In Arizona, the minimum wage for tipped employees such as Tamar is $11.35 per hour. But this November, voters could approve a ballot measure allowing her employer to pay her an hourly wage of only $11 — or, what she can make for her company in less than a minute.
“That’s kind of a joke,” said Tamar, who asked that her last name and place of work be withheld to protect her job. "I make so much profit for the business, and now the state is doing nothing to make sure that I have enough money to take home and live a decent life.”
The measure in question is Proposition 138, which was referred to the ballot by Republican lawmakers and is backed by the Arizona Restaurant Association. If approved, employers could pay tipped workers 25% less per hour than the state’s minimum wage, as long as their total pay including tips is at least $2 above the minimum wage.
Currently, Arizona’s tipped workers can be paid $3 less per hour than the current minimum wage, which will increase to $14.70 per hour next year. If Proposition 138 passes, tipped workers like Tamar could be paid only $11.03 an hour — less than she makes now and 67 cents less per hour than she’d make when the minimum wage is raised in 2025. If she worked 40 hours a week for a full year, Proposition 138’s approval would cost her nearly $1,400.
Proposition 138 would not keep as much pace with inflation as the current system. For instance, a minimum wage hike to $18 per hour would allow tipped workers to make $15 an hour under current law. Under Proposition 138, employers could pay those employees just $13.50 an hour. Passing the measure would keep tipped workers behind the curb, according to Phoenix Sky Harbor International Airport restaurant server Meschelle Hornstein.
"Right now, we get the $3 less than minimum wage, so as the minimum wage goes up, our wage goes up," said Hornstein, a 21-year veteran of the restaurant industry who spoke out against the measure at the Arizona State Legislature in March. A union contract protects Hornstein’s salary, but she said that for many restaurant workers under Proposition 138, “the gap will just continue to get larger and larger, and tipped workers will get further and further left behind.”
That’s at odds with how the Arizona Restaurant Association has advertised Proposition 138. Ironically dubbed the “Tipped Worker Protection Act” — the group Raise the Wage lost a court battle claiming the law’s name was deceptive — the law is promoted on street corner signs as saving tips from an imminent threat that isn’t there.
Dan Bogert, the chief operating officer of the ARA, said “Prop 138 is necessary to protect Arizona’s restaurants and servers” because "it protects their ability to continue earning tips … by giving the tip credit constitutional protection." He said the actions of One Fair Wage, a national group that backed a ballot measure to increase the tipped worker minimum wage, actually endangered the tips of Arizona service workers.
Yet, Bogert and ARA make it seem like One Fair Wage’s measure will be passed if Proposition 138 doesn’t. That isn’t the case. One Fair Wage withdrew its minimum wage ballot measure in August due to a lack of valid signatures. There is no initiative on the Arizona ballot to raise the state minimum wage for anyone.
"Where's the problem? There is no problem," Hornstein said. "They're creating a fake problem to enrich their own interests."
Tipped workers say Proposition 138 would put the onus of paying servers a livable wage onto customers rather than employers.
Sam Dan Truong/Unsplash
Financial strain
Despite the ARA’s high-minded rhetoric, it’s not hard to see why restaurant owners want Proposition 138 approved."Seeing it from a business owner's perspective, it's more of them being like, 'Well, why wouldn't I?'" said a server at a local Mexican restaurant who asked to remain anonymous. "Obviously, it would be a disadvantage to anybody who is a service worker, but you do see it from their perspective, as much as you don't want to.”
But for many tipped workers, Proposition 138 represents a passing of the buck. Instead of employers being responsible for paying workers a livable wage, the onus is placed on tip-paying customers. “If the service industry workers got paid a decent hourly wage, then it would obviously help them, but also the customers as well,” Tang said. Hornstein agreed.
"Customers are always going to tip,” she said, “but they shouldn't be the reason why we pay our bills.”
Tang pointed out that working for tips often means financial insecurity, especially during Arizona’s hot summer months when fewer people patronize coffee shops, bars and restaurants. In May, she left her barista job at a local coffee shop for a salaried job at a hospital. If Proposition 138 passes, Tang and others think more workers might exit the industry.
That’s what Nelson Rodriguez is considering. A 15-year veteran of Arizona’s restaurant industry, Rodriguez took leave from his bartending gig at the Sheraton Phoenix Downtown to campaign for the Harris-Walz presidential ticket. If voters approve Proposition 138, he doesn’t see himself returning.
"I love bartending, I love serving. It's a passion, my bread and butter,” the 34-year-old Rodriguez said. "No matter how much I enjoy it, the financial strain and burden is just not gonna make it possible for me to want to go back."
The obvious solution is to campaign against the measure, but some who spoke to New Times said their colleagues were only passingly aware of it. Others who spoke to New Times had never heard of the Proposition 138. Thirteen statewide propositions are on the ballot this November, and that's a lot for anyone to keep up with.
"There are so many propositions on the ballot this year, (my co-workers) haven't really gotten into detail about any of them," said Tamar, who has worked in the dining industry for six years. "With it being so important to everyone that I work with, I'll probably bring it up and talk about it at work."
