A June 8 editorial in the New York Times calls for an increase in the minimum wage for tipped workers. Currently the minimum rate is $2.13 an hour, but if tips do not equal the regular minimum wage, employers must make up the different. In other words a waitress working forty hours a week must earn a minimum of $290 a week between tips and the guaranteed $7.25 an hour, but of course could earn more. In fact, according to the BLS, the median hourly wage (including tips) for waiters and waitresses was $8.92 in May 2012, above the full minimum wage. Of course, many servers do not work forty hours a week, more like 20-30 hours.
[The editorial also reports on wide-spread wage and hour and labor violations in the restaurant business which clearly needs to be addressed.]
According to the Editorial, tipped workers haven’t received a raise in 20 years. Once again we receive only the liberal perspective and an incomplete picture.
Logically, that is highly unlikely given the price of restaurant meals has risen on an annual basis and since tips are typically a percentage of the bill, tips have risen as well. And of course there is the matter of cash tips that escape reporting and taxation. It is also inaccurate to lump all tipped jobs together. There is a great difference between a diner waitress and one working in an upscale restaurant where an entrée alone averages $25.00 or more.
In much of Europe there is very minimal or no tipping. You don’t tip a bartender in England or Ireland. In some places a service fee is added to the bill. If you do tip it is no more than ten percent.
As long as we have the system we do, it is also incumbent on the customer to tip fairly. Based on my conversations with servers around the country, that is hardly the case.
QUINNSCOMMENTARY 
FYI cash tips absolutely do not escape reporting and taxation. There is a reporting process that assumes cash tips to be the same percentage as credit card tips.
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And if they are greater?
Dick
Blog http://www.quinnscommentary.com Twitter @quinnscomments
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On further examination of IRS rules we find this. “Employees who receive cash tips of $20 or more in a calendar month while working for you, are required to report to you the total amount of tips they receive. The employees must give you written reports by the tenth of the following month. Employees who receive tips of less than $20 in a calendar month are not required to report their tips to you but must report these amounts as income on their tax returns and pay taxes, if any.”
For large establishments the IRS requires the employer to assume tips of at least 8% of gross receipts if the employee does not report more. In other words, there is plenty of room for creative accounting on reporting tips.
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