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Last November the Trump administration flagged up that it wanted the law changed so that owners of restaurants, bars and hotels in the US could decide what to do with workers’ tips, including keeping 100% of them if they wanted – and irrespective of customers’ wishes. After an enormous ruckus, with more than 350,000 people registering their opposition online, the omnibus spending bill passed in Congress does the opposite – it bars employers from keeping all the tips. Which is a gigantic relief for waiters and waitresses, bellhops and hotel cleaners, car valets and many others. They could have lost up to $6 billion a year, if they couldn’t keep their tips - and 80%of that, it is reckoned, would have been lost by women. So everything’s OK now, right? Not exactly.
Firs, let us note that it wasn’t exactly a gigantic surprise that a president who owns vast hospitality businesses should have thought it natural for the bosses to keep the tips. But even if his proposed law change went down the tubes, the whole system of tipping reveals a lot about coercion, poverty and low pay in neoliberalism. And how tipping is being used to extend the ‘gig economy’, where workers are forced to become allegedly self-employed, and thus don’t get paid holidays, pensions or any other benefits – as for example in the UK, where many hairdressers don’t get paid, but have to hire a chair for the day and survive on the tips.
Enforcement of any rules that workers can keep the tips will be very difficult. Especially if clients pay by credit or debit card and include the tip on that payment- normally the owners will keep it. (So never put the tip on the card, give it to the workers in cash). In the UK, I don’t know about elsewhere, lots of restaurants include a ‘service charge’ on the bill which almost certainly owners keep, which discourages customers from leaving a tip in addition. The logic of this is in any case ridiculous – you pay once for the food, and then again to have it delivered to your table!
Many restaurant owners use the excuse of low profit levels. That excuse couldn’t possibly apply to top restaurateurs like Michel Roux, who admitted in 2016 to keeping all the tips, despite the £212 per person fixed menus charge, at his La Gaveroche restaurant in London’s Mayfair. But in these difficult times of austerity, there are indeed many small businesses, including restaurants, operating at the edge of insolvency. Nearly 1000 went bust in 2017, as against 825 in the year before. Of course if owners of these establishments try to keep all the tips, or a significant part of them, they are trying to solve their solvency problems at the expense of the workers. The real cause of economic difficulties for restaurants are partly the squeeze on retail caused by austerity, but particularly the massively high levels of rent and overheads, like council tax in the UK and utility charges. Most big shopping malls in the UK are owned by finance companies who care nothing for diversity in shopping centres, and everything about short-term profits. Businesses will only get into those malls, or can only stay there, if their profit levels permit paying gigantic rents.
A few years ago American waiter Chelsea Welch described her horrible working situation as follows in a UK newspaper:
“We make $3.50 an hour. Most of my paychecks are less than pocket change because I have to pay taxes on the tips I make. After sharing my tips with hosts, bussers, and bartenders, I make less than $9 an hour on average, before taxes. I am expected to skip bathroom breaks if we are busy. I go hungry all day if I have several busy tables to work. I am expected to work until 1:30am and then come in again at 10:30am to open the restaurant.
“I have worked 12-hour double shifts without a chance to even sit down. I am expected to portray a canned personality that has been found to be least offensive to the greatest amount of people. And I am expected to do all of this, every day, and receive change, or even nothing, in return.” (1)
What Chelsea Welch was arguing here was that you should indeed give a tip, because workers depend on it. A friend of mine who recently ate in a San Francisco restaurant told me that the expected level of tipping there had gone up from 15% a few years ago to 25%. And when he went to the toilet before leaving, a waiter stood outside to make sure he didn’t run off without leaving a tip.
Because they consider the who system corrupt, some radicals never tip, or only give a token amount. The morality of that is topsy-turvy. Your protest against the tipping system goes unnoticed, except by the low paid waiting staff whose day is made more difficult. I’m not even sure you would get away with that in the United States. In one episode of the Sopranos, gang boss Tony Soprano generously nominates his nephew Christopher to pay the bill, after a slap-up restaurant meal for the boys. It comes to $1100, and Christopher only just has enough, and so can’t afford a tip. When a waiter rushes out after him, in the car park Christopher and another young mafioso batter him to death.
There are anomalies even within the crazy tipping system. For example, it’s unusual to tip bar staff in pubis in the UK. Lot of people transfer that logic to when they eat in a pub, even if the meal is brought to their table. Only in full-on gastro pubs (ie places that were once pubs but are now really restaurants) do diners normally tip.
The solution of course is to have a properly regulated living wage as a minimum, so that workers could survive without tips. Prices also should be regulated, including rent levels, to make eating out regularly affordable (it isn’t for many people in the UK). In the meantime people who claim to a radical outlook should pay their tips properly and not use the excuse of the corruption of the system to refuse to pay, or to give only a token amount.
Phil Hearse