Harris Urged to End Subminimum Wage, Not Just Taxes on Tips

Economic justice advocates expressed appreciation for U.S. Democratic presidential nominee Kamala Harris' elevation of working class issues in her campaign at a rally in Las Vegas over the weekend, but called on the vice president to go beyond promises her Republican opponent has made and instead counter them with a plan to eliminate subminimum wages across the economy.

On Saturday, Harris expressed support for eliminating taxes for tips. The median tipped worker earns just $15,198 per year.

"It is my promise to everyone here when I am president, we will continue our fighting for working families of America including to raise the minimum wage and eliminate taxes on tips for service and hospitality workers," said Harris.

The vice president's pledge came weeks after One Fair Wage (OFW), a grassroots group fighting for policies that would "require all employers to pay the full minimum wage," published a report showing that ending taxes on tips would not help many of the people earning subminimum wages, as people across the restaurant industry and hundreds of thousands of workers with disabilities do—partially because many of these workers don't earn enough to pay income taxes in the first place.

"It's encouraging to see the Harris-Walz campaign focusing on the economy and the needs of tipped workers," said Saru Jayaraman, president of OFW, on Sunday. "The fact is two-thirds of tipped workers don't earn enough to pay income tax—and that's because of the racist, sexist subminimum wage that really should be the focus of Harris and [vice presidential candidate Gov. Tim] Walz's ire."

The report published in July by OFW—Short Changed: Ending Income Taxes On Tips Will Not Make Subminimum Wages Livable—was aimed at debunking the claim by Republican nominee Donald Trump and other Republicans, including Sen. Ted Cruz (R-Texas), that ending taxes on tips would meaningfully increase tipped workers' earnings.

A bill proposed by Cruz would leave out 95% of low- and middle-wage workers, the report noted, and "even among the one-third of tipped workers who would benefit from this tax relief, this tax relief would be experienced once a year at tax time, and would not relieve their need to pay rent and bills all year round."

Unlike exempting tipped workers from taxes, "providing these workers with a full, livable minimum wage with tips on top would significantly improve their economic stability and workplace safety," reads the report.

As Common Dreams reported in June, OFW dismissed Trump's pledge to eliminate income taxes on tips as "pandering" to low-income households, and the Culinary Workers Union Local 226 said that while "relief is definitely needed for tip earners... Nevada workers are smart enough to know the difference between real solutions and wild campaign promises."

David Dayen, executive editor of The American Prospect, noted that the culinary union supports eliminating the subminimum wage for tipped workers, which Nevada did at the state level last year.

"If Harris was looking to counter Trump's no taxes on tips, she could've endorsed ending the subminimum wage, which is much better policy," said Dayen.

The culinary union announced its endorsement of Harris last Friday, ahead of the vice president's rally, saying its members believe Harris will "tackle issues that are important to guest room attendants who clean hotel rooms, cooks who make gourmet food, and the tip-earning servers who deliver cocktails and unparalleled hospitality."

The union noted on Sunday that Harris had also pledged at the rally to "raise the minimum wage across the country."

The Nevada Current reported on Monday that the union and other advocates for economic justice, including U.S. Rep. Steven Horsford (D-Nev.), "hope to capitalize on a popular proposal to eliminating taxes on tips to push for a federal ban on letting employers pay tipped workers subminimum wages."

Horsford told the outlet that he is working with other House members to draft a bill that would end the federal subminimum wage, which is $2.13 per hour for tipped workers.

"Some of these employers are trying to keep workers at poverty wages," he told the Current. "We need to break that. We need to break this idea that people can work for less than a fair minimum wage and for me that's a livable wage."

Supporting such legislation, said Jayaraman, "is where the Harris-Walz campaign can make their mark—and make a real, meaningful difference in the lives of tipped workers."

"Focusing on tax relief distracts from the real solution: the need to end the subminimum wage, which is a direct legacy of slavery and contributes to the worst sexual harassment of any industry in America," said Jayaraman. "The Harris-Walz campaign should be calling for all workers to be paid a livable minimum wage with tips on top."