Discount Tutor

Position Paper

A famous story about Steve Jobs describes his encounter with a waitress working in a Four Seasons hotel. After continually sending back beverages because they were not fresh enough or had too much pulp, Jobs explained to his friend that since she chose waitressing as a career, “then she should be the best.” Though Jobs seems to believe everyone in the service industry chose their career, that is often not the case. Many people could not afford an education, or began working at such a young age that they did not have the time to go to school, so they end up working low-end service jobs, such as the woman in this story. Specifically, waiters and waitresses are treated extremely poorly in the United States work force. In addition to the poor treatment and seasonality of this type of job, the workers’ incomes are often dependent on tips. Though this is not true in all countries, it is the case for many jobs in the American work force, and almost every server position. Due to the seasonality, class bias, and instability of tipping, tip-based salaries should be abolished from the United States workforce, and replaced with a livable hourly wage.

The major problem with tipping is that employers and businesses often use it as an excuse to pay workers an outrageously low wage, and the government allows it by assuming they will be making minimum wage after the tips are included. According to the Huffington Post, “The federal rate for servers in the U.S. is just $2.13 an hour” (Stuart 2014). In comparison to the Illinois state minimum wage, which is $8.25 according to the official Illinois government website, that is over a $6.00 difference. Though businesses and the government assume the workers will be tipped at least $6.00 each hour of work, to earn them a total of minimum wage or higher, that is not always the case, and many employers lie or do not keep record of tipping to benefit their taxes, which ultimately hurts their workers. The unlikelihood of tips equating to minimum wage stems from two causes: ignorance and seasonality. For servers, the managers decide the hours and days they will work, and also divide the restaurant into sections. Each server is then designated a section, and attends to every party that sits at a table within that section. However, as consumers know, each seating option at a restaurant is not equal, so a server’s section will determine their income daily, and there is nothing they can do about it. There is an infinite amount of scenarios that can explain why sections are unfair, but it all ultimately leads to the conclusion that the service industrial is seasonal, so tips are never stable or predictable.

Secondly, many consumers are ignorant to the value that tips have on the servers’ quality of life. A lot of people tip only to reward exceptionally great service, and have harsh criticisms and expectations of those in the service industry, including Steve Jobs. They often fail to take into consideration the amount of work and pressure put on those workers, and many people do not know that without a tip, that worker is only making around $3 an hour. In summary, while a customer may think they are teaching a mediocre server a lesson by not leaving a tip, they are actually pushing them into poverty. In fact, “servers are nearly three times as likely as other workers to experience poverty”, according to an investigation done by CNN (Sheridan 2014). The level of poverty among restaurant servers brings up the topic of the working poor. In a video entitled American’s Working Poor, author David K. Shipler explains, “The working poor include the man who washes a car but does not own one [ . . . ] These are folks who do essential jobs in our economy, and yet are paid very low wages.” Similar to the example Shipler uses, some workers who spend all day serving food are unable to feed their own children, due to the instability of their tip-based salaries.

Classism plays a major role in why tipping needs to be abolished from the United States. It is common practice to tip 20% of your bill, and higher for exceptional service. However, that is unfair to workers who work for low-end brands with cheap food/services that are often discounted. For example, a single mother may accept a position as a server at a low-end breakfast restaurant because it is right by her child’s school, and it closes by 3pm so she is able to pick up her child at the end of the school day. Although she chose this restaurant based on location and convenience for her personal circumstances, cheap restaurants not only have lower bills, but they attract people that do not want to spend a lot of money and are less willing to tip. So, this single mother may make an average tip of 15%, and each bill is around $20.00, while another server is making an average tip of 25% on bills that average out to be $100.00. As stated by an article by Slate, “According to a 2000 study, a customer’s assessment of the server’s work only accounts for between 1 and 5 percent of the variation in tips at a restaurant” (Palmer 2013). It is clear that this difference in income has nothing to do with skills, education, or effort. These workers are merely a victim of circumstance, and that is extremely unfair.

