In April 1991, the federal minimum wage was raised from $3.80 to $4.25 per hour. The federal tipped minimum wage, which had traditionally been set to half the normal minimum wage, was raised to $2.13. The tipped minimum wage sets a wage floor for all workers who receive tips as part of their compensation; most of these workers are in the food service industry, which employs 60 percent of the nation’s tipped workers.
However, while the federal minimum wage has been increased five times since 1991, the federal tipped minimum wage hasn’t been raised even once. Had the federal tipped minimum wage risen in step with the minimum wage for non-tipped workers, it would be over 70 percent higher today:
Proponents of a higher minimum wage have argued that while the minimum wage has risen in nominal terms, it hasn’t increased in line with average wages, productivity, or even prices. These complaints hold true to an even greater degree for the tipped minimum wage, which hasn’t been raised even once for over twenty-four years.