward fair wages. Few people know that there’s a subminimum wage for tipped workers and most are shocked when they learn that anyone is paid just $2.13 per hour. Customers assume their servers (and other restaurant workers) receive a fair wage and the tips they provide are a bonus. But tips actually allow owners to pay less because tips from customers are bringing the wages of tipped workers up to the level of the minimum wage. So, often tips don’t result in workers being paid more.

Learning how little employers pay tipped workers generates outrage that we are channeling into action. That’s why ballot measures, a vitally important form of direct democracy, have been so effective in getting states and localities to end the subminimum wage. Despite opposition from the restaurant industry, we have been able to pass almost all our ballot measures. We won one fair wage through ballot measure in the District of Columbia, through city ordinance in Chicago, and most recently through a combination of ballot measure and court ruling in Michigan. There, the state Supreme Court ruled in late July that the state legislature could not block the ballot measure voters had opted to put on the statewide ballot to raise the state’s minimum wage and end subminimum wages for tipped workers, workers with disabilities, and youth. These were historic wins that we aim to replicate in multiple states in coming years.

Our ultimate goal is to end this devastating legacy of slavery nationwide in the next decade, through federal policy that ends all subminimum wages. By doing so, we can pave the way together to a more equitable future where our systems respect the dignity of work, and everyone has a fair chance to be healthy, prosper, and thrive.

About the Author

Saru Jayaraman is co-founder and president of One Fair Wage, a national nonprofit working for fair wages for restaurant and other service workers and an end to the subminimum wage nationwide, and director of the Food Labor Research Center at University of California, Berkeley.