The Tipping Economy Sucks, Here’s Why

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Last week when Grub Street published a slew of articles discussing the Tipping Economy, I was reminded how a lot of important issues are glossed over in the debate about whether or not the tip system is antiquated, inefficient, or just plain unfair. 

Grub Street’s series is timely because through December, the Department of Labor is parading a Wage Board all over the state for the purpose of hearing testimony by service industry interest groups, owners, and workers—some of whom are in favor of maintaining the existing sub-minimum wage unique to the tip heavy restaurant industry. The Wage Board will review the testimony and eventually recommend if any changes should be made to the current minimum wage for tipped restaurant workers, which stands at $8 an hour. I sat in on the board’s meeting in New York City last month, and heard accounts of a completely different side of the restaurant industry than what Grub Street (or any other food blog really) is concerned with. 

In order to have a real discussion about whether or not this country’s “tipping culture” is backwards, it’s important to take into account the experiences of service industry workers who are not employed by celebrity chefs, mixing craft cocktails, or serving farm-to-table fare.

In “Is it Time to Topple Tipping?” Adam Platt recounts his daring experiment to withhold tips for service he deemed less than satisfactory. The appeal of not having to pay a few more dollars for service while on a trip to Singapore had a big influence on Platt and when he arrived home he was distraught to find out that, yes, in this country, at least, tipping is still part of what it means to be a decent human being who recognizes that tipping is part of a system that symbolically puts servers and the served on more equal footing. But instead of reassimilating to life in the USA, Platt decided that lately things have been getting way out of hand and that the whole custom should go straight to hell in a tip jar.

I guess this is the part of being a white dude that involves having a sense that your position entitles you to embark on daring social experiments and to hell with everyone else. It is, after all, up to you to change the world, so who cares if you screw other people over in the process? Thus Platt decided he was going to recreate Singapore’s “strange, blissful absence of tips” right here at home in New York City, and that hopefully the people he failed to tip would just like get it or something.

Platt embarked on a “rash experiment” to tip only when the provider of service was on their best behavior—or what he deemed “best” behavior. (For example, Platt likes his cab drivers to chat with him, and so penalized them for rides spent in silence, though that sounds like it would be pretty freaking awesome to many people). For the most part, Platt successfully treats people like giant sacks of poop but he fumbles when his more humane friends pressure him to leave 20 percent for a meal at a crowded bar even though he complained that “time dragged between courses.”

I won’t lie: The article made me fantasize about what would happen if Platt were to saddle up to the Bronx Bar in Detroit, and—after not tipping for a beer—inform the old lady behind the bar that he’d like a fork and a knife for his burger. I promise, he wouldn’t have hair eyes left after that, let alone dollars.

But this isn’t Detroit, this is New York.

And New York is a place where people like Platt can convince themselves that it’s reasonable for the purposes of a little experiment to burden the waitstaff and other service professionals by withholding tips, despite full knowledge that it’s screwing them over. Yeah, he took action, but not to change the unjust system—rather, he cowardly opted out of the loop for the sake of retaining the girth of his own wallet. In Platt’s view, it’s not the servers that are suffering from this bankrupt system, it’s Platt and other privileged diners like himself who are the real victims. He’s so stuck in his own shoes, that he fails to grasp the forces that actually make tipping an unfair system. He writes:

Never mind that studies have shown that tipping rarely results in better service (if you want the royal treatment, tip very, very well before dinner or while checking into your hotel) or that it’s arguably racist (studies have also shown that nonwhites make less in tips) and sexist (women make better tips than men, but, according to a report by the Restaurant Opportunities Center United, 90 percent of them are harassed for their trouble).

For Platt, it’s the act of tipping that is prejudiced and to blame for the mistreatment of workers rather than the people who are in charge of doling out either tips or wages.

Another article in the Grub Street series seemed like something of an apology for Platt’s snobbery and nearsightedness. “We Are The 20 Percent” featured first-hand accounts from servers and baristas and bartenders of their take on tips. The piece effectively emphasized that, yes, you should definitely tip for that latte and still leave at least 20 percent, even at places as miserable as Bareburger. But it’s Platt’s that seems more indicative of what the mind-set is of a lot of people who are actually, you know, doing the tipping.

It can be frustrating to think about the reigning and sometimes confounding obligation to throw dollars at someone who has resting bitch face, a bartender who is actually a sadist, or perhaps a barista who’s too busy crafting perfect latte art to look up and smile. Sometimes the system doesn’t work, and occasionally you have to tip someone you don’t like. But that’s no reason to dismiss tipping wholesale.

A great deal of, if not most, employers take advantage of the tip system as a way to relieve themselves of some of the financial  burden. There are some exceptions: a few owners believe in paying fair wages. But this is rarely the case beyond the realm of exceedingly fancy restaurants even in one of the most expensive cities in the world, and it’s still exceptional within it. Platt uses the example of an upscale, successful Manhattan-based restaurant, which he dubs “Buzbie’s,” to demonstrate that service industry workers can earn more than piss pennies, if only they try. Good servers who can keep up with the demands of the fast-paced, soul-sucking service industry AND maintain their dashing good looks and winning smile are compensated well, he points out.

