Three years ago, Jay Porter, a former restaurant owner who abolished tipping at his restaurant, made a powerful case against the practice, an industry standard in the United States. Everything at his establishment, he wrote in a 2013 Op-Ed for Slate, improved after he enforced a mandatory 18 percent service charge—the food, the service, the pay, the customer satisfaction. Reflecting on what tipping has done to the restaurant industry as a whole, he penned what I believe is one of the most succinct and yet irrefutable paragraphs about why tipping is wrong:
Studies have shown that tipping is not an effective incentive for performance in servers. It also creates an environment in which people of color, young people, old people, women, and foreigners tend to get worse service than white males. In a tip-based system, nonwhite servers make less than their white peers for equal work. Consider also the power imbalance between tippers, who are typically male, and servers, 70 percent of whom are female, and consider that the restaurant industry generates five times the average number of sexual harassment claims per worker. And that in many instances employers have allegedly misused tip credits, which let owners pay servers less than minimum wage if tipping makes up the difference.
The problems are vast, as Porter points out. They tend to afflict a very specific and unfortunate swath of the American populace: the poor and disadvantaged. And the evidence isn't merely anecdotal.
Few people are better versed in the ways in which tipping marginalizes those who depend on it than Saru Jayaraman, who is the co-founder and co-director of the Restaurant Opportunities Center United (ROC United) and director of the Food Labor Research Center at the University of California, Berkeley. Jayaraman has been working to end the modern tipping system for years, collecting the sort of data the National Restaurant Association (NRA), which has long defended the practice, hardly appreciates.
But tipping, Jayaraman says, isn't merely problematic in its current, contemporary context. The practice is abhorrent from a historical perspective, too.
While researching her new book 'Forked: A New Standard for American Dining," Jayaraman dug into the history of tipping, which complicates—or really darkens—the way in which we pay restaurant workers even further. Among the many things she uncovered is that the federal tipped-minimum wage, which allows restaurants to pay tipped workers as little as $2.13 per hour in the United States, is rooted in a regrettable period in this country's past: slavery.
I spoke with Jayaraman to learn more about the racist origins of tipping, the lingering racism and sexism the system has allowed to persist, and all the other reasons why she believes we should be ashamed about the way we pay restaurant workers in the United States. The interview has been edited for length and clarity.
You’re not exactly a fan of how we tip in America. I’m understating that, aren’t I?
I’ve definitely been a longtime advocate of ending the tipped minimum wage, which is currently $2.13 an hour nationally. It creates a two-tiered system that allows for an employee, a worker, to not be paid at all by their employer. That to me is what’s nefarious about tipping. It’s based in this idea that an employer shouldn’t have to pay workers, essentially because they’re valueless, and that’s very wrong to me.
What I have been advocating for is what already exists in seven states, including California, which is that every employer be required to pay the full minimum wage to all workers, and people get tipped on top of that. And actually those seven states, despite the change, enjoy higher rates of tipping than the forty three states with lower wages for tipped workers. We’re fine with that—we’re not trying to get rid of tipping entirely. We just want the remaining forty three states to follow in California and the other six states’ footsteps, eliminating the two-tiered system and requiring employers to pay the full wage to all workers, with tips on top of that.
But we hear all the time about how waiters in big cities make lots of money. Is there any truth to that?
It’s much, much more than that.
The restaurant industry is the second largest and fastest growing industry, and yet the Department of Labor reports every year that seven of the 10 lowest paying jobs are restaurant jobs. And, in fact, of those seven lowest paying jobs in America, four are tipped occupations. So even including tips, restaurant workers make up four of the ten lowest paying jobs in America.
There’s this myth, especially if you live in a place like New York or Washington D.C., that what tipped workers make is largely even, that everyone makes what white guys working at fancy steakhouses make.
But even in places like New York and D.C., seventy percent of tipped workers are actually women, largely working at casual restaurants, like Applebees, IHOP , and Olive Garden, earning a median wage of $9 an hour when you include tips. These people suffer three times the poverty rate of the rest of the U.S. workforce, use food stamps at double the rate, and, the worst part, suffer from the absolute worst sexual harassment of any industry in the United States. When you’re a woman living on tips—even if you’re making a lot of money on tips, which most women aren’t—you’re subject to the whims of the customer, and really encouraged by management to objectify yourself or subject yourself to objectification to make money in tips.
