As you probably heard already, the House passed a measure this week intended to gradually raise the federal minimum wage to 15 dollars per hour by 2025. This was likely just a ceremonial move intended to get everyone on the record before next year’s elections since Cocaine Mitch doesn’t seem likely to bring it to the floor for a vote and the President has already threatened to break out the veto pen if it somehow makes it to his desk.
But there was one other aspect to the bill that deals with a different question. The measure would eliminate the sub-minimum wage arrangement for tipped workers, primarily in the foodservice and beverage industries. Despite the fact that most wait staff, servers and bartenders hate the idea for a variety of reasons, the Rev. Dr. William J. Barber II has issued a call over at Politico to pass such a measure for a different reason. You see, tipping is racist and has ties to slavery. No… really.
You might not think of tipping as a legacy of slavery, but it has a far more racialized history than most Americans realize. Tipping originated in feudal Europe and was imported back to the United States by American travelers eager to seem sophisticated. The practice spread throughout the country after the Civil War as U.S. employers, largely in the hospitality sector, looked for ways to avoid paying formerly enslaved workers.
One of the most notorious examples comes from the Pullman Company, which hired newly freed African American men as porters. Rather than paying them a real wage, Pullman provided the black porters with just a meager pittance, forcing them to rely on tips from their white clientele for most of their pay.
Tipping further entrenched a unique and often racialized class structure in service jobs, in which workers must please both customer and employer to earn anything at all.
There are plenty more history lessons where those came from should you care to click through. But while I’m sure Reverend Barber has his ducks in a row on that time period, things have changed a lot in the food and beverage industry. First of all, a good gig waiting tables or bartending is one of the few occupations where someone with limited education and few tech skills can make a decent living if they land a spot in a more upscale establishment. It’s not great for everyone and the competition is definitely a factor, but for those who excel it can be lucrative.
Another thing only mentioned in passing in the Politico article is the fact that while employers can pay wait staff as low as $2.13 per hour, if the tips don’t add up to enough to equal the minimum wage the employer has to make up the difference. Granted, some employers have been found violating that rule, but that’s a matter for law enforcement to sort out, not the legislature.
The other factor to consider is explored in great detail in that New York Post article I linked above. The last time New York City mandated a big boost in the minimum wage (including most wait staff), servers and bartenders were laid off in droves. Those businesses operate on too tight of a margin to remain profitable, to say nothing of competitive when they’re suddenly hit with a huge spike in labor costs. That industry in the Big Apple still hasn’t fully recovered.
The more tightly the government tries to control the business decisions being made in the private sector, the more likely they are to topple a narrowly balanced system. This is true pretty much across the board, but it’s exacerbated in the food and beverage industry.