The question of whether to tip or not is deceptively complex, particularly in the United States. Here, the custom of adding a few dollars for service workers when settling the bill is not just prevalent, but often expected across various sectors, from grocery deliveries to coffee shops. While European visitors might struggle to understand the protocols, Americans are well-versed in this practice and often hold strong—usually negative—views on it. It's rare to encounter someone who appreciates the American tipping system; customers often resent the additional expense, while workers are frequently underpaid to begin with.
Nevertheless, the culture surrounding tipping and the debates it sparks serve mainly to divert attention from the underlying problem: the persistence of sub-minimum wages and the resulting reliance on consumer tips to compensate for the wages that employers evade paying.
For many workers, tips often constitute a substantial portion of their earnings. While certain roles, such as servers and bartenders in upscale restaurants, can earn well from tips, this dynamic creates a disparity where other workers, particularly back-of-house kitchen staff like dishwashers and cooks, who already face financial challenges, miss out on such opportunities and fall further behind. Additionally, workers dependent on tips may encounter obstacles imposed by employers seeking retribution; for instance, after dancers at North Hollywood's Star Garden strip club unionized, their employer implemented restrictive measures that severely limited their nightly earnings to just a few dollars.
The primary beneficiaries of this practice are those at the top: the owners of restaurants, hotels, delivery platforms, and other businesses who take home the majority of the profits. According to federal labor law, employers can legally pay tipped workers as little as $2.13 per hour, with the expectation that tips will bring their earnings up to at least the federal minimum wage of $7.25 per hour. However, this arrangement often falls short, and employers are supposed to make up the difference if tips don't meet the minimum wage threshold. Unfortunately, this doesn't always happen.
In 2017, the Economic Policy Institute reported that workers in the 10 most populous states were losing over $8 billion annually due to minimum wage violations, and this problem is worsening over time. Just in 2023, the Department of Labor's Wages and Hours Division recovered more than $29 million in back wages and damages specifically for restaurant workers.
The issue of tipping in the U.S. is not solely about financial matters; it is also intertwined with deeper issues of racism, sexism, and ableism. Civil rights advocate Michelle Alexander, author of The New Jim Crow, highlighted this connection in a 2021 New York Times op-ed, pointing out that the practice reflects historical injustices. She emphasized that a nation that once enslaved Black people and legally dehumanized them by counting them as three-fifths of a person now often pays their descendants less than a third of the minimum wage earned by others. This underscores how tipping practices can perpetuate and reflect systemic inequalities and historical injustices.
Michelle Alexander also highlighted that the tipped workforce, which is 70% female, is disproportionately composed of Black and brown women, and this disparity is not coincidental. When President Franklin D. Roosevelt signed the Fair Labor Standards Act of 1938, establishing the nation's first minimum wage, it notably excluded certain groups of workers, including domestic workers, agricultural workers, and restaurant workers—groups that were predominantly Black at that time in history.
Employers who resisted paying their Black workers fairly under the new law then encouraged customers to tip these workers instead, as a form of control. This practice continues today, where tipped workers are often compelled to tolerate mistreatment from customers and engage in additional emotional labor to avoid financial repercussions.
Workers appreciated the additional income from tips but harbored strong resentment towards the tipping system itself. When the Brotherhood of Sleeping Car Porters, the first Black-led labor union recognized by the American Federation of Labor, fought for higher wages in 1937 and retained their tips, it marked a significant victory. However, the Pullman maids—predominantly Black and Asian women who also relied on tips—were excluded from the union contract, highlighting ongoing disparities.
Even then, women were disproportionately burdened by the tipping system and continue to face its most adverse impacts. This historical context underscores how gender and racial inequalities have been perpetuated within the context of tipping practices.
The Fair Labor Standards Act of 1938 introduced the concept of subminimum wages, allowing employers to pay certain categories of workers less than the established minimum wage. As mentioned in the book "FIGHT LIKE HELL: The Untold History of American Labor," this included disabled workers "whose earning or productive capacity is impaired by age, physical or mental deficiency, or injury." This subminimum wage provision remains in effect and continues to perpetuate economic discrimination against disabled workers employed by corporations like Goodwill, Walmart, and others.
Frances Mablin, a young Black woman with cerebral palsy, expressed her discontent with this practice to Saru Jayaraman, author of "One Fair Wage: Ending Subminimum Pay in America," stating, "I think it’s horrible. People with disabilities should be treated as equal to other people. We should get the minimum wage." This highlights the ongoing struggle for equality and fair treatment of disabled workers in terms of wage compensation.
The emergence of the gig economy, which refers to the app-driven fragmentation of the modern workforce, has further compounded the issues associated with tipping. It's not just workers in the restaurant and hospitality sectors who rely on tips now; delivery drivers, rideshare app drivers, and other app-based workers working for companies like Uber, Doordash, Lyft, and others are also dependent on tips for their income. These companies often refuse to classify these workers as employees and have actively opposed proposed labor laws aimed at changing this classification.
As more workers are pushed out of stable employment and into the realm of independent contracting and gig work, tips will become increasingly vital to more individuals—highlighting the urgency of addressing these issues and implementing meaningful changes to ensure fair compensation and protections for workers in the evolving labor landscape.
It's evident that something is fundamentally flawed here, and one shouldn't need to be a labor historian to recognize that too many of America's most vulnerable workers are being exploited while their employers evade responsibility. Until our outdated labor laws are reformed to align with the realities of the modern workforce and profit-driven employers are no longer able to shift the burden onto customers, tipping will persist in depriving workers of fair wages.
While certain restaurants and cafes have explored tip-free models and cities like Chicago have spearheaded efforts to eliminate the subminimum wage for tipped workers, there is still a considerable journey ahead before American workers are liberated from substandard wages (and even further before we achieve the living wage we truly need!). One thing is certain: as activists, organizers, and legislators continue to push for this essential objective, we must ensure that workers are not left to bear the brunt of the change.