As a result of this legacy of slavery, when we tip at restaurants, our tips subsidize what restaurant owners are obligated to pay their workers. The tip is not what most diners intend it to be—an extra thanks on top for great service. Rather, because of the subminimum wage for tipped workers, those tips actually pay restaurant workers’ wages. While a minuscule percentage of servers at fine dining restaurants and busy steakhouses are able to earn many times the minimum wage with their average tips per hour, the overwhelming majority of tipped workers are women, disproportionately women of color and single mothers, who work at casual restaurants, diners, and dive bars where they earn very little in tips regularly—and even less when they work a graveyard shift. While federal and many state laws require employers to make up the difference with the minimum wage if tips fall short, few actually do so. In fact, one study by the U.S. Department of Labor in 2012 reported that 84 percent of full-service restaurants have violated the laws surrounding the two-tiered wage system for tipped workers.
Indeed, wage exploitation is not the only injustice that the subminimum wage for tipped workers creates. Because of these systemic poverty wages, restaurant workers rely on food stamps at twice the rate of workers in other industries. In addition, Black workers are routinely tipped less than white servers, accounting for the fact that, nationwide, Black women restaurant workers earn $5 less an hour than their white male counterparts. The most universally experienced injustice is that women restaurant workers experience sexual harassment at the highest rate of any industry in the country because they must tolerate inappropriate customer behavior to feed their families in tips. These and other injustices are magnified by the reality that restaurant workers are disproportionately women of color, and in many cases immigrant women of color.
With the COVID-19 pandemic, the injustices faced by restaurant workers became unlivable. With the initial pandemic shutdown in March 2020, 6 million restaurant workers lost their jobs; two-thirds of these workers reported that they were denied unemployment because states told them that they did not earn enough to qualify because of the subminimum wage for tipped workers. When they returned to work in restaurants in the summer and fall of 2020, a majority of workers reported that restaurant work grew simultaneously more dangerous and demanding at the same time that rates of tipping declined. More than half of women workers also reported that sexual harassment increased, with hundreds of women reporting that they were regularly asked to remove their masks so that male customers could judge their looks and their tips on that basis. When they were asked to enforce COVID protocols on the same customers from whom they had to get tips to survive, these workers reported being tipped less, screamed at, and even physically attacked—and they started to leave the industry in droves. Over 1 million workers have left the industry since the pandemic began, and the restaurant industry continues to face the worst staffing crisis in its history. Over 60 percent of workers who remain have reported that they are leaving the industry, and nearly 80 percent have reported that the top factor that would make them stay or return to working in restaurants is a full, livable wage with tips on top.
In response, there has been a historic change in the marketplace. The organization that I lead, One Fair Wage, has tracked over 5,000 restaurants in the 43 states that allow a subminimum wage and that have voluntarily raised wages, transitioning from paying a subminimum wage for tipped workers to paying a full minimum wage or even higher. In some instances, we have noted 1,000 percent wage increases, from paying the subminimum wage of $2.13 an hour to offering $20 or even $25 an hour plus tips. Leaders in our “high road” employer association, RAISE, have noted that, while they are raising wages across the country to recruit staff, they cannot do it alone. They need a policy that will end the subminimum wage for tipped workers to create a level playing field so that all restaurants must raise wages to recruit staff. They have also noted that they still do not have enough recruits even with higher wages; they note that policy change to raise wages would signal to millions of workers that wage increases will be permanent and that it is worth coming back to work in restaurants.
