Tipping is Corrupt: Why We Should Abolish the Subminimum Wage

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Only seven U.S. states require employers to pay tipped employees full state minimum wage. Minnesota is one of them. Now it is time for 43 other U.S. states to follow Minnesota’s lead and enact legislation to abolish wage inequality. Without these necessary laws, the U.S. will continue to perpetuate a system of tipping that not only allows the restaurant industry to thrive while underpaying its workers, but enforces racist and sexist standards that began in slavery-era America. With extreme economic and social consequences resulting from the tipping system, voters can no longer stand idly by while customers and employees are robbed of their hard earned dollars.

The cost of eating at restaurants has continued to climb over the years. As food prices go up, so does the amount a customer is expected to tip. The only number that isn’t increasing is waiters’ wages. “The restaurant industry is the second largest and fastest growing industry, and yet the Department of Labor reports every year that seven of the 10 lowest paying jobs are restaurant jobs,” said Saru Jayaraman, Director of the Food Labor Research Center at UC Berkeley, in an interview with Roberto Ferdman of The Washington Post.

The reason for this discrepancy is a wage law that originated under the New Deal in 1938. The law said that a person can earn minimum wage either through wages or through tips, giving tipped workers “the right to a zero dollar minimum wage,” Jayaraman said. The law was reformed in 1966, but only raised the subminimum wage for tipped workers from $0/hour to $2.13/hour, essentially making little impact on the corrupt tipping system that plagues the U.S. today.

Expecting servers to compensate for their lower wages by making more tips is immoral, as this practice often causes employees to tolerate mistreatment from customers in an attempt to make a living. “While restaurants employ about seven percent of American women, nearly 37 percent of all sexual harassment claims to the Equal Employment Opportunity Commission come from restaurants,” Jayaraman said.

Restaurant Opportunities Centers United (ROC) reports that women who work in the restaurant industry face five times the harassment than the general female workforce. If increased sexual harassment in the restaurant industry was not bad enough, the tipping system also widens the gender pay gap and disproportionately affects African-American women, who earn only 60 percent of what male servers are paid, costing those women more than $400,000 over a lifetime, according to ROC. By allowing a subminimum wage in the U.S., Americans have prolonged the systematic mistreatment of women and minorities and wasted their own tip money in the process. It comes as no surprise that the system of tipping has caused such discrimination in the workforce, as the practice itself is entrenched in a history of racial and gender inequality. For her book Forked: A New Standard for American Dining, Jayaraman researched the history of tipping, and found that the practice began in the mid-1800s with wealthy Americans tipping to show their knowledge of European customs after traveling abroad. Towards the end of the 19th-century, an anti-tipping movement emerged to fight for fair wages for workers. Restaurant owners resisted the movement’s call for justice because “many of their workers were African-American, in many cases freed slaves whom these employers resented having to pay at all,” Jayaraman said. “One writer of the period noted that he could never feel comfortable tipping a white person, since the practice should be reserved for ‘Negroes’.” Tipping in those days was meant to showcase white supremacy and degrade African-American workers. Although the connotation of tipping has changed, the wage injustice behind its purpose remains the same.

Instead of placing the responsibility of paying employees on customers, the responsibility should be shifted back to the establishments. To accomplish this goal, seven U.S. states, including Minnesota, have enacted laws to ensure tipped workers are paid the full state minimum wage before tips. These states, according to Jayaraman, also have higher sales per capita and higher restaurant job growth. This law should become federally mandated to eliminate the subminimum wage and promote wage equality in America.

In a survey of 75 Macalester students, 43 reported tipping between 15 to 20 percent at sit-down restaurants, 17 reported tipping between 10 and 15 percent, 13 reported tipping over 20 percent, while only two students reported tipping lower than 10 percent. This data shows that most of the student body are avid tippers, compared to Minnesota’s average restaurant tip—15.7 percent. However, of the 75 Macalester students surveyed, 73 percent believed the tipping system is unfair and 96 percent only tip to compensate for unfair wages.

Despite the fact that servers don’t get paid enough in most states, Minnesota does provide fair wages for servers, taking the pressure off of customers to support them. Since most Macalester students believe the tipping system is unjust but feel obligated to participate in it anyway, a conscious effort should be made to practice actions that support the working class while also combating corruption in the restaurant industry.

There are more constructive ways to fight for wage equality than tipping, especially when workers in Minnesota are already being paid fair wages. For example, supporting legislation to raise the federal minimum wage to $15/hour and abolishing exemptions to this law for tipped positions would make a much larger difference for the working class. Instead of continuing to support a corrupt system through escalating tipping practices, donate time to making tangible changes in the system. With a concerted effort, Americans can achieve a national change towards wage equality and use tipping as it should be used—to recognize good service.