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4.4 Million Americans Who Rely On Tips Could Be Impacted By A Drop In Cash Use

Photo by Sam Dan Truong on Unsplash

– 4.4 million workers who rely on physical tips to earn a living – two thirds of which are women – may be impacted by a recent drop in cash use, data shows.

– Global Payment Trends reveals the financial and societal impact of ceasing to use cash, which has been accelerated as a result of the Covid-19 pandemic. 

– The latest data shows that the use of cash as payment for online orders has dropped by 75% in the last year, now accounting for just 1% of all transactions. 

– 12.2 million workers in the US are in food service jobs that rely on tips to make ends meet, with the tipped minimum wage falling under $5 an hour in 36 states.

New research shows that up to 4.4 million service workers who rely on cash tips to earn a living could struggle to make ends meet after the pandemic due to digital exclusion.

Global Payment Trendscollates official data from payment reports and demographic statistics to reveal the potential societal repercussions of digital exclusivity, whereby coins, dollar bills and checks are replaced by eWallets, credit transfers and debit cards. 

Analysis shows that cash use fell by 21.9% across North America as a percentage of point-of-sale (POS) transactions on top of the online decline, while mobile wallets gained substantial popularity at the end of 2020 as a preferred contactless payment method.

A noticeable decline in cash use around the world appears to have been accelerated during the pandemic, as the latest data reveals cash usage as payment for online orders has dropped by 75% over the past year and now accounts for less than 1% of transactions. 

More Americans are turning to cards and mobile wallets in lieu of cash as more retailers and restaurants implement contactless payments during the pandemic, but this could leave businesses – and the service workers within them – who rely on cash tips behind.

This paired with the World Health Organization’s earlier concerns that the virus could be transmitted via dollar bills could leave millions of service workers without access to cash tips.

In fact, many Americans will look to avoid cash specifically when paying for food, with WHO stating that everyone “should wash their hands or use a hand sanitiser after handling money, especially if they are about to eat, or before handling food.”

Tipping practices vary across the US with service workers already struggling to make ends meet due to sporadic average tip amounts and frequency, but this widespread drop in cash use could make the likelihood of getting adequate tips decrease even further.

About the Author

New York Trend is a weekly news publication that focuses on issues and lifestyles of the African & Caribbean American communities throughout the New York metropolitan area and Nassau and Suffolk Counties of Long Island. It is a respected and well recognized news publication that has been in existence since 1989. Owner, Publisher and Executive Director, Dr. Teresa Taylor Williams has been at the helm of this award-winning publication since its inception. New York Trend continues to be the only black woman-owned, metropolitan newspaper in New York and Long island. New York Trend is the largest black-owned newspaper throughout Nassau and Suffolk counties.

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