Will Tipped Workers Be OK?

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The Wall Street Journal tells us about the plight of tipped workers who are now unemployed:

Take Ian Prebo. On a good night, Mr. Prebo was making $400 in tips bartending at Seattle’s Blue Moon Tavern, which closed this month after a patron caught Covid-19. Since then, like many bars and restaurants across the country, Blue Moon Tavern—which can’t provide takeout or delivery—has remained shut.

Mr. Prebo, 36 years old, estimated roughly three-quarters of his monthly $3,500 income was from tips. After applying for unemployment benefits, he was told he would receive $188 a week. “I have customers who take care of me,” he said. “But the flip side is in a catastrophic event like this, my income is completely wiped out.”

Why does the Journal use this as its opening anecdote? As they acknowledge farther down, the median wage for tipped workers is a meager $2,000 per month, which means that Prebo’s experience is not even remotely typical. What’s more, the expanded unemployment insurance in the coronavirus rescue bill will pay at least $800 per week for low-wage workers. Virtually all of them will lose no income, and some might even make more than they did while working.

These are tough times, and the benefits from the rescue bill are still a few weeks away. I have nothing but sympathy for low-wage workers who are scared about what’s happening. Nevertheless, we’ve just passed legislation that will make up the lost income for nearly all of them, and surely that should rate more than a passing sentence midway through the story?

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