Hot Tips

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All right, everybody cough up some green football lady.

Come on, throw in a buck.

Uh-uh, I don't tip.

You don't tip?

No, I don't believe in her.

You don't believe in tipping?

Do you know what these chicks make?

They make shit.

Don't give me that.

She don't make enough money, she can quit.

Who knew that Quentin Tarantino was so up on labor justice debates in the restaurant industry?

Somehow, this passed me by back in the day, even though I watched Reservoir Dogs approximately 500 times, and my roommate Dech had the poster above her bed in school.

But if you want to hear social justice, wait till Mr.

White, aka Harvey Keitel, who I actually used to sort of fancy in a craggy old man way, wait till he gets started.

Wait for singing is the number one occupation for female non-college graduates in this country.

It's the one job basically any woman can get and make a living on.

The reason is because of their tips.

Mr.

White and maybe even Quentin Tarantino, they're partially right.

The restaurant industry is the largest employer of minimum wage workers in the U.S., and two-thirds of those are women.

They rely on tips because the federal base wage for tipped restaurant employees is just $2.13 an hour.

It's less than one-third the federal minimum wage of $7.25 an hour.

But many, if not most, of these women can't actually make a living on their tips the way Mr.

White says they can.

And that is why, dear listeners, you should listen to Gastropod rather than Reservoir Dogs, at least when it comes to the history and science of tipping.

Or really anything food related.

And fortunately, you are listening to Gastropod, and I am Nicola Twilly.

And I'm Cynthia Graeber.

And today's episode is Yes About Tipping.

If you grew up in the U.S.

and haven't traveled much, you might not realize it, but we tip a lot in the US, much more than in other countries.

Why is that?

And even within America, which is already tip central, restaurants are the biggest tip zone.

You don't have to tip the person person at your local bakery for reaching into the case and getting you a cookie, but unless you're Mr.

Pink, everyone knows you have to tip your waiter and your bartender for bringing your plate over and pouring a beer.

But why?

What's the logic there?

Assuming there is logic, which there might not be.

How did this practice get started in Europe, and why did it then basically disappear there?

And what does its rise in the US in the 1900s have to do with the end of slavery here?

This episode is supported in part by a grant from the Alfred P.

Sloan Foundation for the Public Understanding of Science, Technology, and Economics.

So tipping originated in feudal Europe.

It was something that aristocrats and nobles gave to serfs and vassals, but always on top of a wage.

So if you can imagine Downton Abbey or honestly, even earlier.

This was something that aristocrats and nobles gave as an extra or bonus at the end of the year or during holidays or for a job well done.

Sarah J.

Raman is the president and co-founder of One Fair Wage and the director of the Food Labor Research Center at the University of California, Berkeley.

And while we know that lords in Europe hundreds of years ago in medieval times would throw a few extra coins to their servants or the workers on their land, we don't actually know how far back this practice goes.

People have probably been oh-so generously tossing some spare change here and there to their servants for quite a while.

But we do know that in England, by the time of Henry VIII and Queen Elizabeth, 1500s basically, dipping had become solidified into a practice that was called veils.

Veils spelled like the Colorado ski resort rather than the thing you might wear on your wedding day.

It then evolved from giving small gifts to your own servants to tipping your friend's servants when you visited.

Back then, when someone came, it was a long trip, they stayed for a while, it involved extra work on the part of the staff.

The visitors would give payments of money to compensate the serfs and the household workers for that extra effort that their visit entailed.

Mike Lynn is a professor of hospitality and hotel management at the Cornell Hotel School, and he is an expert on tipping.

At the end of a visit to a stately home, the servants would line up by the door and if they didn't get their veils, well, you might find your horse went lame the next time you visited or you accidentally got splattered with some gravy at the dinner table.

These things can happen.

Noble travelers weren't too psyched about having to shell out all this cash when they were just, you know, visiting friends in the beautiful countryside.

They complained that the veils really added up.

But tipping, as standard practice, was gaining ground.

First, the veils at stately homes.

And from there, it evolved into commercial eating and dining establishments.

There's a famous British writer called Samuel Pepys who kept a diary in the 1660s that was later published.

In the diary, Pepys kept a note of the extras he gave out at coffee houses and inns.

It's evidence that tipping was clearly normal in London by that point.

Basically, this was the practice of giving money to people who were serving you.

In commercial establishments, you were tipping for the same types of services you might have paid veils for at the stately homes.

Making and serving your food, taking care of your horses, making up your bed.

But when did we start to call it tipping?

The first use of the word tip was in a play performed at London's hay market in 1707 in which two young gentlemen entrap heiresses and steal their fortunes.

