What you know (and don't know) about the minimum wage

The conversation surrounding minimum wage issues has been a pretty hot during this year’s election season. With Bernie Sanders pushing for a $15 federal minimum wage, Hillary coming in at $12 and no one believing that $7.25 is enough to live on, a major change is coming. The question is less when more how much

When we offered our recent quiz on the history and basics of the minimum wage, we expected mixed results and that is exactly what we got. 

When it comes to the backstory of the minimum wage, you didn’t know much about it. Less than half of you knew when it started (1938) and almost half of you thought the US was the first to require it (it was Australia, actually). We aren’t claiming that knowing the history of the minimum wage will insure you are ready for the impact of an increase, but the more you know the better you will be able to manage.

As far as the other aspects of the quiz, the questions that centered around the rules demonstrated that you were more informed on the statutory elements of the minimum wage. Questions about the current rate ($7.25) and whether it reacts to inflation were answered correctly by almost 75%, while 85% of you knew that 2009 was the last time the federal minimum wage was increased. However, there was one question in particular that we feel strongly you need to be more aware of the correct answers. 

The threshold for tips earned that mark an employee as eligible to be paid with tip credit is $30 a month (only 24% of you knew that value). That basically means that you can pay tipped minimum wage to any busser, barback or back-server that receives more than $30 in tips per month. While you likely wouldn’t reduce wage rates for those positions, you should at least know that you can get credit for their tips against the minimum wage. 

So let’s say you have a busser at $7.25/hr. You may not need to increase their rate if the Feds raise the rate. You can use their tip credit to cover your minimum wage requirement. That simple work around could save you a substantial amount of wages.

Overall, you had a decent grasp on the current state of the minimum wage and we hope you will now use that knowledge to manage the impact any increase on your operation. Fortune favors the prepared and the informed manager is a formidable one as well.