Image of a display requesting a tip.
In a not-so-distant memory, tipping was largely confined to restaurants and bellhops, with the largest tips going to the people customers felt went above and beyond in providing service. Recently, Americans have noticed that people seem to be tipping now more than ever. Tipping a waiter after good service at a restaurant or a bellhop after they helped hail you a taxi used to be considered the gratuitous thing to do, a matter of etiquette. Now, digital screens prompt people to tip after ordering a simple coffee, at fast food restaurants, or take out in a phenomenon that has come to be known as tipflation–making tipping feel more like a requirement than a nice gesture.
Tipping is a relic of feudal Europe, a society known to be deeply unequal, that eventually made its way to America. At first, tipping was not widely accepted, as it was seen as a condescending and classist practice that went against American ideas of freedom. However, the end of slavery would soon cause tipping to spread rapidly. After the civil war millions of formerly enslaved people entered the workforce. Employers in the service industry hired them for little or no wages and would encourage customers to tip them so they could make a living. Tip money was no longer treated as a bonus, but instead as the entire, or at least a large chunk, of service workers’ base pay.
Illustration of two white customers being served by a black waiter in a dining car.
Fast forwarding to the 20th century, employers cannot quite get away with paying their employees nothing, but they can get pretty close. When the Fair Labor and Standards Act was passed in 1938 to establish a federal minimum wage, it excluded several service industries, such as the hotel and restaurant business. These industries were significant employers for Black Americans, continuing the legacy of tipping as a way to satiate the needs of underpaid black Americans.
In 1966, the restaurant industry was added to the Fair Labor Standards Act, which established a minimum wage. However, differing from other industries, restaurants were able to pay their workers less than minimum wage under the condition that customers were tipping enough that their employees’ wages met the minimum wage, effectively taking some of the responsibility for a livable wage away from the employer and placing it on the customer.
Today the federal minimum wage for tipped employees is only $2.13 per hour, meaning that many service workers rely on tips for the majority of their pay. Even states such as Delaware and Rhode Island, which have raised their minimum wage to $15, still enforce a minimum wage of less than $4 for employees who receive tips.
Image of a demonstration for restaurant workers in Washington D.C.
Tipped minimum wages might not seem so bad, after all, they should be getting paid the same as those who received the standard minimum wage. However, tipped minimum wage policies are difficult to enforce. They usually require that workers keep track of their hours, calculate their tips in relation, and confront their employer themselves if something seems amiss. This has proven to be a very ineffective practice. A study found that in the ten most populous states, a total of $8 billion is robbed of employees as a result of minimum wage theft. This disproportionately impacts people of color, who make up a large portion of the service industry, yet are often tipped less than their white counterparts.
Relying on tips forces workers to depend on the whims of their customers to make a livable wage. In states that use the federal minimum wage, tipped workers experience higher poverty rates than in states that enforce a higher minimum wage for tipped workers. Relying on tips can also put workers in danger, forcing them to endure sexual harassment from customers in fear that they might not receive a tip if they cause a scene.
Tipping in America has evolved far from its origins, but remains a system that perpetuates economic inequality and shifts the burden of fair wages from employers to customers. While tipping may have once seemed like a harmless gesture of gratitude mere decades ago, it has resulted in the systemic underpayment of service workers.
It is time to rethink tipping culture and advocate for structural change. Policies must ensure that all workers, including those in tipped industries, receive fair, livable wages from their employers.
As consumers, we can support these efforts by pressuring policymakers to enact wage reforms and by choosing to patronize businesses that pay their employees fairly. Employers must take responsibility for providing equitable pay, and tipping should return to being a gratuity—not a substitute for a livable wage.
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