Understanding the ‘Tipped Minimum Wage’: Critical Directions for US Policy Research

Abstract

With the ‘gig economy’ moving to the forefront of research on service labour, interest has heightened in the techniques of labour control that reproduce it. Taking tipping as just such a technique, this article explores critically the policy research around ‘tipped’ employment in the United States. In the United States, tipping is a legally recognised form of labour remuneration that informalises the wage relation, incentivises the worker in precarity, and internalises social relations of subordination. Understanding tipped work, its legal status, its operative logic, and the contradictions that arise within its framework, is a priority for relevant social policy analysis. The aims here are: 1) to set out the ‘topography’ of the policy landscape on tipping in the United States; and 2) to problematise the current scope of this policy literature in societal terms. This research will focus on the restaurant industry, but will establish its broader societal significance.

Service Labor, Freedom, and the Technique of Tipping

“…Crucially, tipping is not just a marginal supplement to a regular waged income, as one would find in other societies such as in Europe, but the primary source of income for most restaurant workers, which currently stands at about 3 million workers across the United States (U.S. Bureau of Labor Statistics (USBLS), 2018, 2019a, 2019b). Tipping becomes a way to reduce further the low-wages of service labor within capitalist accumulation imperatives (Ross and Welsh, 2021).…”

“…However, the quality of service does not necessarily or proportionally effect the tip given in practice (Azar, 2007(Azar, : 1924(Azar, -1925, and service quality is contextually dependent upon a range of variables, from the type of establishment or disposition of patron in question to the cultural mores and economic conditions of the geographical area. The other aspect to tipping, often not discussed, is that it allows restaurant owners to pay their workers a lower wage (Ross and Welsh, 2021).…”

“…So, how does tipping fit into this tableau? At its simplest, tipping is the practice of paying for personal services directly to the server according to the purchaser’s immediate proclivity in the context of a culturally determined social code, rather than a formally fixed tariff, price, or schedule paid to employers of service labor (Archibugi, 2004; Ross and Welsh, 2021). In the United States, tipping is a customary and ubiquitous practice across numerous service industries, which often are already low-paid, female-dominated, and reliant on immigrant labor.…”

“…Bureau of Labor Statistics (USBLS), 2018, 2019a, 2019b). Tipping becomes a way to reduce further the low-wages of service labor within capitalist accumulation imperatives (Ross and Welsh, 2021).…”

“…It is against this discursive and ideological backdrop that groups like the Restaurant Workers of America (RWA, 2020), an organization that fights to maintain tipping and the ‘tip-credit’ system (Ross and Welsh, 2021), can therefore claim a commitment ‘to preserving the freedom and flexibility of America’s restaurant workers’ in their eagerness to embrace the spread of tipping. Similarly, articles discussing the pros and cons of tipping on trycake.com and on the National Restaurant Association (NRA) website point to the ‘flexibility’ and ‘earning potential’ that tipping makes possible for tipped workers (Cake, 2019; NRA, 2019).…”