And also at one point, they tip a church caretaker a half a crown.

But that doesn't answer the question of where the word itself came from.

Mike says we don't actually know, but there are some theories.

Like there's a Dutch phrase tipping or like tapping a coin on a glass to get attention.

Tipping is supposedly come from a practice in British pubs where people would wrap coins in notes saying to ensure promptness and hand that to servers.

To ensure promptness, T-I-P.

Another possible origin?

The Latin word stips, which meant gift or small offering.

Another theory is that it it comes from the word tipple, like it's a gratuity you pay to buy a drink.

And in fact, the word that means tip in other languages is frequently related to drinking.

In French, the word for tip pourbois translates to for drink.

In Russian, it translates to for tea.

In German, it translates to drink money.

All of these are stories, which is the true origin, the etymology of the word tip.

I don't know.

I'm sorry.

No worries.

Either way, a tip is a little gift, something that a rich and powerful person chooses to bestow on the lowly individual who's performing some kind of service for them.

But here's something a little weird.

In early America, a lot of cultural norms came here on the boats with the European colonizers, but tipping mostly didn't.

Sure, there are some records of George Washington tipping his brother-in-law's enslaved Africans and of Thomas Jefferson tipping his own slaves, but by and large, Americans did not tip.

Obviously, though, there's a pretty key difference between having servants and slavery, and that's part of why tipping didn't catch on in the colonies.

But also, and this is a very very contradictory way of thinking given that slavery was legal, many early Americans thought they were above tipping, that tipping was a remnant of the bad old social hierarchy in aristocratic Europe and not fit for a modern, more egalitarian nation.

But eventually, Sorrow says, tipping did catch on here too.

The idea came to the States in about the 1850s when rich Americans traveled to Europe and came back and tried to show off that they knew the rules of Europe.

These gilded age Americans had experience dining with multiple forks and other fancy European ideas.

And when they came back to the US and started eating in the very first restaurants in New York City, they knew what to do.

Use your cutlery from the outside in, and of course, leave a tip.

And then something else happened at around the same time, emancipation.

Suddenly, there were a lot of African Americans who needed paid jobs, and some employers picked up on this, plus rich Americans newfound comfort with tipping, and they saw an opportunity.

One of them was the Pullman Car Company, which made railroad cars.

Which Which was these luxury trains that this is the way rich people cross the country.

This company, the Pullman Train Company, hired 10,000 black men, newly freed slaves, and wanted to pay them nothing, wanted them to work on the trains only for the tips that the rich people would give them as servers and porters on the trains.

And the black men, all who, by the way, everybody called them George, regardless of their name, it was a way to diminish their humanity.

Everybody was called George.

They were made to live off of tips.

Pullman Company was quite unapologetic about their motives here.

In 1915, they were called to testify to Congress about this practice of not paying tipped employees.

Ironically, at this point, the chairman of the Pullman Board and former CEO was Abraham Lincoln's own son.

But anyway, the company told Congress that they deliberately only hired black men from the South because, quote, the Southern Negro is more adapted to wait on people and serve with a smile.

The Pullman Company did eventually pay their workers more than zero, but it was really just a tiny amount.

In 1915, they had 6,500 porters on their payroll at about $2,750 a month in wages, and apparently they were saving about $2.5 million a year.

In 1925, a union of Pullman Porters said the company had saved at least $150 million in salaries since 1867, thanks to tipping.

So it's so important to understand that the sub-minimum wage for tipped workers is a direct legacy of slavery.

It's a direct remnant of our nation's very ugly racial caste system and unwillingness to pay black people for their labor.

Pullman rightly gets a lot of the blame for making tipping normal in America.

A St.

Louis newspaper editorial at the time wrote that, quote, it was the Pullman Company which fastened the tipping habit on the American people, and they used the Negro as the instrument to do it with.

But it wasn't just the Pullman Company that used tipping and the end of slavery as a way to get out of paying African Americans their due.

Soro says the restaurant industry did so as well.

At the same time the Pullman was hiring black men to work for zero money and tips, these newfangled restaurants that were springing up in big cities, they were hiring black women with that same great deal.

It really wasn't Pullman alone.

It was Pullman and the restaurants at the same time really implementing this practice.

In Europe, quite a few waiters and waitresses also weren't making any money other than their tips.

In Paris, in some spots, waiters even had to pay cafe owners a fee for the privilege of trying to make a living from tips.

But by the late 1800s, there was a growing backlash against tips on both sides of the pond.

In the US, as tipping grew, a lot of Americans hated it.

Some people in the rising middle class hated it because they felt like they'd never get as good service as the rich would.

Some people hated it because it gave waiters too much power.

