If passed, Proposition 138 would allow restaurants and bars to reduce the wages of tipped employees by 25% below the state minimum wage, deepening the economic struggles workers face.
Arizona law permits employers to pay tipped workers up to $3 less per hour than the state minimum wage ($14.35 in 2024) as long as tips bring their earnings to at least the minimum wage. Prop 138 would further reduce this wage gap, allowing employers to pay tipped workers 25% less than the minimum wage, provided their combined wages and tips exceed the minimum wage by at least $2 per hour. (The proposition provides no additional funding for information or enforcement, so most servers will just see their checks get smaller with little ability to determine whether the complex formula for allowing a 25% reduction instead of a $3 reduction has been met.)
This measure would worsen the financial security of Arizona's tipped workers, who already face difficulty earning a living wage. Prop 138 creates a more convoluted tiered wage system, further reducing base pay and forcing workers to rely even more on unpredictable tips.
Tipped workers in Arizona already earn $3 less than non-tipped workers. By lowering the tipped minimum wage further, Prop 138 would widen this wage gap and heighten poverty rates among tipped workers. Data shows that in states with larger wage gaps between tipped and non-tipped employees, poverty rates among tipped workers are significantly higher. In Arizona, tipped workers experience a poverty rate of 9.8%, compared to 5.5% for non-tipped workers. For women in tipped positions, the poverty rate is even higher at 10.8%. Prop 138 would exacerbate these disparities, especially for women, who make up nearly 70% of tipped workers.
Prop 138 disproportionately harms women and people of color, who are overrepresented in tipped positions. These workers already face economic vulnerabilities, and the proposition would leave their earnings more reliant on customer discretion, often influenced by bias, rather than guaranteed fair wages.
Prop 138 is backed by the restaurant industry, which has a long history of opposing fair pay and benefits for its workers, including efforts to block the 2016 voter-approved minimum wage increase. This proposition serves their interests by cutting labor costs at the expense of workers' livelihoods, further entrenching systemic inequities.
All workers deserve a living wage, especially as the cost of living continues to rise. Prop 138 would push Arizona’s tipped workers further into financial instability, deepening poverty and widening the wage gap between tipped and non-tipped workers. Employment laws should protect workers, not corporate profits.
Vote No on Prop 138 and stand with Arizona’s tipped workers.
If passed, Proposition 138 would allow restaurants and bars to reduce the wages of tipped employees by 25% below the state minimum wage, deepening the economic struggles workers face.
Arizona law permits employers to pay tipped workers up to $3 less per hour than the state minimum wage ($14.35 in 2024) as long as tips bring their earnings to at least the minimum wage. Prop 138 would further reduce this wage gap, allowing employers to pay tipped workers 25% less than the minimum wage, provided their combined wages and tips exceed the minimum wage by at least $2 per hour. (The proposition provides no additional funding for information or enforcement, so most servers will just see their checks get smaller with little ability to determine whether the complex formula for allowing a 25% reduction instead of a $3 reduction has been met.)
This measure would worsen the financial security of Arizona's tipped workers, who already face difficulty earning a living wage. Prop 138 creates a more convoluted tiered wage system, further reducing base pay and forcing workers to rely even more on unpredictable tips.
Tipped workers in Arizona already earn $3 less than non-tipped workers. By lowering the tipped minimum wage further, Prop 138 would widen this wage gap and heighten poverty rates among tipped workers. Data shows that in states with larger wage gaps between tipped and non-tipped employees, poverty rates among tipped workers are significantly higher. In Arizona, tipped workers experience a poverty rate of 9.8%, compared to 5.5% for non-tipped workers. For women in tipped positions, the poverty rate is even higher at 10.8%. Prop 138 would exacerbate these disparities, especially for women, who make up nearly 70% of tipped workers.
Prop 138 disproportionately harms women and people of color, who are overrepresented in tipped positions. These workers already face economic vulnerabilities, and the proposition would leave their earnings more reliant on customer discretion, often influenced by bias, rather than guaranteed fair wages.
Prop 138 is backed by the restaurant industry, which has a long history of opposing fair pay and benefits for its workers, including efforts to block the 2016 voter-approved minimum wage increase. This proposition serves their interests by cutting labor costs at the expense of workers' livelihoods, further entrenching systemic inequities.
All workers deserve a living wage, especially as the cost of living continues to rise. Prop 138 would push Arizona’s tipped workers further into financial instability, deepening poverty and widening the wage gap between tipped and non-tipped workers. Employment laws should protect workers, not corporate profits.
Vote No on Prop 138 and stand with Arizona’s tipped workers.