Platt paints a picture of servers as shrewd manipulators, just short of con-men and women, who are adept at tricking people into forking over tips. Instead of being like anybody else who is good at their job, these people are schemers who are really just making fun of EVERYBODY behind their backs. As a former server, I know for sure this is at least partially true. But most industries and professions require that people be at least a little bit deceptive—advertising, banking, real estate, medicine, psychology, law, politics, retail. Ok, so almost everything.

But focusing on upscale dining establishments and their staff of young, good looking part-time actors and actresses leaves a lot to be desired. What about discrimination in hiring practices? These well-tipped positions serving the well-heeled are not just extremely competitive but also few and far between, even in a place like New York City. What about the restaurants with terrible food and terrible customers or cheap food and not filthy rich patrons? How do workers under the current tip system fare under those conditions?

Well, I found out a few weeks back when I sat in on a Wage Board meeting in Harlem. I watched as industry veterans, restaurant owners, and representatives of food service interest groups from across the city took turns testifying about the sub-minimum wage. The divide between white men and people of color, women, and immigrants was striking. By and large it was white men in positions of power who were the property owners and lobbyists arguing against an increase in the sub-minimum wage.

Meanwhile, immigrants, like Jose Sanchez, who has delivered pizza for Domino’s for four years and earns $6.40 an hour, argued the system was unjust. “Supposedly the tips we are given should make up the difference, but the reality is something very different,” he told the board. “It should be the employer’s responsibility and not the client’s to pay a fair wage for their workers.”

Women of color, like Nikama Jones, a server who has worked in the restaurant industry for 15 years, argued that sub-minimum wages left them feeling insecure about their finances. Alejandra Madriaga, a Mexican immigrant who’s lived in Corona, Queens for 14 years, said she once worked full-time as a cashier at a restaurant where she took home $180 a week plus tips, but often her daily tips would add up to just $10.

There were dozens more examples just like these.

The reality is that the workers who suffer under the tip system, as it currently stands, are those employed at establishments that don’t offer complimentary champagne baths for visiting teacup poodles, and where dousing some old chatty bat in Chenin Blanc to ensure a decent tip isn’t really an option.

In New York, restaurant owners can pay their service workers as low as $5 an hour, provided that employee earns at least $3 an hour in tips. Workers must be making at least $8 an hour, but $3 of their tips can be applied to meet that minimum. So for an eight hour shift, servers and bartenders can take home as little as $64 (before taxes), which we all know would buy you maybe a week’s worth of groceries if you survive solely off snacks you can purchase at your local bodega.

While just seven states require employers to pay their workers the state’s minimum wage regardless of tips earned, the vast majority of states permit employers to pay their servers less than the state minimum wage, and sometimes far less. The bottom line is the federal standard minimum wage for tipped workers: $2.13 an hour. This regulation assumes that the rest of the $7.25 an hour minimum wage will be made in tips. If not, employers are supposed to pay the difference. But according to testimony at the Wage Board hearing, lack of compliance is rampant.

When servers at less elite establishments and crappy diners (who are more than likely to be immigrants, people of color, women) take home a few dollars—or sometimes nothing—after a slow day, a bad day, or maybe just an average day, they get totally screwed by this system. And it’s the sub-minimum wage system that puts the burden on servers and the served to figure it out. But the solution isn’t to stop tipping.

Simply requiring restaurants to pay their employees a decent base wage would address many of these issues. Sure, employees at low-end restaurants still wouldn’t receive great tips, but they would at least be able to earn a living wage without them. In general, workers wouldn’t have to rely so heavily on tips, customers wouldn’t have to feel morally or economically obligated to tip (in the same way), and some workers wouldn’t have to trade dignity for tips. Sure, much of this doesn’t apply to fine dining establishments, but regulations like this aren’t usually made to serve the privileged, they are there to protect vulnerable workers. 

Sure, if everyone in the world is a terrible person this still might not work out so well: maybe servers would have no reason to be on their best behavior if they could earn a decent living without have to flirt with creepy dudes or wipe old lady butts, and customers would have no reason to tip at all if they were assured that servers weren’t impoverished. Or, you know, maybe everyone would still act humanely toward one another anyway because not everyone thinks like Adam Platt. (We can always dream.)

People don’t just tip because they feel the need to provide for someone or are aware they are in control of someone’s earnings. Many people tip because they appreciate when servers do a good job, and make going to a restaurant a worthwhile—even special—experience. Tipping doesn’t have to disappear, after all, just because employers should be required to pay their workers a living wage. Tipping can continue, but it should live on in a form that makes everyone feel better about the system to which they’re contributing, on both ends of the equation.

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