I happened to turn the TV on the other night, and caught the tail end of a discussion about the proposed minimum wage hike to $15 an hour. Although I tend to think that’s a bit high across the board, I was blown away the existing federal minimum wage - not the whopping $7.25 an hour, but the ‘server’, or ‘tipped’ minimum wage. Did you even know that there was a separate ‘server’, or ‘tipped’ minimum wage? I didn’t.
Getting straight to the point, the current federal ‘tipped’ minimum wage in $2.13 per hour. And yes, some states actually still pay that. You can probably figure out which states without much difficulty.
While many states, such as California, pay the state minimum wage plus tips, we are the exception and not the rule. (1) Fifteen states, including Texas and the Carolinas adhere to the $2.13 federal minimum wage. As mentioned earlier, some of the states I could’ve pretty easily guessed - like Alabama, Mississippi, Louisiana, Georgia and Texas. I might’ve correctly added Arkansas and Oklahoma too.
What a lot of us don’t know, aside from the pittance for pay, is that the ‘service’ industry and ‘tipping’ is rooted in American history, more specifically the transitioning of slavery. Tipping entrenched racialized class structures in service jobs where workers had to work tirelessly to please both the customer and the employer to earn anything at all. A journalist quoted in Kerry Segrave’s 2009 book, Tipping: An American Social History of Gratuities, wrote in 1902 that he was embarrassed to offer a tip to a white man. “Negroes take tips, of course; one expects that of them—it is a token of their inferiority,” he wrote. “Tips go with servility, and no man who is a voter in this country is in the least justified in being in service.”(2)
The immorality of paying an insufficient wage to workers who were forced to rely on tips, has been known for years. In his popular 1916 anti-tipping study, The Itching Palm, writer William Scott described tipping as an aristocratic custom that went against American ideals. “The relation of a man giving a tip and a man accepting it is as undemocratic as the relation of master and slave,” Scott wrote. “A citizen in a republic ought to stand shoulder to shoulder with every other citizen, with no thought of cringing, without an assumption of superiority or an acknowledgment of inferiority.” Research also shows that tipping itself has a racial component: Customers generally give white workers bigger tips than black workers, regardless of service quality. Thanks in part to segregation within the industry and discrimination from patrons, restaurant worker poverty rates are highest for women and people of color. (3)
In 1966, the federal minimum wage law was expanded to cover tipped restaurant and hotel workers, but that expansion came with a caveat: It allowed employers to pay tipped workers a lower wage so long as their tips made up the difference. Then in 1996, the National Restaurant Association struck a deal with President Bill Clinton: In exchange for a minimum wage increase, the tipped wage was frozen in place at $2.13 an hour, where it remains today. Beyond the obvious financial struggle of making such low wages, research has linked the tipped wage to higher levels of sexual harassment and poverty for employees. (4)
Wage theft is particularly acute in food and drink service, and restaurants across the country have been found to be in violation of wage and hour laws. It is true that the law requires restaurants to ensure that tipped workers receive at least the regular minimum wage when their tips are included, but the reality is that huge numbers of restaurants—helped by too-weak enforcement efforts—ignore these requirements. In investigations of over 9,000 restaurants, the U.S. Department of Labor (DOL) found that 84 percent of investigated restaurants were in violation of wage and hour laws, including nearly 1,200 violations of the requirement to bring tipped workers’ wages up to the minimum wage. (5) And the market is only getting bigger. Projections estimate that ‘tipped’ worker positions will be among the fastest growing markets over the next several years. (6)
Most of the conversation now are around increasing minimum wage across the board, including server wages. That being said, there’s big money that wants to keep the server minimum wage just where it is - at $2.13 - like, for example, the powerful National Restaurant Association and Darden Group (Olive Garden, LongHorn Steakhouse, Yard House) (7) - and they’re ready to fight - and they have the money.
I remain confident, however, that with the power and voice of social media, change is coming soon. It has to. I’m not sure that the nation could absorb a $15 hourly minimum wage across the board - not sure it even makes sense - but I do think something around the $10 range sounds like it could work. I’ll leave it to the number crunchers to figure that one out. The one thing I do know is that nobody should be working for $2.19 hourly in 2021, tipped or not.
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