Tipped workers deserve security of minimum wage

Credit: Diane Lee/ Credit: Diane Lee/

In the fall of 2015, Danny Meyer, CEO of Union Square Hospitality Group and founder of Shake Shack, announced his intention to eliminate tipping at all 13 of his New York restaurants by the end of this year, beginning with his spot inside the Museum of Modern Art, called Modern. The driving force behind this bold business move is the desire for equality within the restaurant. A restaurant depends on two groups of people for it to run successfully — service staff in the front, and food preparation staff in the back. Given this divide, American labor laws create an even wider gap between the front and back of house.

When Franklin D. Roosevelt penned the the New Deal in 1938, he left out a minimum wage for tipped workers. And in the nearly 80 years since, that minimum has slowly inched its way up to $2.13. This legislated divide essentially puts the onus on the customer — not the employer — to pay servers a living wage.

In successful restaurants like Meyer’s Modern, where the service is sure to be excellent and diners are wealthy enough to throw down a generous tip, servers can end up getting paid even more than their counterparts in the kitchen. Tension builds among hardworking cooks who get paid a set hourly wage that can’t compete. And for restaurants like Modern to fix this, it means fixing the income of the server to where it currently is, and raising the fixed income of cooks to equal servers’. This results in price hikes up to 40 percent.

Modern and others in the Union Square Hospitality Group have been successful with this effort because the clientele can afford to pay the higher menu prices. But the reality is, the vast majority of American servers are not white males working at fine dining institutions. They’re women working at chain spots like Applebee’s and Olive Garden where the model is affordability.

The price adjustments required to include service would cause the businesses to implode. In the majority of American restaurants, the switch to service charges is much dicier.

Tipping in America, though it may seem ingrained in our culture, is actually a relic borrowed from Europe centuries ago, but has since been outlawed with the help of labor unions. It first made its way to America in the 1850s and 60s, coming back with wealthy white travelers who wanted to show off their cultural know-how to seem more European. The American manifestation of that urge was that the only tipped workers were newly freed slaves following the Civil War. They were tipped so that no employer would have to be responsible for paying their wages, and the practice only served as one of many ways to hinder freed slaves’ integration into freedom. In fact, it was considered out-of-the-question to tip a white person, because it was a practice "reserved for 'Negroes.'"

Even though the practice may seem innocent today, it still serves a similar purpose of perpetuating a system that separates classes. And the racial element isn’t gone. According to The New York Times, “53 percent of tipped workers in New York State are minorities, and 21 percent live at or below the poverty line.”

The racial implications of the system are worsened exponentially by the gender issues: estimates from the Restaurant Opportunities Center (ROC) show that two-thirds of tipped workers are women, and 36 percent of those women are mothers. The statistics also show that tipped workers use 1.7 times the amount of food stamps of the rest of the workforce.The system of tipping openly disadvantages already disadvantaged populations, allowing employers to get away with not paying them living wages.

Tipping inherently creates two groups: the tipper and the tippee. The served and the server. And the person on the receiving end essentially becomes the server’s boss. Whether or not they go home with a day’s wage depends on the satisfaction of each and every boss that sits in their section that day. And for many of these women, satisfying a customer forces them to tolerate intolerable behavior.

In fact, the restaurant industry accounts for 37 percent, a plurality, of national sexual harassment claims, even though it only accounts for 7 percent of working women, according to
ROC data. This nightmare is a reality for millions of women in America who need to make a decent living, both for themselves and for the families that depend on them.

On top of it all, wage theft is a huge problem in America. According to a report by the Economic Policy Institute state legislators have recently trended toward passing bills that weaken labor standards across the board.

Because of lax regulations, employers are able to get away with paying workers below minimum wage, withholding overtime compensation, denying breaks, and, of course, stolen tips. Restaurants are also legally responsible for making up the difference if a worker’s tip doesn’t close the gap between the tipped and national minimum wage, but they’re rarely held to this standard. Wage theft happens in several industries, but 10 percent of all wage theft claims come from restaurant workers. This may not even account for all cases, depending on an employee’s knowledge of their rights and financial ability to pursue the claim.

The system of tipping in America is broken. It doesn’t always work the way it should. The median annual income for a server only amounts to $19,250, and depending on how many people that income supports, it may not keep a family above the Federal Poverty Line. The solution, however, is not to outlaw tips. The average diner won’t like the higher menu prices, and the industry wouldn’t survive that shift.

But a $2.13 minimum wage for tipped workers is not acceptable. The government cannot continue to allow employers to rely on customers to pay their employees living wages. Tips should be supplemental to the income, and not the income itself. The workforce of tipped workers deserves to earn the same minimum wage as the rest of the nation. The two-tiered minimum wage system only serves to further economic, gender, and racial inequalities in America that have persisted for too long.

Servers are an integral part of the American workforce, and they deserve wages that reflect the respect they earn every day.