Question

The author makes a compelling argument why we should get rid of the tipped salary of $2.13 per hour for tipped employees. What do you think of the author's argument? Do you think we should get rid of the special salary for tipped employees? Do you think the salary originally originated from discriminatory practices? How would your resolve the issue?

Answer 1

What is tipping?

Tipping can be confusing and varies. But a general rule for waiters is to tip 15 to 20 percent of the pre-tax bill, and $2 to $5 per night for housekeeping service. Tipping expectations are tied to minimum-wage levels. Waiters and other restaurant staff can earn three or four times more from tips than wages

Tipping Encourages Racial Profiling

For instance, servers may provide slower service to black diners — or try to turn the table over more quickly. Brewster’s body of research, which includes surveys and interviews with servers, found that in some restaurants, servers actively avoid waiting on black customers because they believe that they would lose out on tips. In some instances, restaurant staff played “games” in which servers tried to stick one another with black tables, or developed code words to warn each other when a black table is seated. This behavior was sometimes allowed by management, Brewster found.

In one 2012 study, Brewster surveyed 200 servers from “bar and grill”-style restaurants. He asked the servers about their perceptions of black diners, and whether they’d seen discriminatory behavior by other employees. Most respondents admitted to providing different levels of service based a diner’s race, or witnessing another server do so, at least “sometimes.” In similar studies published by Brewster and colleagues, servers who admitted to profiling black customers justified their actions by claiming that black patrons demanded more and tipped less. Another study found such sentiments published on online message boards for waiters. (Earlier this month, Applebee’s fired employees at a location in Missouri for racial profiling.) Research does show that black diners appear to tip less than white diners — by roughly 3 percentage points

One straightforward explanation for why white servers earn higher tips than servers of color is that they are disproportionately employed at fine-dining restaurants — defined by the restaurant worker advocacy group Restaurant Opportunities Centers United as “full-service restaurants with a price point per guest of $40 or more including beverages but excluding gratuity.”

People of color are more likely to be employed in “back-of-house” or non-tipped jobs — like dishwashers and line cooks — where they often find it difficult to rise up in the ranks to better-paid tipped positions in the “front of the house,” in part because of implicit biases

The tipping economy is particularly unfriendly to women. According to an October 2014 report from ROC, 80 percent of female servers say they've been sexually harassed at some point in their careers, and sexual harassment is more prevalent in states that only pay servers the federal sub-minimum wage of $2.13 an hour, as opposed to states that mandate a higher minimum wage.

"Since women restaurant workers living off tips are forced to rely on customers for their income rather than their employer, these workers must often tolerate inappropriate behavior from customers, co-workers, and management," the report says. "This dynamic contributes to the restaurant industry's status as the single largest source of sexual harassment claims in the U.S."

The tipped minimum wage contributes to poverty. But in high-end restaurants, tipping leads to a different form of income inequality. When menu prices are higher, servers often end up making a lot more in tips than kitchen staff, who have equally valuable skills but are often paid modest wages.

Because the Fair Labor Standards Act restricts servers from sharing their tips with workers who aren't directly engaged in customer service, some upscale restaurants have banned tipping altogether in favor of a service charge, which those restaurants can use to pay their employees more equitably.

The restaurants Next and Alinea are sister establishments in Chicago. Neither is cheap. (With wine pairings, the bill at either restaurant can easily exceed $300 for one person.) Customers at Next and Alinea pay a mandatory 20 percent service charge, a system that co-owner Nick Kokonas says allows him to pay all his employees a fair, performance-based wage, whether they're waiters or sous-chefs.

If restaurants have to pay servers a higher hourly wage, they'll be forced to increase menu prices and that will drive business away by giving people "sticker shock." But in all likelihood, the price hike of your meal, or the mandatory service charge tacked on in lieu of a tip, would be roughly equal to what you would have paid in tips anyway. In reality, customers already pay 100 percent of servers' wages, said Azar, who has done extensive research on the subject.

"Restaurant owners don't bring money from their own personal pocket to pay servers," said Azar. "Whatever they pay waiters is from the restaurant revenues, and [those revenues] come from customers paying. It makes no difference if these payments are called tips, prices, or service charges."

So if you're bothered by restaurants that add a mandatory service charge to the bill, don't worry: You're paying the same amount, albeit in a different form, that you normally would.