There were rumors that they'd do something unseemly to your dish if you didn't tip enough.

Spitting in your food aside, tipping just made customers anxious.

So much so that the first self-service restaurants, the Automats, their primary selling point was that diners would no longer need to tip because there were no waiters.

And then there were still these big moral arguments against tipping.

People just thought it was un-American.

There was a general cultural rejection of the notion.

There was a general idea that we're a democracy and we reject this idea.

This vestige of feudalism doesn't exist in America.

There were restaurants, again in St.

Louis, that put out signs that said, no tipping.

Tipping is not American.

The Syracuse Herald condemned tipping as, quote, hateful to the American mind.

There were even attempts to make tipping illegal.

Six states and their state houses considered bills in 1915 to get rid of tipping entirely.

They passed in Iowa, South Carolina, and Tennessee, but these anti-tipping laws were repealed within a decade.

Lots of people hated it, but tipping still won.

Because lots of companies made lots of money off it.

Money they didn't have to spend on wages.

When there was an opportunity for capitalism to profit off of using this idea as a replacement for wages for black people in particular,

you know, racialized capitalism in the United States always trumps democracy.

I'm going to say that again.

Racialized capitalism in the United States always trumps democracy, meaning that, no, there wasn't a lot of opposition to the Pullman company doing this or the restaurant industry doing this because there was a general concession.

Oh, well, if they can profit off of it, you know, businesses should be able to profit off of black people.

That is something we hold dear in America, maybe more dear than democracy.

The workers' union for the Pullman Company called the Brotherhood of Sleeping Car Porters, despite racialized capitalism, they did manage to win their bargaining agreement and get a major wage hike in 1937.

Porters no longer had to live off tips.

This whole question of wages and tips and minimums, the debate really heated up in the 1930s during the Great Depression.

Policymakers were beginning to put together what became known as the New Deal, and by the time the Fair Labor Standards Act was passed in 1938, the fateful decision was made.

And that fateful decision?

It did create maximum working hours, which settled at 40 hours a week, and it created a minimum wage, which started at 25 cents an hour and pretty quickly went up to 30 and 40 cents an hour.

But, but, but that new deal wasn't for everyone.

We got the right to the federal minimum wage for the first time as part of the new deal in 1938.

And as part of that law, three groups of black workers were left out: farm workers, domestic workers, and tipped restaurant workers.

Reverend Dr.

William Barber is an activist, and he's head of an organization called Repairs of the Breach.

And he spoke recently at an event for Sorrow's organization, One Fair Wage, about how tipping is rooted in slavery.

When the New Deal was passed, there was a compromise made to appease many southern racist senators and others.

The compromise said that domestic and agrarian workers could not pay in to Social Security and receive Social Security.

And tip workers were left out of the minimum wage standard that was passed during the New Deal.

This is a harmful, grotesque, and mean-spirited history.

Meanwhile, back on the continent where tipping came from, it wasn't so popular anymore.

Europe went in exactly the opposite direction because the labor movement was so much stronger there.

In 1943, the Catering Wages Act in Britain established a minimum wage for service employees.

In 1955, France required all restaurants to add a service charge to the bill to pay waiters the minimum wage.

Gradually, waiters were starting to be paid a normal wage, the same as everyone else, rather than relying on tips for their living.

And that's become standard across a lot of Europe.

So, in Europe, you really can make a living off working in a restaurant.

Whether it's a good living or not, that's a different debate.

But waiters in most of Europe don't rely on tips.

But that's not true here.

In the U.S., the minimum wage for tipped workers was codified in 1966, set at half the national minimum wage.

That amount slowly crept upward along with the minimum wage until 1996.

Imagine there's no pizza.

I couldn't if I tried.

Yes, it's time to bring back Herman Kane.

Not literally bring back, he's dead.

But the man who sang about pizza as CEO of Godfather's Pizza back on our pizza episode?

Yeah, he's a big part of the reason waiters still only make the princely sum of $2.13 an hour.

In 1996, Congress was looking to raise the minimum wage overall, which would have also raised the sub-minimum tipped wage.

Herman Kane was head of the lobbying group, the National Restaurant Association, what Saru calls the other NRA, and he offered them a compromise.

His org would stop fighting the increase in the minimum wage if Congress froze the sub-tipped minimum wage at 213 and Congress folded.

Thanks, Herman.

Today, the NRA, funded by the big restaurant companies like Darden, which owns Olive Garden, they spend millions of dollars each year to keep this vestige of slavery in place.

Another reason to say no to unlimited breadsticks.

So obviously, this ridiculously low wage for servers, making them rely on tips, it's great for the big restaurant companies.

