The debate over Congress raising the minimum wage nationwide is all about numbers. What the rate should be, how many people it would help, how many jobs it would cost, how easy it would be if Evil Rich People just surrendered their money instead. But at least one of these numbers is horribly skewed, resulting in a false narrative about how many people are scraping by on pennies an hour.
The latest brick in this narrative construction project is a report from the Institute for Policy Studies showing that if all the bonuses given to Wall Street bankers were instead distributed among people working minimum wage full time, their income would double. Wow! Let’s do that! For the children! Quick, grab your pitchfork, I’ll get my torch!
Not so fast.
The report cites 1,007,000 as the number of people working full time making the current federal minimum wage of $7.25 or less. Is that right? IRS data for 2013 shows the number of people working 35 hours per week or more at or below hourly minimum wage to be exactly that number. But there’s a huge problem with that figure - it includes people who get tips.
Waiters and other tip-paid professions have a different minimum wage than most other hourly workers: currently $2.13. “What? How can anyone live on that?!”, you might gasp. They don’t, of course. $2.13 is only the base salary they are required to be paid. They are paid tips based on their performance on top of that, which usually adds up to much, much more than even the standard $7.25 minimum wage.