The Tip of the Iceberg

Post-pandemic, with conversations on social equity swirling, the history and practice of tipping is reexamined.

To have been a passenger on one of the Pullman Car Company’s opulent railcars was to ride in the lap of luxury. Founded by engineer and industrialist George Pullman in the 1860s, the state-of-the-art cars featured ornate Victorian flourishes, lush carpeting, brocade upholstery, and chandeliers. Patrons dined on gourmet fare and were guaranteed prompt and impeccable service with a smile.

The fact that Pullman, a New York-born Chicagoan, had designed one of his “palace cars” specifically for President Abraham Lincoln would have been at the forefront of many a passenger’s mind. In 1865, Pullman generated plenty of press for his fledgling brand when the body of the assassinated Great Emancipator was transported from Washington, D.C. to Springfield in that very car.

Riders who counted themselves proud Northern abolitionists might have even taken pride in giving a generous tip to one of the formerly enslaved railcar staff. Whether those same passengers were aware that this gratuity was the only compensation the “Pullman porters” might hope to draw while on the job is another matter.

In a 2009 interview with NPR, Larry Tye, author of Rising From the Rails: Pullman Porters and the Making of the Black Middle Class, explained that newly freed Blacks were hired by George Pullman because they were well-trained and would accept whatever wage he decided to pay them.

That wage was nothing, although tipping was encouraged. 

It turns out that tipping historically has been tied to low- and no-wage work. According to Saru Jayaraman, president of One Fair Wage and director of the Food Labor Research Center at UC Berkeley, one of the earliest known examples of laborers working in the hopes of receiving gratuity — rather than an agreed upon sum — dates back to feudal Europe when vassals, or landholders, would award otherwise unpaid serfs with bonuses for a job well done.

It wasn’t until after the Civil War that tipping became a social norm in the United States, as employers in hospitality industries looked for ways to avoid paying newly freed African Americans. 

“It’s the way tips are used by the industry, which is unique to the United States,” said Jayaraman. “It’s basically disgustingly greedy, extreme racialized capitalism that has permitted employers to find a way to not pay people by having them live on tips.”

Since the 1930s, minimum wage legislation has guaranteed a basic level of economic security to working-class Americans — except, that is, for tipped workers. The way tipping works in the United States remains largely unchanged to this day. The federal tipped minimum wage has been stuck at $2.13 per hour for 30 years. Alabama, Georgia, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Nebraska, North Carolina, Puerto Rico, South Carolina, Tennessee, Texas, Utah, Virginia, and Wyoming all adhere to the $2.13/hour required under the federal Fair Labor Standards Act. 

Waging War

Across the country — and locally — conversations around this culturally ingrained practice are shifting. Workers nationwide are demanding change, pushing restaurant owners to rebuild a better industry than the one that was shut down during the pandemic. According to Jayaraman, more than 50 percent of workers nationally are leaving the industry, claiming they will no longer tolerate tips as wage replacement. Several states, including Alaska, California, Minnesota, Montana, Nevada, Oregon and Washington, already have eliminated the tipped minimum wage. Yet even in California, where restaurant workers are paid the full $14 minimum wage before tips, some admit they consider tips to be their primary source of income, and employers’ wages as the bonus.

“Our opening and closing shifts at Barley’s are five to six hours long,” says Madeleine Michaels, an assistant manager at the local craft beer and wine bar, Barley. “Minimum wage at five hours a shift, even if you’re working six days a week, is still not enough to pay rent in San Francisco. In this industry, we’re very dependent on the tips. Tips are an essential part of our income. Sometimes it turns out that my tips are as high as my pay.”

When the pandemic hit last March, and restaurants were forced to close in-house dining, tipping etiquette was reexamined:

Should I leave a tip if I’m not eating in-house? Should I tip extra because times are tough? Am I a horrible person if I give 10 percent instead of 20?

