Amid Another Debate over a Local Minimum Wage, a Question Seldom Asked: Why Not Get Rid of Tipping Altogether?

By Callaghan, Peter | MinnPost.com, March 5, 2018 | Go to article overview

Amid Another Debate over a Local Minimum Wage, a Question Seldom Asked: Why Not Get Rid of Tipping Altogether?


Callaghan, Peter, MinnPost.com


A year ago, the loudest argument in the debate over creating a local minimum wage in Minneapolis was over tips. Now St. Paul is looking to institute a local minimum wage, and again the loudest argument is over tips.

And while those who want all workers to be on the same wage scale — a campaign its backers are calling One Fair Wage — many tipped workers in the restaurant industry fear that without a tip credit, they might lose their tips, their jobs — or both.

The St. Paul City Council is expected to resolve the dispute by this fall. But somewhere beneath the rhetoric is another topic that hasn’t generated nearly as much conversation: tip culture itself. That is, the strangeness of having one class of worker — restaurant servers and bartenders — receive so much of their pay not from a boss but directly from the customer.

After all, if tipping is connected to the social ills that opponents of a tip credit argue it does — from a troubling racial history to the encouragement of sexual harassment — how does a system that retains tipping in restaurants address those issues? Shouldn’t the argument be over getting rid of the practice of tipping altogether?

The local debate

Tip credits are a way of setting a lower hourly wage for tipped workers with the idea that they’ll make up the difference in tips. While Minnesota is one of seven that doesn’t have a tip credit in its state minimum wage, a local minimum wage could allow restaurants to require servers to count their tips to make up the difference between the state minimum hourly wage of $9.50 and whatever wage the cities require. Under this system, if tips were not adequate to fill the gap, the employer would be legally obligated to cover that difference.

Restaurant owners and many of their servers argue that the margins in restaurants are so narrow that owners might not be able to remain profitable if they have to start tipped workers at the higher hourly rate. They also say the bigger issue is getting so-called back-of-the-house workers — cooks, dishwashers and other non-tipped staff — higher pay, not servers, many of whom who do plenty well with tips.

In fact, full-service restaurants would likely have to pay servers well above minimum wage in order to keep their best producers, though their pay would likely be somewhat less — though more predictable — than they could make with tips added in.

Opponents of the tip credit, however, say not all servers do as well as those in higher-scale restaurants. They also point to instances where owners do not make up the difference or where tipped workers are assigned to tasks where tips are not generated, yet still get the lower hourly wage.

Arguments pro and con were evident during the debate over Minneapolis' local minimum wage. The politics of the issue made it unlikely council members would support a tip credit, but the fact that Minnesota does not permit a tip credit in the state minimum wage law was the primary reason that city staff recommended that no tip credit be included in the city ordinance.

If St. Paul follows Minneapolis’ lead, a move that would put pressure on other cities in the region to follow suit, would a move away from tips ultimately be the result?

The politics of tipping

For backers of One Fair Wage, who oppose a tip credit, the politics of the issue are complicated. While they might wish for a world without restaurant tips, they’d rather not talk about it all that much.

That’s because the threat of a loss or reduction of tips is one of the motivating factors for the restaurant workers who’ve organized in favor of city tip credits. And anything that exacerbates the fear of lost income for restaurant workers hurts local minimum wage backers, a group that in Minnesota has been led by the Restaurant Opportunities Center, $15 Now, and unions such as the Service Employees International Union.

During a presentation in St. Paul in January, Saru Jayaraman, cofounder of the Restaurant Opportunities Center and director of the Food Labor Research Center at the University of California-Berkeley, acknowledged the contradiction in one-wage camp. …

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