Adam Croot, CC BY-NC 2.0
Leaving a tip at the end of a meal in a restaurant is a customary practice to most Americans, but few diners are familiar with its history or its continued impact on workers.
Tipping originated in the Reconstruction Era, in a labor market where tips allowed employers to hire Black sharecroppers, railroad porters, servants, and waiters for little pay. Today, Black women tipped workers can make up to $5 per hour less than white male counterparts and, in states where it is legal to pay tipped workers $2.13 an hour, 18.5 percent of servers and bartenders live in poverty. These issues have driven the campaign to increase the minimum wage, which is an important step towards creating sustainable career paths in food service.
In early October, Chicago’s city council passed an ordinance to raise the minimum wage for tipped workers by 8 percent over the next five years until it meets the city’s $15.80 minimum wage in 2028. Chicago joins Alaska, California, Minnesota, Montana, Nevada, Oregon and Washington, D.C. in changing a policy that has kept the tipped minimum wage stagnant since 1991. In these places, any tip left is in addition to the standard minimum wage.
California recently implemented a $20 minimum wage for fast-food workers. Other campaigns are gaining momentum in Illinois, Michigan, New York, Maine, Maryland, Massachusetts, and Wisconsin, along with support for the federal Raise the Wage bill (which has been introduced every year since 2017). The push for change, driven by advocacy groups for food service workers like One Fair Wage in Chicago, seems to be paying off.
In response, the restaurant lobby is fighting to keep wages low and tips in place, often by claiming that wage hikes will force restaurants to impose steeper service charges or make serious labor cuts. Service charges are additional fees, often ranging from 3 to 22 percent, that restaurant owners have no legal obligation to share with employees. For businesses on the lower end of this range, service fees can cut into tips without supplementing income significantly.
In October, servers backed by the Restaurant Association of Maryland wearing “Save Our Tips” t-shirts gathered in Prince George’s County to protest fair wage legislation. The “Save Our Tips” campaign, partially managed by Lincoln Strategy Group, who canvassed for Donald Trump in 2016, targeted servers in D.C. and Maryland with claims that fair wage legislation would force tips to decline. Scare tactics like these ignore the reality of lower poverty rates for servers in equal treatment states and the myriad of other problems with tips, such as discrimination and wage theft. In Portland, Maine, the National Restaurant Association spent $50,000 trying to remove the question of tipped wage credits from the ballot. Despite opposition from many industry insiders, some restaurant owners in recent years have voluntarily shifted to a no-tip model that views wage increases as key to employee retention.
When Sultan Ahmed opened Sultan, a Pakistani restaurant in Madison, Wisconsin, he wanted to create a model that recognized the value of a restaurant’s primary asset: labor. “One of the things that’s happened because of tipping is that no one views—especially front of house hospitality work—as a career anymore,” Ahmed tells The Progressive. “It’s become this transient employment . . . my goal is to eventually have a staff that views this as a career.”
Tipping culture contributes to the societal message that serving is not a real career. This is despite the fact that, in the past year, U.S. spending on restaurants has increased by 13 percent, and according to data from the U.S. census, restaurant expenses now outpace grocery spending by $23 billion. With rising inflation and increasing work hours, dining out has become an indispensable aspect of the American diet, yet it can’t sustain the people who provide that service.
Tipping culture contributes to the societal message that serving is not a real career.
Rule No. One, a hospitality group in Madison, moved away from tipping in 2020. “As much as that was about equal pay,” Tim Williams, the company’s chief operating officer, says, “there was a much larger piece . . . with creating lasting professional paths for everyone.” Employees of Rule No. One and their four restaurants receive paid time off, 401k benefits, and health insurance. Like Ahmed, Williams spoke about changing the “nomadic” nature of restaurant industry work.
For both businesses, providing food service workers with a living wage is a step towards recognizing undervalued forms of labor. “Not everyone can, or should, become an academic,” Ahmed adds.
Today, “degree inflation”—the rising need to have a college degree to access economic security—means that fewer and fewer jobs are available to the 62 percent of the U.S. population without a bachelor’s degree or higher. In other parts of the world, professions such as maître d’ remain a viable path to economic security and social respectability without the need to pay for school.
“As someone who’s worked in every facet of the industry, I can say there is no position that works harder than anyone else—and if there is, to be honest, nine times out of ten it’s the lowest paid position in the restaurant,” Williams says. “This system can work. I know a lot of operators are scared . . . of the proposed minimum wage increase, but it is possible. You can operate a strong functioning business.” Rule No. One recently approved increasing their employees hourly wages by one dollar to $16/hour after two years operating with a “low tip” model where guests are able to tip but are not expected to subsidize the majority of a server’s wage.
As equal wage states and progressive restaurants around the country have shown, eliminating tip credits allows restaurant workers to plan financially and access benefits such as healthcare and paid time off. Meanwhile, subminimum wages reinforce the notion that food service is not serious labor and that payment for that work should be conditional. The issue of tipped wages, like the larger minimum wage struggle, is not only about raising income, but also recognizing the worth of long undervalued forms of labor.