seem to ever get ahead. During a recent
shift, she was staring down a weekend
where she’d need cash for a cake for her
daughter’s 11th-birthday party, $650 for
a new evaporator for her car and quar-
ters for the laundry. She feels the weight
of taking a day without tips, wonder-
ing whether she’ll have enough to pay
for back-to- school season, or the money
that finally allowed her to get an air con-
ditioner for her apartment. “My mind is
always calculating,” she says of each tip,
good or bad. Though the women at the
diner will chip in and pay for one anoth-
er’s expenses in case of emergency—a
car accident, a babysitter or even funeral
costs—slow shifts mean they’ll have to
lean more on the one free meal they get
at work, or make another trip to the food
bank, or dip into whatever cash they have
stored away from a better week.
Because their pay is so unpredictable,
the women at Broad Street Diner some-
times have to pull double or triple shifts
when they’re short on cash. The day be-
fore Munce drove Klum home, Klum had
worked her regular day shift, taken her
5-year-old daughter to a public splash
park, and then gotten a call from her man-
ager at 11 p.m. to come in for a night shift
three hours later. Klum paid for a Lyft to
the diner, since public transportation
doesn’t run to her apartment after mid-
night, then worked a double shift, from
2 a.m. to 3 p.m. “The diner’s been slow, so
I really needed it,” Klum says. But as bad
as the money can be, it’s helpful to be able
to go home with cash in hand. She still
holds out for the chance of one big payday,
obsessing over YouTube videos where
women are left a $12,000 tip. But when
Munce suggests that they would be better
off getting a fair hourly wage rather than
depending on tips, Klum balks. “I would
never do this without tips,” she says.restaurant owners say that the prob-
lem isn’t low wages, or even low tips—
it’s that the federal government should
enforce its requirement that waitresses
make at least the minimum wage after
tips. But the sheer number of restaurants
in America—an estimated 650,000 and
growing—makes that difficult.
“We could have spent all of our time
on tipped-minimum-wage enforcement
because the violations are so pervasive,”
says David Weil, who was the head of the
Wage and Hour Division in the Depart-
ment of Labor under President Obama.
Weil’s division did 5,000 investigations
into the restaurant sector in his time in the
department, but “we were just scratching
the surface,” he says.
The Trump Administration last year
revoked an Obama-era rule that would
have increased enforcement on restau-
rants that make tipped employees spend
more than 20% of their time on non-
tipped work.
The federal government does help
low-wage workers like waitresses in
other ways—with food stamps, subsi-
dized housing and health care. Some cit-
ies have raised their own tipped minimum
wages; others have opened wage-and-
hour enforcement offices, but investiga-
tions on behalf of tipped workers often
remain a low priority. In Philadelphia,
a branch of the Mayor’s Office of Labor
looks into complaints of wage theft. But
the city’s messaging suggests it devotes
more staff and resources to its long-
standing offices guaranteeing fair pay forVIEWPOINT
No, a recession is
not imminent
By Douglas Holtz-EakinRECENT ECONOMIC COMMENTARY has
tended to focus on White House tactics
and market volatility, but it is useful to
assess both the good and the bad of the
President’s economic stewardship.
There has been a meaningful
improvement in the pace of economic
growth, propelled mostly by business
investment that had seemed dead in the
water—and there is no doubt Trump’s
policies deserve credit. His U-turn on
regulation offered a dramatic reduction
in operating costs for businesses,
and the Tax Cuts and Jobs Act not only
lowered taxes but featured reforms to
business taxation that improved the
incentives to invest domestically and
keep headquarters in the U.S.
Yet the report card is hardly one
of straight A’s. The President’s trade
policies are the major obstacle to
growth and leave him with a mixed
record. The aluminum and steel tariffs
hurt consumers of metals far more
than they helped U.S. producers. The
negotiations to transform the North
American Free Trade Agreement into
the United States–Mexico–Canada
Agreement were costly and achieved
little—if the deal even gets ratified. The
periodic threats of tariffs on Mexico or
on imported autos or other goods and
trading partners are part of an environ-
ment that has suppressed trade and
diminished global growth, with negative
effects on the U.S. economy. And while
Trump correctly identified China as the
culprit, his punitive-tariffs approach
amounted to a $100 billion (annualized)
tax hike on Americans.
It’s true that the economy has grown
more slowly lately, but the obsession
with an imminent downturn stems from
too much focus on the daily ups and
downs of the market. The household
sector remains nearly three-quarters of
the U.S. economy and displays a healthy
mix of low unemployment and rising
wages. As long as that continues, we
will avoid a recession.Holtz-Eakin, a former director of the
Congressional Budget Office and adviser
to John McCain, is president of the
American Action Forum