One of the most frequent questions expats in the United States find themselves asking is simple: Why am I expected to tip for services? Tipping in the US has a relatively short history, and its necessity is linked to the wage laws surrounding workers, particularly servers, in restaurants. In the US, it is considered polite to tip at least 10% of your overall bill, even if the service was poor. If the service met your expectations, 20% is expected. If the service was exemplary, it is acceptable to tip 25-30% or more. While it may seem utterly ridiculous to have to tip even if your service was poor, there’s a reason behind it.Servers are paid less than minimum wage
Restaurant servers and bartenders in the US are legally paid less than half of the national minimum wage. The current national minimum wage for servers is $2.13 per hour (as opposed to the national minimum wage for all other workers, which is $7.25 per hour), and restaurants are under absolutely no obligation to pay their servers anything above that minimum legal wage. How it came to be this way is a long story, but can be summed up by looking at the National Restaurant Association, a group which represents food corporations and lobbies their interests in Congress. It’s courtesy of the National Restaurant Association that servers are paid so little.
In 1938, Congress passed the Fair Labor Standards Act to regulate minimum wage and other labor practices. From 1938 to 1966, the minimum wage was the same for tipped and non-tipped workers. In 1966, the National Restaurant Association was able to convince Congress that tipped workers should have a lesser minimum wage, and the Fair Labor Standards Act was amended so that tipped workers could be paid 50% of the federal minimum wage. While this was certainly less than ideal for tipped workers, the tipped minimum wage was still meant to grow with the federal non-tipped minimum wage. This all changed in 1991.
Due to the lobbying from the National Restaurant Association, Congress passed another amendment to the Fair Labor Standards Act, uncoupling the tipped minimum wage from the non-tipped minimum wage. This effectively stagnated the minimum wage for tipped workers at $2.13 per hour, since it was no longer required for the tipped minimum wage to grow with the non-tipped minimum wage. There has been no change in the tipped minimum wage for almost thirty years.
A server’s paycheck is usually $0.00 per pay period
Because the tax obligations for tipped workers are the same as non-tipped workers, tipped workers usually receive no pay. Their income is dependent entirely upon the tips they receive, as their “paycheck” goes to taxes, insurance, and other federal and state obligations. Because of this, the poverty rate of tipped workers is estimated to be over double that of non-tipped workers.
The United States is the only developed nation that allows for servers to be paid less than minimum wage, which makes the expectation of tipping difficult for many expats to understand. It is the obligation of the company, not the customers, to supplement proper income for its workers. The problem with this is, as previously discussed, that companies band together in order to prevent that from happening. Additionally, lobbyists have convinced Congress that forcing companies to pay an appropriate wage would cause economic disaster, despite evidence to the contrary.
Some tipped workers have banded together in order to lobby their own interests in Congress. They are poorly funded, but their arguments against the stagnation of tipped minimum wage are continually gaining traction in the United States political system. For the time being, however, tipped workers continue to be compensated less than half of non-tipped workers for their labor.
Resistance to changing the system
Americans are taught from the beginning of their education that anyone can be successful if they just try hard enough, and that those who are not succeeding have failed precisely because they didn’t try hard enough. This can lead to challenging relations between some members of the public and service workers.
Following the logic of the American educational system, service workers are doing their job not because they want to, but because it was the only job they could get. Many people believe that no one would want to work in the service industry. Some Americans see the service industry as inherently unskilled labor and, therefore, see no reason to pay service workers well.
However, service jobs do require specialized skills. Customer service, in particular, is highly demanding and requires patience and emotional intelligence in order to properly interact with clients and produce an exemplary experience. Despite this, service jobs are often devalued as “grunt” work.
Things are changing
As previously mentioned, tipped workers are starting to band together to lobby Congress. Restaurant Opportunities Centers United represents thousands of workers, consumers, and employers. Their primary goal is to improve working conditions for restaurant workers, and they started focusing more on proper compensation in 2014. In response, the National Restaurant Association began conducting opposition research in order to discredit the Restaurant Opportunities Centers United claims that tipped minimum wage isn’t working. However, they have been unable to produce much evidence to the contrary.
In the meantime, customers are still expected to supplement the paltry income of service workers via tips. As the United States continues to change, so too will the expectations regarding tipping and tipped minimum wage. We are already seeing a difference between passive acceptance of tipping and the public wanting to challenge a system that forces customers to tip so that their servers can earn a wage. Required tipping will probably soon be a thing of the past, but until that happens, please kindly tip your server 20%. They hopefully won’t need it for much longer.