Time - International (2019-09-02)

Time Sept. 2–9, 2019

AfTer An eighT-hour shifT on her

feet, shuffling between a stuffy kitchen

and the red vinyl booths of Broad Street

Diner, Christina Munce is at a standstill

in traffic. Still wearing the red polo shirt

and black pants required for work at the

diner in South Philadelphia, she’s argu-

ing with her colleague Donna Klum. They

carpool most days to spare Klum a two-

hour commute on public transportation

that involves three transfers.

“It’s not O.K. for people not to tip,”

Munce says from the driver’s seat, the

Philly skyline passing by. Klum believes

that bad karma will catch up with non-

tippers, but Munce, a single mother who

relies on tips to live, doesn’t care much

about their fate. “I have to make sure that

my daughter has a roof over her head,”

she says. The desire for cash over karma

is understandable: Munce’s base pay is

$2.83 an hour.

The decade-long economic expan-

sion has been a boon to those at the top

of the economic ladder. But it left mil-

lions of workers behind, particularly the

4.4 million workers who rely on tips to

earn a living, fully two-thirds of them

women. Even as wages have crept up—if

slowly—in other sectors of the economy,

the minimum wage for waitresses and

other tipped workers hasn’t budged since

1991. Indeed, there is an entirely separate
      federal minimum wage for those who live
      on tips. It varies by state from as low as
      $2.13 (the federal tipped minimum wage)
      in 17 states including Texas, Nebraska
      and Virginia, up to $9.35 in Hawaii. In 36
      states, the tipped minimum wage is under
      $5 an hour. Legally, employers are sup-
      posed to make up the difference when
      tips don’t get servers to the minimum
      wage, but some restaurants don’t track
      this closely and the law is rarely enforced.
      Waitresses are emblematic of the
      type of job expected to grow most in the
      American economy in the next decade—
      low-wage service work with no guar-
      anteed hours or income. Though high-
      paying service jobs have been growing
      quickly in recent months, middle-
      wage jobs are growing more slowly and
      could decline sharply in the event of a

recession, says Mark Zandi, chief econo-

mist with Moody’s Analytics. Those who

lose their jobs in a recession usually move

down, not up, the pay scale. Jobs like per-

sonal-care aide (median annual wage

$24,020), food-prep worker ($21,250)

and waitstaff ($21,780) are among the

fastest- growing occupations in America,

according to the Bureau of Labor Sta-

tistics (BLS). They have much in com-

mon with the burgeoning gig economy,

in which people turn to apps in the hope

of getting shifts delivering food, driving

passengers and cleaning houses.

This “sometimes” work has put the

stress of earning a weekly wage, paying

for health insurance and saving for retire-

ment squarely on the shoulders of work-

ers. Munce is on food stamps and Med-

icaid, and many days doesn’t make it to

the federal minimum wage of $7.25 an

hour. One of her recent paychecks read

$58.67 for 49 hours worked. Add in the

$245 she took home in tips, and she made

about $6.20 an hour. She wants to work

40-hour weeks, but some days the diner

is slow and she gets sent home early. “I

don’t drink, I don’t smoke, all I do is save

money,” Munce says.

But these employers are hiring, and

these jobs are becoming a fallback for

people whose former jobs placed them

solidly in the middle class. Food- service

jobs have grown nearly 50% over the past

two decades, to 12.2 million, according

to the BLS. They are on track to surpass

America’s manufacturing workforce,

which, at 12.8 million, has fallen 25% over

the same period.

Markets have swung wildly in recent

weeks on fears of a possible recession,

which could speed up the nation’s con-

tinuing shift from one that makes things

to one that serves things. The last reces-

sion, from 2007 to 2009, took a sharp toll

on industries that make things in Amer-

ica, with construction and manufactur-

ing each losing 1.9 million jobs in the five

years after the recession began. In con-

trast, industries like health care and food

service added hundreds of thousands of

jobs in the same period.

If another recession starts, “the pri-

mary hit is going to generally be in sec-

tors that don’t involve providing basic ser-

vices to other people,” says Jacob Vigdor,

an economist at the University of Wash-

ington. On Aug. 20, President Trump,

Economy

This story was produced in partnership
with The Fuller Project, a nonprofit
newsroom that reports on issues
impacting women

Middle

class

Upper

class

Lower

class

1971 1981 1991 2001 2011 2016

PERCENT OF ADULTS

IN EACH INCOME TIER

19 %

14 %

61 %

25 %^29 %

52 %

10th

percentile

50th

percentile

90th

percentile

LOW EARNERS HIGH EARNERS

HOURLY WAGES

(IN 2018 DOLLARS)

1979

2018

$ 53

$ 11

$ 11

$ 21

$ 22

$ 38

Workers at the

tipping point

THE INCOME GAP

HAS WIDENED OVER

1 DECADES

The middle class has shifted

into growing populations of

rich and poor

Lower-income earners have

faced stagnant wages while

top earners have enjoyed

wage gains

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