They save a lot of money and wages.

But now it's kind of part of our society in the U.S.

in general.

America is exceptional in many ways.

And by that, I mean it is very different from other countries rather than necessarily better.

And one of those exceptions is tipping.

And of course, now we are the preeminent nation when it comes to tipping.

We tip more people in larger amounts than other countries.

There are no good, reliable, you know, accounts of how much is tipped, but estimates place it at over 40 billion a year in the United States to food service workers alone.

$40 billion a year?

That sounds like a lot to me.

And we have a lot of restaurants and people like eating in them.

So maybe this is something America is doing right.

Maybe somehow we've stumbled onto something that does work, that's actually a good idea despite its shameful origins.

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Also, let's unpack that a little, Cynthia.

There's no doubt that tipping, once you actually think about it, is kind of strange.

Somehow in a restaurant, the normal rules of doing business are suspended and the owners of the business get to outsource their employees' wages onto the customers.

Well, you know, it is kind of a unique situation.

You're spending a lot of time with this person who's waiting on you, an hour, maybe two.

So the theory is you're getting a lot of personalized service, and that's what you're literally paying them for.

You pay them well if they give you good service.

But Mike Lynn says, not so fast.

So bill size is the single biggest predictor of the dollar and cent tip amounts that a customer will leave.

It explains 70% of the differences in tips left by different dining parties, which means that it's twice as powerful as everything else combined.

But so then do tips have nothing to do with service?

Yes and no.

First off, tips are not strongly related to service.

Customers do tip more when they get better service, but they don't tip a whole lot more.

And many customers will leave a good tip even if they're dissatisfied with the service.

Mike has done a lot of studies about tipping and to figure out if customers tip more when they get good service, he basically quizzed them as they left the restaurant and asked them if they thought the service was good and then he compared their responses to the actual amount they tipped.

About 4% of the variances or differences in tips left by different dining parties are explained by their own ratings of service.

So tips are not a strong big reward for good service.

To translate what that 4% variance means, Mike says good service ratings make about the same difference to tip size as a sunny day.

But that said, there is a lot going on here.

As Mike is the first to admit, it's hard to untangle everything that's going on with a tip relative to the restaurant experience and a customer's perception of the service versus other factors like how much booze they drank and whether the food was tasty and if they got in a fight with their spouse.

There does seem to be something from the servers that influences how much people tip, and it's kind of working on the customer's subconscious.

They might not even consider it when they think about how good their service was.

If the server smiles, a big open-face smile, if the server touches the customer lightly on the arm or shoulder, if the server squats down next to the table so that eye levels are the same and they make better eye contact, if the server calls the customer by name, all of these have been shown to have a pretty substantial impact on tips.

Substantial along the lines of 20 to 40 percent.

This whole fake friendliness, touching customers and drawing little smiley faces on receipts, I personally cannot stand it, but it works.

But Mike explains that perception of friendliness, even though it does affect tip size, it doesn't necessarily affect how highly customers rate the actual service.

Like I said, it's kind of working on their subconscious.

When they told Mike whether the service was good or not, they might have just been thinking about how quickly their food came, whether it was hot, whether the server remembered everything they were supposed to get.

But the point is, a server's behavior does have some impact on the tip.

So there is some logic to saying that tipping is connected to better service.

At least tip size is connected to a more friendly waiter.

And Mike has also done studies showing that diners like to tip.

It makes them feel generous and powerful and good.

Servers seem to like tips too in theory.

The other factor I think is going on is that servers are motivated to perceive a relationship because if tips are related to service, then they earn the money they make in tips.

But if tips are not related to service, then they really are a gift from the customer.

It's a freebie.

It's a handout.

And I think people are motivated to believe that they earn the money that they get.

We heard exactly that from a bartender we spoke to, Natasha Van Duser.

I'm very pro-tip.

I really like the concept of tipping as both a customer and a worker.

I've traveled to a bunch of countries where they don't have tipping, and I've always noticed that there's less of camaraderie in the restaurant industry when there isn't any tipping.

And that's always been, again, part of the job for me is like having fun with the customers, really getting to know them.

And I feel like when we take tipping away, we kind of take that element and that need away.

And it becomes more of just like a base job and no longer kind of this fun

way to get to know other people.

So seems like everyone wins.

Plus, you can make a lot of money.

Certainly, Josh Lewin did.

He's been in the restaurant industry for more than two decades and he now runs two restaurants in and around Boston, one called Juliet and one called Peregrine.

And most of my jobs as a tipped service worker, as a fine dining white male male server in urban areas, I've actually been able to do quite well for myself.

As a white woman in my early 20s, waiting tables at a reasonably fancy place in North Carolina, I had the same experience as Josh.