But yes, fundamentally, the problem with the way we tip is that employers, not customers, should have to pay their own workers.
I’ve thought about how bizarre it is, sociologically, that when you work at a restaurant, especially as a waiter, you’re essentially working for a different boss not just every day, but throughout the day.
Exactly. That’s exactly right. You don’t actually work for the person you work for. And you know what? It’s bad for the employer, too. When you have a workforce that doesn’t work for you, and is firstly responsive to the consumer, that’s problematic. We hear from our partners all the time about how it leads to workers engaging in all kinds of non-malicious but less than ideal practices, like giving free drinks to people, and basically doing things that hurt the bottom line, because at the end of the day they don’t really work for the employer, they work for the customer.
The idea that the restaurant industry was the only industry that didn’t have to pay its workers was actually codified into the very first minimum wage law that passed in 1938 as part of the New Deal under FDR. It said that you have the right to the minimum wage either through wages or through tips, which essentially gave tipped workers the right to a zero dollar minimum wage.
We’ve gone from a zero dollar minimum wage in 1938 to a whopping $2.13 an hour tipped minimum wage, which is the current federal mandate for tipped workers. Right now, it’s between $2.13 and $7 in forty three states. Seven states, however, have rejected this system, saying that no, employers should have to pay their employers a full wage, even in the restaurant system.
Employers are supposed to make up the difference if the tips don’t suffice though, right?
Well, the law has always said from the very beginning that the employer has to make up the difference between the lower tipped-minimum wage and the regular tipped minimum wage, but the U.S. Department of Labor reports an 84 percent violation rate in regards to employers actually ensuring that they make up that difference. Even if employers did ensure that tips made up that difference, there are serious problems that still remain, like the issue of sexual harassment, which is very real and plagues what is a vastly female restaurant workforce.
I’m really not just talking about Hooters, although Hooters has been one of the fastest growing chains. I’m talking about everything from Olive Garden to the Capital Grille; I’m talking about fine dining all the way down to small family restaurants.
How did tipping become such a defining feature of restaurants? How did it become so ingrained?
When rich Americans traveled to Europe in the 1850s and 1860s, they stayed at hotels and dined at restaurants. When they came back, they tried to show off that they knew the rules of Europe and how to tip, and those were the environments in which they tried to tip first. The only other environment in which they tried to tip were the porters and valets in train travel. Today 75 percent of tipped workers are restaurant workers, and the remaining 25 percent are nail salon workers and airport valets.
Initially, these rich Americans coming back from Europe would try to tip hotel workers and restaurant workers and porters, but it really was an issue of the labor movement. Hotel workers ultimately were unionized. The porters, too. The workers who were left out were the restaurant workers.
At the time, restaurant workers were predominantly in cities like New York, where white workers were migrating to from rural areas to work in urban factories. Previously, when they worked on farms, they ate at home. But having moved into the city, they spurred a growing demand for restaurant food. The problem was, they needed workers who were even poorer than they to serve them. So there were these original fast food restaurants, or what I call the original fast food restaurants. Factories workers were given something like 15 minutes to run out of the factory to what were called ‘penny places,’ because they’d run in, grab food, and slap a penny on the table for the former slaves who were serving them their food.
So industrialization really coincided with growth in the United States, spreading the practice of tipping so quickly it became the standard. And at the time the only workers poorer than the newly industrialized workers who would serve them food were black.
That's another wrinkle that many people don’t know about, right? Tipping in the United States actually dates back to slavery.
The origin of tipping is really the feudal system, it’s this idea of noblesse oblige. But when tipping came to the United States, it had a real racial tinge to it, because, originally, the workers who earned tips were almost exclusively black workers—they were newly freed slaves.
There was this massive anti-tipping movement to protest the practice, a resounding populist movement that actually got anti-tipping bills passed in six states across the country, including Washington state and many southern states. What’s interesting is that that movement, the anti-tipping populist one, ending up spreading to Europe and succeeding, because the labor movement picked it up and said ‘we are professionals, and we shouldn’t have to live on tips, because we should be paid by our employers.’ That’s why you see so little tipping in Europe. What we started here spread there and actually killed it at the origin in Europe.
