Tipped workers in ‘$2.13 states’ experience an estimated 18.5% poverty rates

Many states require higher direct wage amounts for tipped employees than the federal requirement

Employers of "tipped employees" are required to pay them $2.13 per hour in direct wages if that amount, combined with the tips, at least equals the federal minimum wage of $7.25. If the employee's tips combined with the employer's direct wages of at least $2.13 per hour do not equal the federal minimum hourly wage, the employer has to make up the difference. However, this differs from state to state. This interactive map shows what tipped workers make per hour in every state.

Advocate estimate roughly 27% of Black service workers live below the poverty line

That’s significantly higher than the rate for restaurant workers overall. Approximately 37% of tipped workers are mothers, nearly half being single moms struggling with income volatility. This article includes more statistics about what the average tipped worker looks like and offers a peek inside their lives.

US tipped employees receive the 'subminimum wage' of $2.13, unchanged since 1991

Tipped employees (anyone who makes $30+ per month in tips) are not federally entitled to a traditional minimum wage. Customers determine their earnings. The National Restaurant Association believes that if restaurant owners are forced to pay above the subminimum wage for tipped workers, restaurants could be forced to close.

The Fair Labor Standards Act established a minimum wage—but it didn't cover everyone

A 1966 amendment created the “tip credit,” which allowed restaurants to pay below minimum wage if tips compensated the difference. However, this federal tipped minimum wage has remained frozen at $2.13 per hour since 1991, whereas the regular minimum wage has increased multiple times since then.

After emancipation, many slaves went from working for free to working for tips

In 1938, the New Deal established a minimum wage for one-fifth of the labor force, with many sectors—including service workers—not covered. Today, although the subminimum wage of $2.13 an hour is enforced, a large portion of those paychecks go to taxes like Social Security and Medicare.

When a state’s minimum wage differs from the federal's, the higher number wins out

Being that the federal government hasn’t raised the minimum wage in over 15 years, some states have taken matters in their own hands.

The federal minimum wage in the US has been $7.25 per hour since 2009

While some argue that raising it is essential for reducing poverty, others fear it could lead to inflation and job cuts. The complexity deepens with states setting their own minimum wages—some even below the federal rate—leading to a patchwork of wage laws.

Poverty rates by US state

As of 2022, 37.9 million people in the US were living in poverty. But those people aren't evenly distributed among the 50 states. Some states and regions of the country are more impoverished than others. For instance, US poverty rates are relatively higher in the South than they are in the North. See the state-by-state breakdown with this map.

The US had roughly 1.6 million minimum wage workers as of 2021

Typically, minimum wage workers are young. They’re not only more likely to be a woman than a man, but also more likely to be single than married.

Americans spend an average of nearly $500 per year on tipping at restaurants and bars

The habit runs contrary to economic rationality: Why pay more for a good or service you have already received when it isn’t mandatory? Researchers found that people tip, in part, to avoid the psychological pain of not fitting in.

At just over $1K, Mississippi has the lowest average weekly wage in the country

The mean weekly wage in the US is $1,459—more than a $1K difference from Washington, DC, where the average weekly wage is nearly $2.4K. Also among the highest earning states are Washington, Massachusetts, and California. Likewise, Mississippi, West Virginia, and Arkansas have the lowest weekly averages.

The US tips more service providers and leaves larger amounts than anywhere else globally

This map shows how other countries stack up to the US in terms of tipping norms, and could be helpful if you’re planning to budget for a trip abroad. It also indicates if tips are typically included in the bill in each country.

19th-century Americans discovered tipping in Europe

Tipping waiters was a custom in medieval Europe, where masters gave their serfs money for exceptional work. Wealthy Americans vacationing in Europe in the mid-1800s discovered the behavior and brought it back to the US.

Read why some states are considering imposing a flat tax rate that isn't adjusted by income

Wisconsin was the first US state to impose a state income tax, close in time to when the federal income tax went into effect. Many states followed suit, but nine states to this day still don't levy wage-related taxes.

The most common job in each US state in 2024

In 15 states, the most common job by number of employees is "fast food worker." Other most common jobs include cashiers and nurses.

Social Security trust funds are expected to be unable to pay full benefits by 2035

Most US workers have 6.2% of their gross paycheck taken out for Social Security. The government requires employers to match that 6.2% as well, for a total of 12.4%. This video dives into the specifics of how Social Security functions from a financial perspective.

Effects of pay transparency legislation

Research on pay transparency’s impacts has been limited given the short amount of time since American states began passing pay transparency legislation. However, this early study from researchers out of Brown and Harvard found that increasing pay transparency could have the potential to decrease worker bargaining power, resulting in lower average wages for employees. Read the research here.

