Tipped workers have been in the news a lot lately — from the now-failed Proposition 138, which would have allowed tipped workers in Arizona to be paid 25% less than the minimum wage, to President-elect Donald Trump’s campaign proposal to end taxes on tips.
The Show is shining a spotlight on workplace challenges and how we got here.
Eli Wilson, a sociologist at the University of New Mexico who studies race, work and social inequality, says tipping wasn’t born in America. And it’s rooted in class hierarchy — which still persists today.
Wilson joined The Show to talk more about tipping in America today, starting with its European history.
Conversation highlights
ELI WILSON: I like to differentiate between tipping as a social practice versus tipping as something comes wrapped in a type of employment. So tipping as a social practice, you know, it's the history is a little bit, a little bit unclear. But generally the consensus is it, it is a practice imported from Europe and came over sometime around the mid-19th century from folks, Americans who had traveled and had relationships to European life. And, and sort of imported that custom, brought it back to the U.S. And one thing that's important about that history, at least when I think about it as a sociologist, is that it tells us that tipping as a social practice is one that is inherently rooted in social difference, and also in many ways, class hierarchy, right? That is to say wealthier people are distributing small bits of change for some kind of service from generally people of lower social classes. And it's up till a little bit later that tipping really takes hold as a very clearly understood type of work and labor practice.
Let's talk a little bit then about the the cultural side of that have you noticed a cultural shift in how often we tip today when we're asked to tip, where we're asked to tip? It seems to be kind of driven by the technology. Like this question we all see on the screen when you're checking out wherever with suggested tip amounts.
WILSON: Oh, this is the infamous tip creep, as it has become known. Sure, you know, I'm a consumer as well, and it does seem like tipping has just gone to places that it never was before, even, maybe even a decade ago, right? And when we thought that we immediately need to think about what seems to be driving this change. And I think ... it's very clear that technology, the advent of new technologies, the advent of technologies that are being used in POS, or point of sale, in many settings that that do have tips and that are sort of conducive to customers leaving a tip. We've seen technology kind of fuel that spread, but it's also very important to remember who's behind the technology. And I don't necessarily mean the companies that own that technology. I'm talking about business and business owners that are using these technologies in ways that are favorable to their business, right?
So when we talk about tip creep, we have to think about whose interests are being, sort of, met by the spread of essentially customers paying more and more money to workers in the form of tip. That looks very different from say, wages being paid to the same workers.
How many workers in the U.S. rely on tipping to make a living wage, to survive — as in, that is the way in which their pay structure is set up?
WILSON: Sure. Well, you know, it's a little tricky to estimate if you can imagine, because tipping has historically been a kind of gray area. There was once a time not that long ago where one didn't need to report tips, for instance. But right now estimates are about 4 million ... tipped workers last time I checked.
Talk a little bit about how the laws around that have changed recently. There are political efforts, it seems, on both sides. We're seeing an initiative here in Arizona that's spearheaded by the Arizona Restaurant Association. It would essentially lower the amount restaurants have to pay tipped workers as long as their tipped salary ends up above the minimum wage by a couple of dollars. Do you see efforts like this around the country? Is this a common kind of battle we're seeing?
WILSON: Well, let me take us back a little bit further to begin. You know, thinking about the tipped minimum wage or just the minimum wage in general ... so this was the the famous FLSA — that's the Fair Labor Standards Act — passing the early 20th century that really protected workers and established the minimum wage that, of course, employers had by law to pay. And what was interesting for the purposes of our conversation is right there during this kind of watershed moment for labor and those in the FLSA passing, there was a carve out — something that was not included in that minimum wage — for people working for tips. And so this, the legacy of this sort of these carve outs and exceptions for tip workers, continues on to today. So we talk about what's, what's often times known as the tipped minimum wage rules, that would essentially be a lower minimum wage that employees are legally allowed to pay to workers if they make a certain threshold. And usually that threshold is $30 a month in tips. They can be classified as a tip worker and paid less by law, from their employers. And the thinking is that tips would make up the difference. So there's always been this kind of two-tiered nature of minimum wage. And that's been kind of on the books for a little over 100 years.
