AGRAWAL: To tip or not to tip?
Nothing is worse than when a coffee shop barista swivels an iPad screen toward you with tip amounts ranging from 15 percent to 25 percent, and you manually put in no tip.
In this day and age, tipping is a social norm one must adhere to in certain places. The greater the level of skill and experience involved in a service, the more you should consider tipping.
You would think tipping has been around since time immemorial. Digging into its real racist origins, after the Civil War, employers hired low-wage workers, especially newly freed Black men, and encouraged patrons to tip as a way to supplement meager wages.
The Pullman Company institutionalized tipping in the 1860s by relying on tips to pay workers who provided service on railroad cars. Although some saw tipping as classist, businesses favored it to reduce labor costs, and laws prohibiting tipping were eventually repealed.
In 1966, Congress similarly created the tip credit system, permitting businesses to pay employees a wage below the minimum, provided their tips raise their total earnings to above the minimum wage.
This practice of a subminimum wage enabled businesses to reduce their wage obligations, relying on customer tips to make up the difference, turning the concept of tipping into a necessity for workers to earn a livable wage instead of a reward for exceptional service.
In practice, many employers do not always monitor or enforce this rule. Workers are often left to track their own tips and wages, which can lead to underreporting or miscalculation. As a result, some employers fail to pay the difference, leading to wage theft.
Even though wage theft is illegal, enforcement is inconsistent. Workers must file complaints with state or federal labor departments, which can be time-consuming, and employers may try to dispute or delay claims.
Tipping has been a part of the U.S. dining culture for more than a century, and the practice became widespread for employers to shift wage costs onto customers.
With the federal subminimum wage for tipped workers frozen at $2.13 since 1991, these workers are often paid far below what they would need for financial stability without tips, especially since the value of the minimum wage is the lowest it has ever been. Customers' tips essentially fill the wage gap that employers are not paying directly.
Restaurants, particularly small, independent ones, often operate on slim profit margins, and paying all employees the full minimum wage without relying on tips would increase labor costs significantly.
Uber's tipping system has had a similar impact: the company reduced driver pay, expecting customer tips to make up the difference. But, tipping is unreliable and has decreased, leading to lower overall earnings for drivers. As a result, many experienced drivers have left, causing a decline in the overall Uber experience.
There are two ways to address the problem associated with the subminimum tipped wage. The first is an increase in the subminimum wage while still relying on tips to supplement income, which may provide incremental relief for workers. This makes them less dependent on unpredictable tips for their livelihood and provides more reliable earnings, reducing the financial stress from fluctuating tips.
A more stable approach to this would be eliminating the subminimum wage entirely and establishing a higher universal minimum wage. This will ensure that all employees, including those in tipped positions, receive a guaranteed baseline income from their employers, regardless of customer tipping habits. It would shift the responsibility of fair wages back to businesses rather than relying on customers, reducing income uncertainty for workers.
Sen. Bernie Sanders (I-Vt.) has been a strong advocate for the same. He led the Raise the Wage Act, which aimed to increase the minimum wage to $15 by 2025 and eliminate the subminimum tipped wage. While Democrats were unable to pass it through President Joseph R. Biden Jr.'s first stimulus package, the ongoing labor shortage is pressuring the restaurant industry to address its low wages.
Freudian psychologist Ernest Dichter once explained tipping as "the need to pay, psychologically, for the guilt involved in the unequal relationship." I say the real issue is not guilt between customer and worker but a flawed system that offloads the responsibility for fair wages onto the customer when it should be the employer's duty to ensure workers are adequately compensated.
For some relief, etiquette experts say that you are not expected to tip for counter service, professional services like dentists or lawyers and open-bar events. While tips are always appreciated and may lead to better service, these situations do not require one, so save those dollars for where they truly make a difference.
Khushi Agrawal is a sophomore in the School of Arts and Sciences majoring in Cognitive Science and Information Technology and Informatics and minoring in Digital Communication, Information and Media. Agrawal's column, "Scarlet Perspectives," runs on alternate Mondays.
Columns, cartoons, letters and commentaries do not necessarily reflect the views of the Targum Publishing Company or its staff.
YOUR VOICE | The Daily Targum welcomes submissions from all readers. Letters to the editor must be between 350 and 600 words. Commentaries must be between 600 and 900 words. All authors must include their name, phone number, class year and college affiliation or department to be considered for publication. Please submit via email to oped@dailytargum.com and eic@dailytargum.com to be considered for publication.
