As a person who’s worked four minimum wage jobs since they were 16, it’s suffice to say that I’m quite familiar with tipping culture. Growing up and working in a college town doesn’t exactly get you your fair share of tips in proportion to the necessary work you have to deliver, even in regards to the adults you serve.
But since I recognize the struggle, I still try to tip at least 15% as a broke college student myself. I’m lucky to have had a support system that could save enough so that I’m not drowning in college debt when I graduate; so although tips are nice, they’re not essential. However, I know this is not the case for everyone, especially those who are paid subminimum.
For those who work in the restaurant industry full time, minimum wage isn’t sufficient for living costs in the United States, which on the federal level has been $7.25 for nonexempt workers since 2009. That wage results in an annual income of approximately $15,000, which, due to all the inflation induced by the 2008 Recession and COVID-19 pandemic, is considered to be below the poverty line.
Only eight states set their minimum wage at $15 and up, the target goal for many minimum wage protests. Yet, as early as 2021, a US News report discovered families who rely on a single income could only afford half of the average basic yearly expenses. Not to mention, the fact that one type of minimum wage exempted workers are tipped ones with the direct wage received from businesses set at $2.13 since 1991.
Now, this is because tipping has become such a common American practice, but it makes these workers more susceptible to poverty because of the volatile nature of tipping culture. A 2011 Economic Policy Institute study found tipped workers are more than twice as likely to fall below the federal poverty line, and servers almost three times as likely.
It hasn’t always been this way though, as the practice of tipping originates from European countries. Americans initially didn’t want to participate because tips established a semi-economic caste system within the restaurant industry that reminded Americans of archaic feudalism. Yet, tipping was popularized after the Civil War as the payment method for Black people, so restaurant owners didn’t have to directly pay them. The idea of tipped wages, predominantly earned by Black women at the time, was then solidified into American law as part of FDR’s New Deal.
This idea that tipped wages can compensate for a stable wage relieves employers of part of their financial burdens. It remains a prevalent approach because of how it allows menu prices to be kept down, maintaining the affordable dining experience facade. Nevertheless, tips continue to perpetuate racially based economic disparities to this day.
Black people only compose 13.7% of the US population, which supports a 2023 Camion Associates Study that found Black people are overrepresented among minimum wage workers. They make up 14.9% being hourly workers (1.2 point difference) and 17.5% being minimum wage ones (3.8 point difference) as opposed to the 75.3% of white people in the US that represent 75.4% of hourly workers (0.1 point difference) and 72.6% of minimum wage workers (-2.7 point difference).
They’re also the most likely racial group to be hourly workers that get paid minimum wage at 1.5%. Not to mention, Black women disproportionately represent 10.8% of the 17.5% Black population that work a minimum wage job, even though they’re just 7.7% of the US population (3.1 point difference), also known as the original group of people most impacted by the establishment of tips.
Additionally, a 2008 Journal of Applied Social Psychology study explored the effects of server race and consumer race on projected tip outcomes. They detected an overall trend of both White and Black customers tipping Black servers less. The common myth about if a worker tries to supply exemplary service, they’ll earn more of a tip was also contradicted in Cornell Professor Michael Lynn’s research that found a weak correlation between tip size and service quality.
In fact, customers who receive great service only tip about 1% more. Thus, setting the minimum wage at an unlivable standard, and having tipped professions in general subjugates Black people to a position where they’re more likely to fall below the poverty line.
In his article about why tipping should end, freelance food reporter Corey Mintz mentions conversations he had with restaurant owners at a hospitality conference. He claims the number one challenge reported was attracting, hiring and retaining good staff, something he also discovered was broadly alleviated when restaurants eliminated their tips. These types of restaurants typically offer better benefits and wages, distribute consistent hours and provide opportunities for professional growth – all huge attractions for employees.
So, maybe more restaurants and food chains should consider abolishing tips in favor of a dependable wage, or at least raise the minimum wage for tipped workers to one that won’t be so disastrous if they aren’t tipped good enough one shift. Menu prices may come up, but if you tip well, the dining experience was never truly that affordable.