One of the things that new visitors to the United States learn—but often don’t understand—is that they are expected to tip nearly every service worker they encounter. The most obvious tipping expectation is at restaurants and bars, where they must gift an additional 18-25 percent of their total bill to their waitstaff or bartender.
Taxi and rideshare drivers also expect tips, as do hotel bellhops and cleaning staff, as well as hair stylists, and even babysitters. Delivery drivers, in the age of online shopping, expect tips—but only those delivering food via such services as DoorDash, and not, say, your Amazon package deliverer, and certainly not your local postal worker bringing you your daily dose of junk mail.
Forget those who are new to the U.S.—the expectations about when to tip and how much to tip are bewildering even for those of us who have lived here our whole lives. There are detailed guides now for the confused consumer, such as New York magazine’s explaining-and-shaming approach to tipping etiquette after the COVID-19 pandemic changed the rules of “polite society,” while exhorting readers to accept the status quo: “It’s just the rules; don’t complain.” Real Simple magazine recently issued a primer that billed itself as the “Ultimate Guide” for the confused tipper. “Tipping used to be about showing appreciation for good service,” lifestyle writer Julie Vadnal says in the Real Simple article. “[B]ut as the minimum wage has plateaued (the federal minimum wage has been $7.25 since 2009), workers have come to depend on it.” The federal government’s baseline wage for tipped workers is an unimaginably low $2.13 an hour.
What we need is an “Ultimate Guide” on how to make our economy fairer so that ordinary people are not subsidizing the salaries of low-wage workers—because that’s ultimately what tipping is. How—and why—do we tolerate it?
Think about the explicit requests for tips that are cropping up at walk-up cafes where the cashier taking your coffee order offers you a digital tablet to complete your cashless transaction and where you must choose a tip amount of anything between 10 and 22 percent in view of the worker. Sometimes the machine suggests even explicit dollar amounts—a $2 tip on a $4 coffee?—that obscures the tip percentage. If the worker you interacted with has been rude or cold, you can choose a low tip or no tip at all in retaliation. If they have been kind and you still tip frugally, you are the rude, cold one.
This quick interaction between customer and server is a veritable minefield of values, placing the onus of paying a worker directly on the person being served rather than on the worker’s employer.
It’s a sly calculation on the part of business owners to ensure compliant workers while gouging customers: A worker’s take-home pay could be diminished simply if they had a bad day and didn’t feel like smiling, while at the same time, the customer feels obligated to pay for their product, and then some. Tipping is just another way for businesses to pass their costs on to customers.
Worse, it encourages sexism and sexual harassment, especially for women workers who often lose out on tips if they snub sexual advances by male customers. According to One Fair Wage, nearly 7 out of 10 tipped workers are women.
The Economic Policy Institute (EPI) lays the blame for our national tipping culture on the 1966 amendments creating a so-called “tip credit” to the Fair Labor Standards Act. According to EPI, “The creation of the tip credit—the difference, paid for by customers’ tips, between the regular minimum wage and the sub-wage for tipped workers—fundamentally changed the practice of tipping.”
The National Restaurant Association, which is the major lobbying arm of an industry that disproportionately relies on tipped workers, has for years pressured lawmakers to keep the tip credit in place and enable the continued underpaying of workers. In a press release in November 2022, it denounced the successful Washington, D.C., vote to eliminate the tipped wage, claiming bizarrely that tipping is good for both workers and customers. The subtitle of the press release reads: “Current tipping system increases earning potential for tipped workers and allows operators to staff at levels needed for exceptional hospitality.”
According to a National Restaurant Association executive, the vote to eliminate tipped wages means that “some operators will reduce their workforce.” It’s the same logic that fiscal conservatives use to counter an increase in the federal minimum wage: raising salaries will mean people will be fired because employers won’t be able to afford to pay the higher wages. But EPI points out that “[p]aying tipped workers the regular minimum wage has had no discernable effect on leisure and hospitality employment growth in the seven states where tipped workers receive the full regular minimum wage.”
The lobbyist also condescendingly claims that “[t]he tipped income system often comes under fire because there is widespread misunderstanding about how it works.” Apparently, the rest of us ignoramuses don’t get that “[e]very tipped restaurant employee earns at least their state’s minimum wage” (emphasis in original) and that “[t]his amount is paid partly by the operator and partly by tips.”
In truth, employers, especially corporate chains, don’t always bother ensuring that their workers make at least the full minimum wage. Outback Steakhouse’s workers, for example, are suing their boss over this very issue. And, if it were true that tipped workers actually take home what is owed to them, there wouldn’t be a stark discrepancy in poverty levels between tipped workers and non-tipped workers. EPI points out that “in the states where tipped workers are paid the federal tipped minimum wage of $2.13 per hour… 18.5 percent of waiters, waitresses, and bartenders are in poverty.” But, “in the states where they are paid the regular minimum wage before tips… the poverty rate for waitstaff and bartenders is only 11.1 percent.”
Not only is the National Restaurant Association obscuring the fact that subminimum wages are beneficial to employer profit margins, but it has even deceived workers into subsidizing the cost of the lobbying that keeps wages suppressed. The New York Times recently revealed how the National Restaurant Association runs a company called ServSafe, widely used by new workers for mandatory training on things like food safety. But ServSafe is also the association’s fundraising arm.
In other words, workers are inadvertently paying to ensure their wages remain low. And the lobbying has been wildly successful.
For example, when Washington, D.C., voters passed Initiative 77 in 2018 to raise the tipped wage, the city council repealed it, instead passing a law raising awareness of the rights of tipped workers. But lawmakers never funded the law. Then, in November 2022, voters passed a similar measure, Initiative 82, with the support of nearly three-quarters of all voters (this was the vote that prompted the association’s aforementioned defensive press release). The D.C. city council has again tried to thwart the measure, delaying its implementation by a few months. Activists for 82 say they believe the restaurant industry’s lobbying has played a role.
Now, some New York lawmakers are getting ready to propose a similar bill that would phase out the subminimum wage for tipped workers in their state. And, there is strong public will to do so. A survey by Data for Progress found robust bipartisan support among likely voters to do away with a system requiring workers to depend on tips. The progressive organization One Fair Wage has several campaigns—including in New York, Washington, D.C., Michigan, Maine, Massachusetts, and Illinois—to eliminate the tipped wage system.
There are nations in the world where tipping is not only unusual, but considered downright rude. For example, according to one social media influencer of Japanese descent, tipping in Japan is frowned upon because it’s seen as “petty,” and akin to an insult. TikTok user Cyber Bunny compares a customer tipping a server in Japan to a parent giving a child an allowance.
Such a dynamic can develop here in the U.S. too, if we had a culture and set of laws that respected worker dignity. After all, money is power, and for a customer to wield power over a worker in such a direct manner ought to be considered unthinkable. Wages are not allowances, and workers are not children.
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