Not only are workers in the server industry victims of classism, but many forms of discrimination can determine the percentage that their customers will tip them. In a lecture in Work in a Globalized World at DePaul University, students were asked if any factors such as gender, race, or class had an impact on a tip we gave or a tip we received in the past. Many people said no, they never discriminated against a worker based on these factors, but often times it is done subconsciously. Some people said they have witnessed older men tipping young attractive girls more due to their appearance, and that they have no respect for women who flirt with their customers in order to gain higher tips. As explained by an article by Slate, “The factors that correlate most strongly to tip size have virtually nothing to do with the quality of service. Credit card tips are larger than cash tips. Large parties with sizable bills leave disproportionately small tips. We tip servers more if they tell us their names, touch us on the arm, or draw smiley faces on our checks. Quality of service has a laughably small impact on tip size” (Palmer 2013). While that is definitely a reality, and one that I have personally experienced, people are not realizing that those tips determine the workers’ income, so many of them will do whatever it takes to earn enough money to pay their bills, pay off their debt, afford their child’s medical expenses, etc. Additionally, according to a lecture about tipping by Professor Martha Martinez, “In the American case, occupations that have traditionally been performed by African-Americans are more likely to have tipping components to them.” Therefore, even if the customer is not discriminatory when it comes to leaving a tip, the overall practice and occupations involved are inherently racist, classist, and prejudice overall.

Despite the countless arguments to ban tipping all together, many Americans still stand by the traditional practice. The arguments that support tipping in the service industry include creating incentive for the workers and the ability for the workers to earn more. First, many people think that knowing majority of one’s income comes from customers will result in treating them better and working harder than someone with a set pay rate. An article published by Yahoo Finance states,” Offering hourly pay in lieu of tips takes the hustle out of the job, since you’ll get paid the same whether you serve one customer or 50, and whether your service is great or terrible. There’s nothing wrong with punching a clock, but it does replace the incentive to maximize your income with the mere duty to show up and make it through your shift” (Newman 2014). Second, it is undeniable that with tips making up majority of workers’ pay, they have the ability to make personal changes that may garnish them more tips, and thus a higher income. They would not have this ability if they had a set pay rate, where it is rare to get raises, especially in service type jobs. Though I can understand the logic behind these statements, it can also be argued that people in non-tipping positions such as teachers, lawyers, and advertisers still go out of their way to think outside the box and get the best results for their students/clients, even though they are not being tipped. Why would the same mentality not apply to workers? Incentive and motivation relies on the individual, not the payment methods. Finally, though there is a possibility to earn more money, it is being overlooked that there is also a possibility to earn less money. When I worked at a restaurant on a golf course that was 50% outdoors, I worked some days in the winter where I did not have a single customer, and ended up making $5.00 an hour. I believe many people would agree with me when I say I would rather have a stable income than the possibility to earn more money.

It is clear that tipping is bad for workers’ in the service industry, customers, and employers. If these jobs had a set pay rate, there would be an end to discrimination and seasonality in this job market. Though there are arguments saying otherwise, they often come from people who have never worked in the service industry, or relied on tips for a living. As someone who waitressed for 3 years, and has a mother who was a waitress for over 20 years, I know the negative impacts that tipping can have on the quality of life of those workers. I urge the United States government to abolish tipping all together, and construct a fair pay wage for individuals in the service industry.

Sources

Martinez, Martha. 2017. Steve Jobs and the Waitress. Personal Collection of Martha Martinez,

DePaul University, Chicago IL.

Martinez, Martha. 2017. Tips. Personal Collection of Martha Martinez, DePaul University,

Chicago IL.

“Minimum Wage Law.” Fair Labor Standards Division, www.illinois.gov/idol/Laws-

Rules/FLS/Pages/minimum-wage-law.aspx.

Newman, Rick. “3 Reasons Why We Should Never Ban Tipping.” Yahoo! Finance, Yahoo. 24

Mar. 2014, finance.yahoo.com/blogs/the-exchange/why-we-should-never-ban-tipping-

173349084.html.

Palmer, Brian. “Tipping Is Bad for Servers, Customers, and Restaurants. Let’s Get Rid of It.”

Slate Magazine, 9 July 2013,

www.slate.com/articles/business/moneybox/2013/07/abolish_tipping_it_s_bad_for_servers_customers_and_restaurants.html.

Sheridan, Patrick M. 2014.“Living on $2.13 an Hour, plus Tips.” CNNMoney.

money.cnn.com/2014/05/05/news/economy/tipped-worker-minimum-wage/index.html.

Shipler, David. America’s Working Poor. Personal Collection of Martha Martinez, DePaul

University, Chicago IL.

Stuart, Hunter. “9 Reasons We Should Abolish Tipping, Once And For All.” The Huffington

Post. 17 Oct. 2014, www.huffingtonpost.com/2014/10/17/abolish-

tipping_n_5991796.html.