27 states have right-to-work laws

That means employees in those states can choose whether or not to join a union at their workplace. Right-to-work laws also make it optional for employees in unionized workplaces to pay fees associated with union membership.

Nearly 1 in 4 Americans over age 65 is still working

While many of these Americans are often working part-time, the share varies significantly by US state. While roughly 29% of those over the age of 65 work in Vermont, only about 17% do the same in West Virginia.

Warren Buffett paid a lower effective tax rate than his secretary

While wages and salaries are taxed progressively at rates up to 37%, long-term investments are taxed at lower rates: 0%, 15%, or 20%. For wealthy individuals like Buffett, whose income mainly comes from investments, this means paying a lower effective tax rate than someone earning a salary.

The household income considered 'middle class' has increased significantly in the past 10 years

However, the increase has been larger in some states than others. In Texas, for instance, 2023's middle-class annual incomes ranged from $50,861 to $152,584, whereas 2013 middle-class annual incomes ranged from $34.6K to $103.8K.

Police officer salaries vary dramatically depending on where officers serve

Officer pay varies significantly across states and cities, with the highest salaries in California, New Jersey, and Washington. Factors such as local funding, cost of living, and collective bargaining agreements influence compensation.

Calculate how much of your tax dollars go to each federal program based on your income, filing status, and number of children

A guide to gig-worker taxes and the new Venmo rule

Tax laws are catching up to modern freelancers. Starting with income made in 2024, gig workers will have to report the earnings they receive via apps like Venmo and PayPal differently. The main change: workers will have to detail all app earnings above $5,000 (previously, it was $20,000), and that’ll eventually drop to $600. This guide explains what that’ll mean and answers common questions about the new rule.

The best restaurant tasting experiences in every state

Looking for the best tasting experiences that are a must-try in your home state or anywhere you may be traveling? Here are your options.

The federal government sent roughly $1.1T to state and local governments in 2024

Federal grants support a large portion of state and local budgets, funding Medicaid, infrastructure, education, and housing. In FY 2024, these transfers made up about 16% of total federal spending.

44% of Americans say they pray at least once a day—discover how your state's religiosity stacks up against the rest of the country.

The United States is one of only around two dozen countries with a fully federal system of government, in which power is divided between national and state governments.

The price of gas is a composite made up of several different factors, with the federal gas tax making up less than 20% of what drivers pay at the pump.

US consumers collectively owe more than $1T to credit card companies—almost as much as they owe in auto loans.

See this overview of the firework rules across all 50 states, ranging from a complete ban on non-professional fireworks in Massachusetts to states with more lax rules like Indiana.

Louisiana's 'Cancer Alley' is infamous for having some of the highest industrial pollution, toxic air emissions, and cancer risks in the US.

About 2,000 US babies are born annually without some portion of their limbs, potentially leading to a lifetime of pricey prosthetics.

View the ten deadliest tornadoes in US history.

Some coin denominations have ridges etched on their sides, partly to prevent counterfeiting, in a practice called 'reeding.'

Despite being favored by 87% of Americans, Congress does not have term limits.

See a ranking of the best (and worst) Federal Reserve Chairs since 1914 out of the 16 men and women who have held the office since.

Mark Twain spent decades feuding with the US Postal Service, convinced its costs and regulations were bureaucratic overreach.

In 2026, Finland was named the world's happiest country for the ninth consecutive year based on its wealth, social safety network, and high life expectancy, among other factors.

Art theft is the third-largest source of criminal revenues worldwide, thanks in part to the subjective nature of valuing a work of art.

The boiling temperature of water decreases with increasing elevation because the molecules need less energy to overcome the lower atmospheric pressure associated with thinner air.

Up to a million Girl Scouts sell about 200 million cookie boxes every spring, generating $800 million, largely because refusing a child is frowned upon

Hedge funds, the private investment firms that trade a wide swath of financial assets, make money by imposing steep fees on investors and from the fund's investment performance.

Lesser-known phobias include turophobia, or the fear of cheese, and nomophobia, the fear of being without your cell phone.

Domino's Pizza's 30-minute delivery guarantee was responsible for the chain's 1980s surge, but it was discontinued after the company was found liable for delivery driver accidents.

For centuries, it was common to sleep in two shifts: a few hours at the beginning of the night, and a longer period beginning around midnight

Fish populations in the Great Barrier Reef have increased after installing waterproof speakers on the ocean floor that played recordings of sounds from healthy coral reefs.

In 2009, the nation was gripped by the story of a missing young boy who was believed to be floating over Colorado in a homemade balloon, until it was revealed that he was at home the whole time.

Browse a detailed visual analysis of over 200,000 similes—comparisons that often use 'like' or 'as'—from popular fiction to see how frequently writers the same idiomatic expressions.

Hookworm infection, though risky, may help fight certain autoimmune conditions by tamping down the immune system's inflammatory response.