International UC Berkeley graduate student Mohammed B. admitted to tipping differently during the pandemic. “In France, there is a service compris, a flat service charge added to the bill,” he says. “Tipping is exclusively used to reward extra-good service or an overly friendly waiter. I didn’t know prior to my arrival to the United States that at least a 10 percent tip was expected, regardless of quality of service, so I ultimately went with the flow. But now I don’t tip if I’m picking up my food.” 

As customers changed their tipping habits (some opting for more, others for less), Bay Area restaurants experimented with tipless models to offer more benefits and to lessen the pay gap between front-of-house and back-of-house staff. San Francisco’s Zuni Café and Che Fico are adding a 20 percent and 10 percent service charge to diners’ bills, respectively. Other restaurateurs have opted for service-inclusive prices, as seen at Zazie.

Mohammed, who declined to give his last name out of fear he might be judged for not respecting American tipping culture, says a service charge is a more welcome and transparent alternative. “I personally didn’t know that tips weren’t distributed to the entire staff,” he says. “At least with a service charge, everyone gets a cut and customers know how much they’re paying.”

Michaels, however, says tipping is an effective way to ensure top-notch customer service. “I would worry that taking away tips would affect how you provide hospitality,” she says. “When I go to other establishments and don’t receive good service, I shouldn’t be expected to pay the same tip that I would pay when I receive excellent service.”

That’s not to say Michaels doesn’t think servers should be paid better. She just thinks tipping should be left alone, and that minimum-wage policies need to change to ensure restaurant staff earn a living wage.

Pay it Forward

In the aftermath of the pandemic and George Floyd’s killing, a great social reckoning has laid bare myriad systemic inequities, including long-standing problems within the restaurant industry. Yet wage equity is but one of the social justice issues at the forefront of the tipping debate. Research shows tipping — and even tip pooling — creates a power dynamic between restaurant staff and customers, leaving servers vulnerable to sexual harassment and racial profiling. And in the Bay Area, which has one of the country’s widest gaps in earnings between white workers and workers of color in fine-dining restaurants, that’s cause for concern, according to a report published in May 2019 by the nonprofit Restaurant Opportunities Centers United.

“There is now irrefutable evidence that customers have implicit biases,” Jayaraman says. “If it’s a server of color, or a woman of color, data shows that the customer will often tip less. By implementing a set service charge, you remove the implicit biases, and have the opportunity to share with the back-of-house. Equity is not just between the front and back of house; it is also between workers in different segments of the industry, between the women of color servers who work at the Denny’s and the IHOPs, and the servers who work at the Plaza Hotel.”

The restructuring of the restaurant industry post-pandemic presents a unique opportunity for restaurateurs to tackle racial segregation, emphasize diversity both in customer-facing and management positions, and guarantee a livable wage and benefits. However, not all are sold on the idea of adopting a tipless model — even those, like Terey Quinlan, who has worked in restaurants before.

Quinlan, a San Francisco resident, has lived in the Bay Area since the 1980s and takes a nuanced view of the movement to bring more equity to the service industry.

“When my husband and I went to restaurants during the pandemic, we knew how restaurant staff and owners had struggled, so we left a large tip or an extra $10,” she says. “That still continues in this phase of the pandemic.” 

But as restaurants shift towards tipless models, Quinlan has adopted a wait-and-see approach. “I have to watch the rollout in reality,” she says. “There is something to be said that a waiter is developing a profession, in a way. And the back-end jobs are, in theory, entry level.”

While Quinlan, a former waitress, recognizes that some in the service industry may be unfairly prevented from rising from dishwasher to maître d’, she isn’t sure about applying an across-the-board mandatory tip. However, Quinlan adds, she would support uniform service fees if one of the reasons for the charge was to provide health benefits.

Jayaraman hopes that, going forward, customers will challenge themselves to be more receptive to price adjustments and service fees, and more vocal about their support of the movement, so restaurant employees can be paid a livable wage for the Bay Area (one that is much higher than $14 an hour) and receive benefits. “Wherever we eat out, our responsibility is to say ‘I love to eat here, I love the food, I love the service. To me, valuing the people who produce and give me the food means paying them.’”

Sienna Barnes is a contributing writer. Twitter @is_nenaB

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