opinion

OPINION: Pay Tipped Workers a Living Wage



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Money sits on a table Dec. 1 in Franklin Hall. Alex Deryn Buy Photos

Tipping in the United States is completely backward compared to Europe and other developed countries. In the U.S., tips are usually the worker’s primary source of income and tipping is typically expected even when service is subpar.

The U.S. needs a massive shift in tipping culture, and I think the best way to do this is to abolish the unnecessary pay gap between tipped and untipped workers. All workers should make a living wage, with tipping being a gratuitous gesture rather than a necessity.

In many other countries, while tipping is sometimes customary, it is not to the extent it is in America. The federal minimum wage for tipped workers is currently $2.13 an hour, requiring employers to compensate workers if their total wages and tips are less than $7.25 an hour.

This is abhorred because not only is the current federal minimum wage not a living wage, but allowing tipped workers to be paid less per hour is simply an excuse for businesses to boost profit margins by shifting the cost burden of paying workers onto customers who have no obligation to tip.

Moreover, tipping is inherently racist and sexist, with women often making more in tips than men, and people of color seeing less in tips than whites. Tipped workers are also twice as likely to live in poverty according to a study by the Economic Policy Institute.

Tipping in America is not about rewarding good service, it is about guilt-tripping customers into paying their wages. Businesses employ tipped workers either to rake in more profits or because they worry higher prices will drive away paying customers.

Tipping is supposed to be voluntary but the tipping culture in America coerces 15-20% tips at all times in order to pay the workers what they should have already received for their work by their employer. 

An argument in favor of the current tipping system is that tipped workers must earn their compensation and that without adequate tipping on top of the service cost quality will go down. However, tipping is only very loosely correlated with service quality according to Cornell Hospitality Professor Michael Lynn, who is a leading expert on tipping in America.

In his review paper titled “Restaurant Tipping and Service Quality: A Tenuous Relationship,” which analyzes 14 different studies on the relationship between service and tipping, he notes that “the relationship was weak enough to raise doubts about the use of tips to motivate servers, measure server performance, or identify dissatisfied customers.”

This reasoning is also inherently flawed because yes, workers have to earn their pay, but their wage should not be contingent on the generosity of customers. For example, you would not expect a secretary to make any less for their workday depending on how well they perform on a particular day, they are still entitled to their day’s compensation.

On top of this, people may not know how much to tip or when, with many cash tips going unreported to the IRS. Even if the federal minimum wage was increased to $15 an hour, pushing the burden of paying the worker’s wage onto the customer is unjust because it allows businesses to employ cheap labor at the worker’s expense.

Another worry is that by changing to non-compulsory tipping, prices of goods and services may go up. Prices would increase by a small margin (10-20%) but that is no more than what would already be paid in tips. Some businesses have also tried tacking on a service fee of 15-20% instead.

Regardless, the consumer would be paying roughly the same amount as they would be paying with the current prices plus a tip. Slightly higher prices may seem expensive to customers, but that is because they do not consider that they do not have to tip.

The practice of tipping in America is grossly anti-worker and anti-consumer because it forces transactions which should be expected of a business as an employer. If employers cannot afford to pay someone a living wage for their time spent at work, then they should not be hiring anyone to begin with.

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