Tipped and Tricked: It’s Time To Pay Service Workers A Living Wage!

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If you’ve recently been out to eat, grabbed a cup of coffee, taken a Lyft, or gotten a haircut, you’ve likely given someone a tip. Leaving a tip as a sign of appreciation is a regular practice in the U.S., and is more common here than any other country in the world. Tipping has become increasingly prevalent across different service sector jobs, and as wages have stagnated and the cost of living has increased dramatically, tips make up an important part of the income of roughly five million workers in the U.S. While tipping is a lifeline for workers in today’s current working conditions, the economic model of tipping as a whole is anti-worker and negatively impacts both the worker and the customer. 

Most tipped workers would say that they really need tips. A restaurant server, thought of as the “classic” tipped worker, usually earns a majority of their income through tips, while getting a subminimum wage from their employer. In many states, this subminimum wage is only the federal minimum of $2.13 an hour. Servers are therefore wholly reliant on customers at restaurants to tip between 15-20% of sales in order to make ends meet. When customers tip below this, or not at all, it can put servers and their families in financially strenuous positions. The difference in tipped wages month to month can determine whether a family is able to pay their rent.

A Growing Problem

Tipped work has changed over time, however, and tips now play a larger role in work outside of just the restaurant industry. There are more service jobs than ever before. This March, the leisure and hospitality sector saw the most growth with 72,000 new positions, while the manufacturing, construction, and retail sectors all saw job losses. An economy dominated by service jobs means many more workers holding multiple jobs in precarious industries. The custom of tipping has expanded to include thousands of counter-service workers, including baristas and food service, and gig workers that work for companies like Uber or Doordash. These workers make minimum wage and typically make far less in tips than servers. The pathetic state of the $7.25/hr federal minimum wage means tips are still vital to making rent, buying groceries, and generally scraping by. In the age of persistent inflation and stagnant wages, even $15/hr is a poverty wage across the U.S. To many workers, tips make it possible to survive, and therefore tipping itself can feel like an act of solidarity between working people. 

However, at the heart of the matter, tipping allows bosses to shove the burden of providing a subminimum wage onto other workers, i.e. customers, generating even more exorbitant profits off the cheap labor of their employees. This relationship becomes abundantly clear when looking at the origins of the custom. Tipping began in the U.S. after slavery was abolished following the Civil War. Employers in the service industry took advantage of the limited economic opportunity for Black people recently freed from slavery by letting them “work” but paying them no wage at all. Instead, bosses pressured customers to provide a small extra charge to their server. The extreme racism of the post-Reconstruction-era U.S. allowed employers to continue profiting off the free labor of an underclass of workers and continue a slavery-like business model. 

Tipped work today has sanitized its image and is a far cry from the horrors Black workers endured in the post-Reconstruction period. But the power imbalance created by the tipping system remains the same, pitting service workers against working class customers. Customer-facing tipped workers endure far greater levels of harassment and exploitation than their non-tipped counterparts. The reliance we have on our tips means we are much more vulnerable to mistreatment and are financially incentivized to withstand verbal and even physical abuse while on the job. Whether a customer has an angry outburst about their overcooked burger or makes a sexist comment to their barista, the tipped worker has to judge how their response will affect the tips from their customer and those around them. Smiling through these types of situations is often the choice that workers have to make. Some of my coworkers at Starbucks would actually switch positions or step off the floor when customers with a record of harassment were seen waiting in line, but this wasn’t always possible Far from being on the side of their employees, managers and supervisors are financially incentivized to downplay or ignore instances of mistreatment and penalize workers who speak up.

Sexual harassment is one of the biggest abuses increased by the tipping system. All tipped workers report higher rates of sexual harassment, but women are by far the most affected. 71% of female restaurant workers report having been sexually harassed on the job, and not only from customers – 41% report facing harassment from a manager or supervisor! Our low wages make the financial exchange from customer to employee extremely important, and in our deeply sexist capitalist society, that power imbalance manifests in extreme objectification of women service workers. In a recent trend on TikTok, female servers test out and report back that wearing their hair in pigtails results in significantly greater tips. While these servers recognize that this is because men are sexually infantilizing them, many say they are going to keep wearing their hair up after testing the “pigtail theory.” As one server put it with a shrug, “single mom,” pointing to herself. This trend is just one of many examples of how women in the service industry are pressured to withstand abuse and even normalize their own objectification.

Gig workers like Uber, Lyft, and Doordash drivers face a different side of the problem: consistent undertipping. While it has long been expected that customers leave a solid 20% tip for taxi drivers, the tradition hasn’t translated to app drivers in the same way. Multiple reports show that Uber drivers average under 10% in tips. This may be because of the depersonalization of the app experience or because these companies pile on junk fees that inflate the price of their service. App drivers are subject to very inconsistent wages because of fluctuating demand, especially since the pandemic. This, compounded by the high price of gas, means tips are all the more important for drivers, sometimes to just break even for a food delivery. Black and Hispanic workers are much more likely to work these jobs than their white counterparts. 

Make The Bosses Pay!

Ultimately, customers are paying the price for this tipping culture. The Square app may give a suggested tip amount of $1, $2, or $3 when a worker takes 30 seconds to scoop your ice cream or pour your black coffee, and even suggests a tip for the server staff of 20% when picking up food, not dining in. Our tips go to workers (usually), but allow the bosses to keep wages at the bare minimum while lining their pockets. The point-of-service tipping model pressures the customer to tip on things that we may not have in the past, and with companies using inflation as an excuse to blatantly price-gouge us, this extra cost can sting. The anxiety that comes with this has come to be known as “guilt-tipping” because most people know service workers deserve more than what they’re getting, but rightly feel as though they shouldn’t be the one to pay for it.

For the time being, we absolutely shouldn’t stop tipping. Socialist Alternative stands with unionized Starbucks workers fighting for credit card tipping, as it would dramatically improve workers’ lives and especially because it’s been used as a bargaining chip against the union drive. Making the bosses pay for our labor, not other workers, will require mass unionization of the service industry, built on campaigns for the best possible wage increases, so we can begin to phase out this anti-worker custom and replace it with a stable and livable income for all.

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