The topic of tipping has generated intense debate lately as an increasing number of restaurants impose “service charges” on top of regular bills.
These are fees that may (or may not) go to servers, but are separate from tipping, which is also often expected or customary.
I like tipping. A hearty tip may not mean much to my weekly budget but can make a big difference to a hard-working server.
But I believe debates over tip sizes are largely exercises in distraction.
The real issue is that the restaurant industry still uses an antiquated wage system that relies on the generosity and whims of customers to ensure that workers get paid properly.
Most industries don’t work like this. Think about it.
Your family accountant doesn’t have to hustle and smile to get you to pay her full tax-prep bill. Your auto mechanic doesn’t have to flirt or ensure you like his work to get you to pay 100% of his fee. And your cable provider doesn’t have to be pleasant — or, heck, even provide consistent service — to demand full payment.
Only in the service industry does the federal government allow employers to pay workers below minimum wage — as little as $2.13 an hour — and then hope customers will make up the difference.
The feds have even come up with a bizarre phrase to describe this sub-poverty pay — a “subminimum wage.”
The argument, of course, is that tips are expected to lift hourly rates up to a legal level. But here, we have another contradiction — expected gratuities.
By its very definition, a gratuity is “something given voluntarily or beyond obligation usually for some service.” Yet in the food-service industry, these “voluntary” payments are actually required in order for workers to earn a legal wage.
Theoretically, an employer is supposed to guarantee a real minimum wage by making up the difference if a server doesn’t earn enough in tips. But it doesn’t always work that way.
Tipping should be on top of a guaranteed fair wage.
A few states have decided that subminimum wages are nonsense — that everyone deserves the same guaranteed minimum wage. And studies have shown that workers in those states are far less likely to live in poverty and that the restaurant industry there still thrives.
But most states allow subminimum wages, with the impact most noticeable in hospitality-based economies like Orlando’s — which often ranks dead last among major metros when it comes to median wages.
(It’s not really complicated, is it? If you have a higher percentage of workers making subminimum wages, you’ll have a higher percentage of workers struggling to make ends meet.)
Now, it’s certainly true that some people in tipped jobs make spectacular livings — six-figure salaries and more if the job and clientele is right.
But that’s not the norm, especially in restaurants. In fact, the Leadership Conference on Civil and Human Rights reports that “tipped working people experience nearly twice the poverty rate (12.8%) as non-tipped working people (6.5%).”
Put this all together and, in some ways, it’s understandable and even laudable that some restaurateurs are looking for ways to beef up workers’ paychecks through “service charges.”
But it seems a lot more straightforward to just put that cost in the price of the meal.
To that end, many patrons could also use a wake-up call about the real cost of goods and living in 2024. You can’t expect one person to purchase ground beef, another to cook it into a burger and yet another to serve it to you with a side of crinkle-cut fries — all in a building that has a pricey lease, utility bills and rising insurance costs — for $7.95.
The restaurant business is a tough one, filled with people who work long hours and cater to diners who watch prices. That’s how we end up playing games with “service charges.”
In Las Vegas, another tourist town, restaurants have started tacking on all sorts of fees, calling them “concession fees” or “franchise fees” as a way of pulling in extra revenue while keeping menu prices lower.
There are also ugly aspects to tip-based wages, including the concept’s post-Civil War roots when many business owners didn’t want to pay freed slaves anything at all. Plus, there are inequities in gender, since way more tipped workers are women.
The whole system would work more transparently for consumers and more justly for workers if the price of covering all of businesses’ expenses — and providing workers with fair wages — was just included in the price of the meal.
When I took to social media to ask people how they believe servers should be paid, a surprising number said: Just put it in the cost of the meal.
“Just tell me what the meal will cost,” said Karen.
“End tipping,” said Jack. “Pay a living wage and benefits.”
Personally, I don’t want to end tipping. I still like expressing appreciation for good service. But that should be in addition to a fair, living and legal wage.
Let’s stop making hard-working servers dependent upon the whims of tourists and diners to earn a full, fair wage. Let’s understand that, if we’re dining out, there’s a cost. And let’s stop using ridiculous concepts like “subminimum wages” to try to make the whole system sound more legitimate than it is.
Scott Maxwell is a columnist for the Orlando (Fla.) Sentinel.