Labor: Ditch the Tip

By Sean Case

Tipping enables racist and sexist behavior and fuels poverty. Let’s get rid of it.

You’ve just finished your meal at a restaurant. The food was great, but the service wasn’t. Your distracted server took a while to get to your table and forgot to refill your water. You leave a tip, but only 5 percent. You’re sending a message, right? “Do better next time and you’ll be rewarded.” What your server is thinking is, “What an asshole,” before moving to the next table and immediately forgetting about you.

There’s a popular notion that tipping is the financial marker of some kind of social contract. A generous tip shows gratitude for stellar service. A stiff lets the tipped worker know they need to step up their game. Any service industry veteran can tell you this is bullshit.

Poverty by Design

The origins of tipping in the US begin to erode the facade of tipping’s civility. In the wake of the abolition of slavery in the South, tipping was used as a way for racist employers to avoid paying a wage to the many Black workers who found employment in low-paying service jobs. Instead, workers were forced to rely on the “generosity” of the customer. (A federal minimum wage wouldn’t be introduced in the US until the 1930s).

Today, tipped workers experience poverty at more than twice the rate of non-tipped workers. The federal minimum wage for tipped workers ($2.13 per hour) hasn’t been raised since 1991. While it used to be tied to the federal non-tipped minimum ($7.25 per hour) and was required to be at least 50 percent of that wage, the two were decoupled in 1996 by Democratic president Bill Clinton at the insistence of the National Restaurant Association (NRA), a powerful lobbying group representing food industry bosses. Though 30 states offer higher minimum wages than the federal minimum, only eight of those states have done away with a sub-minimum wage for tipped workers.

In theory, employers are legally obligated to ensure that their tipped workers are making at least the non-tipped minimum after tips are accounted for. In reality, tipped workers are routinely paid below that threshold. Laws mandating that workers’ take-home pay meet the non-tipped minimum are difficult to enforce in such an atomized industry. The enforcement that does happen is telling: over 80 percent of restaurants investigated for failure to fully pay tipped workers were found to have committed a wage or hour violation of some kind. Those violations often involve employers mishandling tips earned by their workers.

When your livelihood depends on tips, you’re left with a choice: stick up for yourself or put on a smile and endure degradation in the hopes of making rent.

In practice, it’s generally up to workers themselves to monitor whether or not they’re being paid correctly. If they find they aren’t, they must weigh the costs of confronting their boss and fighting for their full wage, a move that can leave them open to firing and other forms of retaliation. This is especially daunting for undocumented workers, who are disproportionately represented among the ranks of the service industry.

Economic degradation isn’t the only effect of a two-tiered wage system. Tipped work is also a breeding ground for racist and sexist attitudes and behavior. 40 percent of tipped workers are people of color. Women make up two-thirds of the tipped workforce. Data show that workers of color – especially Black workers – in the service industry are tipped less than their white counterparts. Over 75 percent of tipped workers report experiencing some form of sexual harassment on the job – by far the highest of any industry.

This isn’t incidental. When your livelihood depends on tips, you’re left with a choice: stick up for yourself or put on a smile and endure degradation in the hopes of making rent that month.

Good for the Boss, Bad for the Worker

The two-tiered wage system is a boon to restaurant owners, particularly owners of large restaurant groups and chains. Pay your workers starvation wages and have the public (barely) subsidize the rest? What a dream! Rather than producing anger at the boss for not paying them more, tipping often leads restaurant workers to misdirect their anger toward customers instead. As the cost of living rises, so does tension between the tipped worker and the customer, as fundamentally the worker is relying on the customer to pay a substantial portion of their wage. Meanwhile, the boss keeps paying the same low hourly rate. It’s no wonder that the NRA spends upwards of $3 million a year on lobbying and campaign contributions to keep such practices in place.

A common objection to doing away with the sub-minimum wage is that the system actually works for some service industry workers. In particular, people tend to point to servers and bartenders in high-end restaurants and urban centers. Indeed, people in those positions do well for themselves compared to others in the industry. But the relative benefit those workers receive is financially overstated and undercut by the emotional and physical exhaustion of their position. Servers often jockey for the busiest (and most difficult) shifts knowing that they’ll take home more tips at the end of the day. They’ll put up with rudeness and harassment from customers and unreasonable requests from management to maintain their position.

Of course, servers in high-end restaurants are a small minority of tipped workers. But the above argument does highlight a major problem in the restaurant industry, one which is often exploited by industry groups: the front-of-house back-of-house divide. While front-of-house workers like servers generally receive the lowest hourly wage in their workplaces, they often wind up taking home more money at the end of the day than their back-of-house coworkers. This dynamic frequently undermines solidarity among restaurant workers by seeding resentment among cooks and dishwashers toward their front-of-house coworkers.

Fight Back to Ax the Sub-Minimum Wage

But what all service industry workers have in common (tipped or non-tipped) binds them together. Chaotic scheduling; grueling pacing; a lack of healthcare or paid time off; and wage theft are all endemic across the industry. Because of these conditions, burnout, injury, and substance abuse are common among restaurant workers.

Tipped workers (and service industry workers in general) need to fight back to bring an end to the sub-minimum wage and sweep tipping into the dustbin of history. Some progressive groups focused on the service industry are doing admirable work to bring more attention to the plight of tipped workers and fight for legislative changes. Restaurant Opportunities Centers United’s Restaurant Workers Bill of Rights campaign offers a useful framework for what to fight for – better wages, paid leave, consistent scheduling, improved workplace safety, and universal healthcare. One Fair Wage pushes for the elimination of the sub-minimum wage in favor of a flat living wage for all working people, regardless of whether they may receive tips.

But work by non-profit advocacy groups is at best slow and at worst a dead end. Workers themselves need to lead the charge for change. That begins with organizing with their coworkers. By banding together in solidarity, service industry workers (tipped and non-tipped) can win better workplaces and lives. Hard-fought and won union campaigns from Starbucks to your local diner can win demands in individual workplaces and shift the needle more broadly. An organized and energized service industry sector can put its weight behind demands like those in the Restaurant Workers Bill of Rights and actually win them.

Tipped workers need to fight back to bring an end to the sub-minimum wage.

Tipping won’t disappear overnight. But if workers fight to end the sub-minimum wage and raise the federal minimum wage ($15 is a good start, $19 is better), we’ll be a long way toward realizing that goal. Service workers can organize around the demand for an across-the-industry raise for all workers, regardless of position, and finally get to a place where we can pronounce tipping dead.