We, on the other hand, went in the opposite direction in the states. The restaurant industry, which was hiring newly freed slaves as tipped workers, really wanted the right to hire these workers but pay them next to nothing. So they put forth this idea that they were valueless and really shouldn’t have to be paid by their employers. They essentially made the argument that newly freed slaves should get a zero dollar wage.
And part of the racial divide, part of what made tipping such a race-specific practice, is that there was a cultural stigma where white people would balk at the idea of being tipped because they found it degrading?
Exactly. In fact, among the six states that passed tipping bans, five of them were southern states, and it was based on this idea that black workers were the only workers making tips, because there was this idea that you only tip inferiors. That is what I mean when I say the origins are noblesse oblige. The origin is that you tip an inferior. When the practice came to the United States, the newly freed slaves, the black workers, were the equivalent of the proletariat in the feudal system. When these states banned tipping, it was because they were trying to discourage whites from tipping instead of actually paying former slaves.
So when we talk about the quiet ways in which racism persists in society today, tipping is this strange remnant that most people probably aren’t aware of.
Yes, absolutely. But you know, that racial segregation still exists, albeit in a slightly different form. We’ve done a ton of research on racial segregation in our industry, which is still incredibly pervasive. There is still a $4 per hour wage gap between what white workers and workers of color make in the restaurant industry, and it’s because workers of color are relegated to lower level positions. In fine dining, they work as buses and runners, instead of as server and bartenders. They also work in lower level segments, at places like Olive Garden instead of at places like Capital Grille. They work in places where you make less money.
So the origins are racist, but the current impact, the current reality, is inherently racist, too. Because of the two-tiered system, because of the racial segregation, the people who are most impacted and impoverished by the current tipping system are people of color, and in particular women of color.
You have done a lot of research about how the restaurant industry is especially cruel to women. How bad is it?
There’s actually this story that got cut out of my book about a woman who was working at ... one of the biggest fine dining chains in the country, who experienced horrific sexual harassment from very wealthy, well-heeled customers coming to the restaurant. The problem is not just the wage, and the fact that these people, most of whom are women, don’t make enough to live on. The very fact of having to live off of tips, whether it’s a lot or a little, basically is a source of tremendous gender inequity and sexual harassment.
And you have data to back this up.
For our most recent report, which came out in 2014, we asked hundreds of restaurant workers to answer this question: ‘Have you experienced sexual behavior in the restaurant industry that is scary or unwanted?’ And 90 percent of workers, both male and female, said yes.
More broadly, the data show that the restaurant industry has the highest rate of sexual harassment of any industry in the United States. It’s actually five times the rate of all other industries. Seven percent of American women work in restaurants, but thirty percent of sexual harassment complaints from women come from the restaurant industry. It's the single largest source of sexual harassment complaints of any industry in the United States.
Our research shows that all of that sexual harassment—from customers, coworkers, and management—can be traced back to this whole culture of forcing women to make their income based on pleasing the customer. To me it’s all summed up by this one quote from Texas, where they earn $2.13 an hour before tips. This waitress was speaking at a Senate press conference, and she said: ‘Senators, what would it be like for you if your income depended on the happiness of the people you serve? Because my income depends on the people I serve, I have to put up with a guy groping by butt every day so I can feed my four year old son every day.’
Given how pervasive restaurant work is, especially for younger women, the problem is not only immediate—it also has broader, longer term consequences, right?
Absolutely. It's the reality for for six million women in America. Six million women are tipped workers in America. But for millions more, this is the first job in high school, college, or graduate school, and that’s extremely troubling. It completely skews the way in which they are taught what is acceptable and tolerable in the work place. I have had women come to me to tell me they were sexually harassed in their corporate job, but that they didn’t do anything about it because it wasn’t nearly as bad as when they were working in the restaurant industry as a young women.
So the industry is essentially setting the standard for what is tolerable in the workplace. And it’s setting a very low bar.
How does one even respond to all of that? Or, I guess, more immediately, how has the industry responded?
After we released our report in 2014, the NRA changed its leadership to be a woman, and launched a PR campaign with about 100 high profile women saying how the restaurant industry is such a great place for women to work. So they never actually responded directly to the critique of to the data on sexual harassment. Instead, they launched a marketing campaign to spread the idea that the industry is a good place to work for women.
I see, so the problem wasn’t that women were being harassed, it was that people know they were being harassed. That's encouraging.
