White House urges higher pay for tipped workers

Federal minimum wage for workers who receive tips is $2.13 per hour

WASHINGTON, D.C. (Reuters) — The White House said on Wednesday raising the minimum wage for workers who receive tips would disproportionately benefit low-income women and help close the gender pay gap in which men earn higher pay than women.

The federal minimum wage for workers who receive tips is $2.13 an hour (all figures U.S.) — well below the minimum wage of $7.25 an hour. Even though employers are required to make up any shortfall between the tipped minimum and the standard minimum if gratuities fall short, one in 10 workers earn less than the minimum wage, the White House said.

"This provision is difficult to enforce," the White House Council of Economic Advisers said in a report. The president has asked Congress for an 18 percent, $41 million increase in funding for Department of Labor Wageand Hour division investigators to hold employers to the law.

The federal tipped minimum wage has remained at its level for more than 20 years, the White House said. The president supports raising the full minimum wage to $10.10 an hour and the tipped minimum to $4.90 by 2016 and eventually to 70 percent of the full minimum wage.

Such a rise would predominantly benefit women, the White House said. Of the 3.3 million workers in tipped occupations, about 2 million are restaurant servers, 70 percent of whom are women.

President Barack Obama's efforts to raise the minimum wage are unlikely to be taken up in the Republican-led House of Representatives, where Speaker John Boehner has argued that raising the minimum would hurt, not help, low-skilled workers because it could force employers to cut jobs.

Obama has highlighted efforts to improve economic opportunities for women in recent speeches, such as last week when he told an audience at a community college in Florida that he wants to take steps to raise pay for women, who make up a big share of the minimum-wage workforce.

"People naturally think about whether women are breaking through glass ceilings and making great strides and achieving the same kind of significant goals as men," CEA member Betsey Stevenson told reporters. "But equally, it's important to figure out how women are doing at the bottom."

The president is also hoping to rally women to support Democratic candidates as his party tries to prevent Republicans from taking over control of the Senate in elections this fall.

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