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Student Life

To Tip Or Not To Tip: Should Customers Decide An Employee's Salary?

Should we trash tips and raise the minimum wage? Who would pay for it?

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Server

Samantha Davison and Julianna Richards both relied on tips to pay their bills and fund their education, but unlike Davison, Richards struggled with low wages and inconsistent tips.

Davison found luck with large tips from waitressing family-filled tables on busy nights at The Good Steer. But Richards's tips went into a tip jar, which is split between employees, and rarely reached $200 by the end of a busy day.

While tipped workers do have the possibility of making more than the minimum wage, many people in the growing service industry still struggle to pay their bills because of unpredictable tips. When many tipped workers such as restaurant servers can be paid at a lower rate than the minimum wage, an employee's salary is found in the wallets of the customer.

"Even when I was receiving tips, it wasn't even close to the amount that I was making on actual salary," Julianna Richards, a student who has worked on both a tipped and non-tipped salary said. "It's just too inconsistent."

The Economic Policy Institute says that about 4.3 million Americans, about 2.8% of the total workforce in the United States, rely on tips to make a living. The Census Bureau found that raises in minimum wage help low-income workers in the short and long term. Increasing the minimum wage would improve the quality of living and public health for impoverished workers and could possibly reduce government expenses for social programs which could lead to lower taxes for Americans.

But opponents say that raising the minimum wage could prompt employers to lay people off, hire less, and even start replacing human resources with technology or machinery.

After Amazon raised the minimum wage to $15 per hour for its workers, Sen. Bernie Sanders announced plans to raise the federal minimum wage to $15 per hour, and states like Arkansas and Missouri recently raised their state minimum wages, the pressure is high to give service workers higher base salaries.

While some businesses are starting to get rid of tips and raising their employees' salaries, many workers in the service industry still rely on tips to survive.

Davison, a student at Stony Brook University, worked as a waitress for four years. She doesn't receive any financial support from her parents, so she relied on waiting tables to put herself through college.

Davison said she has had her share of unfair tips, but she recalls many good tippers, including a family at an engagement party that gave her $200 on top of the automatic $80 gratuity in the bill.

Because she worked in a restaurant frequently visited by families and many of the customers knew the restaurant staff, she thought her tips were substantial. But the money she made was still unpredictable.

"There were nights when I needed to make a certain amount of money to pay a bill and it was so disappointing if I didn't," Davison said.

On nights like those, Davison wished for a higher and more reliable fixed salary.

Richards has worked as a non-tipped employee at Dumpling Daughter and as a tipped employee at The Dapper Doughnut in Massachusetts. She said that she preferred her job with a higher salary with no tips instead of her tipped job.

She said, "At my tipped job, I would work about 20 hours a week and get about $35 in tips each week."

Richards said it was more worth it for her to be paid a fixed salary rather than face unreliable paychecks.

But Peter Caprariello, a marketing professor at Stony Brook University, said that tipping makes economic sense for businesses. "Tipping allows businesses to bypass standard minimum wage practices and rely instead on the lower-tiered minimum wage, which is federally mandated but is substantially lower than standard minimum wage."

And if the minimum wage for tipped workers was raised, the issue of who is going to pay for it becomes a concern.

Caprariello said that with more money in the consumer's pocket, he should theoretically be able to spend more on food or merchandise. But this doesn't work out, he said, because "it takes the same amount of food to make me feel full without tipping as it did with tipping."

However, some restaurants and services have made tipping optional or gotten rid of tipping altogether.

Manual London, a management professor at Stony Brook University, said, "In some other countries, like France, tips are included at restaurants and patrons can leave an additional small amount if they wish."

He said, "Some restaurants in the United States are experimenting with including tips in the bill and raising service workers' salaries."

The Economic Policy Institute says that in states where restaurants can pay federal tipped minimum wage of $2.13 per hour, 18% of waitstaff and bartenders are impoverished. These service workers live in poverty at more than twice the rate of non-tipped workers in the same states.

Raising the minimum wage and possibly getting rid of the tipped minimum wage, like last year's Raise the Wage Act proposed, could increase worker productivity and give service workers a more secure salary.

Nicole Meisner, who has worked as a host and server at Friday's, would prefer to have a fixed salary because she's had too many bad experiences with unfair tipping.

Meisner had to tip out to the restaurant's bussers and give up 3% of what she made. Even if a table tipped her nothing, she would still have to tip out.

She said, "In other words, I now owe someone else money that I didn't even make off of the table."

Will raising the federal minimum wage for tipped workers improve the lives of millions of service workers? Or will it hurt businesses and prevent servers from making big tips? With pressure on the federal government by organizers and politicians like Sen. Bernie Sanders to take action, workers will have to wait and see.

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This article has not been reviewed by Odyssey HQ and solely reflects the ideas and opinions of the creator.
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