The History of Tipping: Why Restaurant Wages Are So Low

A long time ago I worked as a bookkeeper for several small restaurants. As I prepared payroll checks, I often wondered why servers were paid less than the minimum wage-a lot less. The current hourly wage is still very low: $2.13 per hour for restaurant servers. I never heard or read an explanation for this low wage until now. A recent article by Michelle Alexander entitled “ Tipping Is a Legacy of Slavery,” really opened my eyes. She explains that she came to understand the history of tipping in the United States when she read a book by Saru Jayaraman entitled Forked: A New Standard for American Dining.

Alexander notes that “after the Civil War, white business owners, still eager to find ways to steal Black labor, created the idea that tips would replace wages.” While tipping originated in Europe as a way for aristocrats to show favor to servants as bonuses, restaurant owners in the United States mutated the idea into a way to limit pay for Black workers by defining tips as the only source of income. The Pullman Company tried to get away with this to underpay train porters who were predominantly Black, but the porters formed a union and eventually got higher pay. Restaurant workers, mostly women and disproportionately Black, were not able to unionize. In fact, Alexander explains, when the Roosevelt administration signed the first minimum wage law in 1938, it excluded restaurant workers. It was not until 1966 that a subminimum wage was formally created for tipped workers, locking the tipped workforce, which is 70 percent female and disproportionately Black and brown women, into a subminimum wage, currently $2.13 per hour. Alexander points out that the subminimum wage “continues to perpetuate both race and gender inequity today,” which has been made even worse by the pandemic. Specifically, Alexander points out that

• A mostly female, disproportionately women of color workforce of tipped workers still faces the highest levels of harassment of any industry.
• Women restaurant workers in the forty-three states with subminimum wage standards report twice the rate of sexual harassment as women working in the seven states that pay a full minimum wage on top of tips. These women are not as dependent on tips and feel more empowered to reject harassment.
• The pandemic has exasperated the vulnerability of subminimum wage restaurant workers as customers now subject them to “mask harassment” in order to earn tips. With tips down 50 to 75 percent, male customers know women are desperate.
• Before the pandemic, Black women who were tipped restaurant workers made five dollars per hour less than their white male counterparts, who more often work in fine dining establishments. Black women tend to work in casual dining restaurants where tips are lower.
• In the pandemic nearly nine in ten Black tipped workers report their tips decreased by half or more, compared to 78 percent of workers overall.
• In addition, tipped workers are now required to do more for less-enforcing social distancing and mask rules, which creates hostility and further reduces their tips.

The pandemic and a new president of the United States have created an opportunity to fix this egregious legacy of slavery with new minimum wage legislation, the Raise the Wage Act. This legislation will raise the minimum wage overall and fully phase out the subminimum wage for tipped workers. The restaurant industry pays millions of dollars a year to fight pay raises, but it is time that tipped workers were paid a full and fair living wage. Let’s all encourage our congressional representatives to support the Raise the Wage Act.

Anne Litwin, Ph.D. is an Organizational Development and Human Resources Consultant, Keynote Speaker, and Author of ‘New Rules for Women: Revolutionizing the Way Women Work Together.’

Originally published at https://www.annelitwin.com on March 1, 2021.