Insight into Massachusetts Ballot Question 5: Minimum wage for tipped workers

A report released today by the Center for State Policy Analysis (cSPA) at Tufts University’s Jonathan M. Tisch College of Civic Life assesses the likely impact of Massachusetts Ballot Question 5, which would phase out the “tipped minimum wage.” Current rules allow restaurants to pay workers as little as $6.75 per hour, provided that tips cover the rest of the $15 per hour state minimum wage. If Question 5 passes, businesses will need to directly pay the full minimum wage for their tipped workers.

A separate provision of Question 5 would allow tips to be shared with cooks, accountants, and other non-management staff.

“Workers and restaurants will certainly feel the impact,” said Evan Horowitz, executive director of cSPA. “But the changes should be modest. Tipped workers will earn slightly more, and businesses will respond with new service charges and somewhat higher prices.”

Today’s report is the fifth and final in a series covering all state ballot questions.

Key findings of today’s report include:

• Eliminating the tipped minimum wage would likely increase earnings for waitstaff, bartenders, and other tipped workers.
• Covering the full minimum wage (before tips) will raise costs for tip-dependent businesses, who will compensate with a mix of higher prices, new service fees, reduced hiring, increased automation, and potentially lower profits.
• Allowing tips to be shared with kitchen staff could help equalize pay between front- and back-of-house workers. However, this provision has generated opposition from some servers who prefer the current system.
• No state has eliminated its tipped minimum wage in several decades, making it hard to know how the transition will play out in the post-pandemic economy.
• The District of Columbia is currently phasing out its tipped wage, leading to experimentation among restaurants and a broad conversation among diners about the appropriate role and size of tips.

READ THE FULL REPORT

cSPA’s analyses of all five Massachusetts ballot questions are now available for review.

cSPA provides expert, nonpartisan analysis of legislative proposals and ballot questions in Massachusetts. It is based at Tufts University and supported by Tisch College along with a diverse group of funding sources from across the political spectrum. These funders have no involvement in cSPA’s work across the Massachusetts ballot questions.