I mean, when we’ve directly confronted them on this issue we’ve hit a wall, too. In the Connecticut state legislature, we bought up this issue of sexual harassment, and a leader of the Connecticut restaurant association, a restaurant owner, basically said ‘well, if women are experiencing sexual harassment they should find another place to work.’ That’s been their response. They have had no legitimate response.
Their response to the poverty issue is that no, it’s not true. They say these workers make a ton of money, that they underreport their tips, which is why you don’t see it in the government data. The data of course disproves that. But with sexual harassment it’s worse, since they don’t even pretend to have an explanation.
So, despite all of this, not everyone has a problem with tipping—like the National Restaurant Association, which vehemently defends it. What’s their argument for it?
Their favorite thing to say is that no one actually earns $2.13 an hour, and that employers are obligated to make up the difference. They love to paint this picture of the wealthy white guy working in fancy restaurants as though it’s emblematic of restaurant work around the country. I’ve been at conferences and senate hearings, where they’ll say ‘our workers make $18 an hour with tips,’ and they can because, honestly, for about a century they haven’t really been pushed to provide actual evidence of this.
Actually, why don’t I give you an example. I had somebody from the Senate budget office call me recently to tell me that the NRA was recently in their office claiming that tipped workers across America make $18 an hour. We said that’s great, now give us some evidence. So they followed up with a letter, and on their letterhead it said ‘our workers make $18 an hour with tips.’ The letterhead was the evidence! That’s been the sort of nonsense we’ve been dealing with for a hundred years. Here we are providing government data—and this is not even worker reported data; it’s employer reported data, payroll data from the Bureau of Labor Statistics—that shows these workers are making a median wage of $9 an hour with tips, and all the evidence they have to the contrary is a baseless line on their letterhead.
So it’s really been misinformation spread by the restaurant industry that’s giving weight to the argument for the current tipping system. I mean, if you read the history, this is not the first time we’re having this argument. For a century, the NRA and its predecessors have argued that waiters are all wealthy steakhouse servers so there’s no reason for us to pay them a wage, since they’re already making a ton of money in tips.
They also warn about what would happen if we were to get rid of tipping, right?
Yes. The other argument they like to use is that if we actually had to pay these workers a wage the industry would collapse, the system would fail, many jobs would be lost, and prices would skyrocket.
But here's the thing: that all has been proven to be completely false by the seven states that have completely eliminated this system. They have higher restaurant sales per capita, higher job growth in the restaurant industry, higher job growth among tipped workers, and even higher rates of tipping than the others. California is actually the state with the largest and fastest growing restaurant industry in the country, and Alaska has the highest tipping rate in the country even though it has had the same wage for tipped and non tipped workers for decades.
Several high profile restaurateurs and chefs have done away with tipping recently. Is this a sign that tipping is on its way out in the United States? Is the tipped minimum wage at the very least on its way out? Or is the practice still too ingrained for that kind of change?
You know, if you had asked me that question nine months ago, I wouldn’t have known. But I have to say that the number of really high profile industry leaders that have come out of the woodwork that are now with us and supporting us, that are willing to go to state capitols to talk about this issue, is changing that. One of them even said to me recently that they really believe the tipped minimum wage will be gone within a decade. And I see that, too. We’re on the precipice of some monumental, really historic change.
Congress introduced the first bill last spring, proposing the full elimination of the tipped minimum wage for tipped workers. That is a hundred years in the making, so these are historic changes. And these sorts of serious discussions, I think, are a sign that it’s on its way out. The data, as we have talked about, is just too overwhelming to ignore. I really don’t think the National Restaurant Association is going to be able to hold onto their stance, which is supported by pretty much none of the data we have available.
In terms of tipping, a lot of the industry leaders we work with think that as that change happens—the migration away from the tipped minimum wage—they see tipping also slowly going away. Our concern, and why we would never want to legislate that or push for a complete elimination of tipping, is that we don’t think that the employer will do it in the way people like Danny Meyer have done it, which is transparently, guaranteeing that his workers will get everything that they would have gotten through tips through wages.
What we want is one fair wage. We want to get rid of the two-tiered system, and let workers earn tips on top of a fair wage.
So kind of like how many other industries that have adopted tipping function. Like, say, coffee shops, where baristas are paid a salary at or above the minimum, and also tipped from time to time?
Thats exactly right.