On Equal Pay Day, One Fair Wage Calls for an End to the Subminimum Wage as a Key Driver of the Gender Pay Gap

New report finds women tipped workers earn just 82 cents on the dollar compared to men, with Black women earning as little as 63 cents

Still Waiting For Equal Pay

New York, New York – Today, on Equal Pay Day, One Fair Wage is calling attention to the persistent gender pay gap in the United States and the role the subminimum wage plays in driving inequality for millions of women workers. While women overall earn approximately 83 cents for every dollar earned by white, non-Hispanic men working full-time, year-round, the gap remains entrenched and even more pronounced in the restaurant industry, where the majority of workers are women.

According to One Fair Wage’s new report, “Still Waiting for Equal Pay,” women in tipped restaurant jobs earn just 82 cents for every dollar earned by men in the same industry. The report identifies the federal subminimum wage of $2.13 an hour as a key structural driver of this disparity, suppressing base wages and forcing workers to rely on tips that are often shaped by gender bias and economic volatility.

The restaurant industry remains one of the worst offenders for gender and racial pay gaps, as tipped workers—predominantly women—are routinely forced to live off subminimum wages that make them vulnerable to economic instability and exploitation. Women in the restaurant industry make significantly less than their male counterparts, not only in hourly wages but also in annual income, exacerbated by customer biases in tipping and systemic barriers that segregate women into lower-paying positions.

For Equal Pay Day, One Fair Wage is releasing data on how the restaurant industry’s widespread practice of paying workers a subminimum wage perpetuates large wage gaps, leads to rampant wage theft, and forces many women to leave the industry altogether in search of stable, living wages.

Key Findings from One Fair Wage Report: Still Waiting For Equal Pay

• Gender Pay Gap in Tipped Work: Women tipped workers earn just 82 cents for every dollar earned by men, reflecting a persistent and systemic gender wage gap within the industry.
• Subminimum Wage as a Structural Driver: The $2.13 federal tipped wage suppresses earnings and forces workers to rely on tips, making income dependent on customer bias and inconsistent demand.
• Disproportionate Impact on Women of Color: Black women tipped workers earn just 63 cents on the dollar compared to white men, facing the steepest pay disparities in the industry.
• Economic Instability and Workforce Turnover: Low base wages and declining tips are pushing many women out of the restaurant industry, even as they express a desire to stay if they could earn a stable, livable wage.
• Harassment and Workplace Vulnerability: Women in tipped positions report high rates of sexual harassment, driven by their dependence on tips and pressure to tolerate inappropriate behavior to earn income.

Historical Context

The subminimum wage for tipped workers is rooted in a pay structure established to deny Black women any wage at all. During the Reconstruction era, restaurant owners who did not want to pay newly freed slaves justified exploiting Black women by forcing them to live off tips rather than earn a base wage. This discriminatory practice continues to harm women workers today, maintaining a two-tiered system that disproportionately impacts women of color.

Call to Action

Across the country, a growing national movement is demanding a Living Wage for All, with active campaigns in states and cities including Washington, DC, Los Angeles, Alameda County, Michigan, New York, and Chicago. These efforts are calling for wage floors of at least $25 per hour and up to $30 in higher-cost areas, reflecting what it actually takes to meet the cost of living in today’s economy. Nearly half of U.S. workers still earn less than $25 per hour, even as that is now the minimum needed to cover basic needs in most parts of the country.

With more than 100 labor, civil rights, and community organizations united in the Living Wage for All coalition, this represents the largest coordinated national effort to raise wages in the country today. Organizers say the demand is clear: workers are not asking for incremental increases that fall short of what they need to survive, but for wages that actually meet the cost of living, with no exceptions.

Advocates emphasize that ending the subminimum wage is central to this effort. Without eliminating the two-tiered wage system, millions of workers—especially women and women of color—will continue to be left behind. On Equal Pay Day, organizers are calling for a unified national response to the affordability crisis: raise wages to at least $25 an hour, move toward $30 where needed, and ensure that every worker in America is paid a full, fair wage.

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One Fair Wage is a national organization of nearly 300,000 service workers, over 1000 restaurant employers, and dozens of organizations nationwide all working together to raise wages for all workers, end all subminimum wages in the United States, and improve working conditions in the service sector in particular. One Fair Wage policy would require all employers to pay the full minimum wage with fair, non-discriminatory tips on top, thus lifting millions of tipped and subminimum wage workers nationally out of poverty. For more information, visit www.onefairwage.org.