I did pretty well for myself.

It was actually a while before I made that kind of money again.

But even young, ignorant me knew that wasn't the case for everybody.

So my tipped experience was actually pretty good, but I would say not equitable across even the staff I was a part of.

Like you're Nikki, Josh knows he's part of the elite.

I go to restaurants in an urban area, and I'm guessing a lot of the servers there can make an okay living, but they're a very rare slice.

They're the exception, not the rule.

Most servers.

They're largely women working in very casual restaurants, IHOPs, Denny's, mom and pop diners across America.

They struggle with the highest rates of economic insecurity and sexual harassment of any industry.

And what it's so important to note is that it's been a largely female industry since this practice started at emancipation.

And it really truly is.

If you think about any other industry where the wage has only gone up $2 over 150 years, it just doesn't exist.

And so this truly is a reflection of the fact that this is the nation's largest workforce of women.

It's a reflection of the nation's value that we place on women and particularly on women of color.

If you earn just $2.13 an hour, which again is the legal minimum tipped wage, oftentimes all of that goes to your withholdings and you get a big fat zero dollars, which means you are totally dependent on tips.

If those tips are based on the check at a restaurant like Denny's, where that average check is $10 per guest, you're just not making much money.

And that's exactly what's happening to the majority of servers in the restaurant industry.

There are 13 and a half million people who work in the restaurant industry.

Not all of them are tipped, but the majority are.

Prior to the pandemic, they experienced three times the poverty rate of the rest of the U.S.

workforce.

They used food stamps at double the rate of the rest of the U.S.

workforce, which means the women who put food on our tables in most restaurants in America could not afford to put food on their own families' tables before the pandemic.

So what that means is not only are customers paying tipped waiters' wages rather than business owners, all of us are subsidizing these restaurants.

SARA's organization put out a report in 2015 that showed that the average olive garden costs taxpayers $200,000 every year in public assistance for its employees.

The restaurant business isn't the only one not to pay a living wage, but it's one of the biggest, and half of all full-service restaurant workers use public assistance.

On top of all this, it's not just that you'll make more money if you're at a higher-end restaurant and a lot less at a cheaper one.

There are other insidious forces that can and do affect your tipped salary.

Josh pointed to this when he said he was a white male server at a high-end restaurant.

So, people of color, in particular, women of color, are segregated in our industry in two ways.

They're segregated into lower-tipping segments of the industry, casual restaurants as opposed to fine dining, and they're segregated into lower positions, even when they're in fine dining.

But then when you compound upon that, the other research that shows even if the woman of color makes it to Roots Chris and she's standing next to a white man server, she's still going to make less.

It's really the combination of those two factors that results in what we have found to be a $5 per hour wage gap between black women tipped workers and white male tipped workers, because they never make it to fine dining.

And then even when they make it to fine dining, they're tipped less.

This is something Mike Lynn has found in his studies.

White servers got on average 5% higher tips than the black servers did at the same restaurant, even though customers rated the service the same.

Racism is harmful for servers, but also harmful for customers.

Servers act certain ways because they think different groups of people will tip certain ways and this leads to discrimination.

Mike has found that more than a third of servers admitted that they sometimes don't give good service to groups they think will be bad tippers and that included black and Hispanic customers.

Tipping just creates a power dynamic, and where there's a power dynamic, there's an opportunity for people to abuse it.

People abuse power when it comes to race and when it comes to gender, too.

There is some evidence that waitresses' appearance affects their tips more than waiters' appearance does.

Attractive waitresses, waitresses who are slenderer, who have larger breast sizes, tend to get better tips than waitresses who are heavier, have smaller breast sizes.

And also remember, most of the people working in restaurants are female.

A 70% female industry having to tolerate all kinds of inappropriate customer behavior to feed their kids entirely in tips.

And that is fundamentally what is wrong.

It's about forcing a mostly female population to have to put up with the biases and whims of customers in order to feed their children.

Again, waitresses make money from their tips and customers tip more if they feel like the waitresses are being friendly and waitresses have to smile and nod even when they're faced with all sorts of gross and totally inappropriate behavior by customers.

Sara says the restaurant industry has the highest incidence of sexual harassment.

This is something that Alexandria Ocasio-Cortez, the member of Congress, she experienced this kind of harassment herself when she worked as a tipped bartender.

I remember her saying, you know, maybe at the beginning of the month, you can,

if a guy grabs your butt, you can swat him away.

You can say, buzz off.

But by the 15th of the month and the 16th, and you get closer and closer to the end of the month, you are going to put up with it because that guy who's grabbing you, his tips are your rent.

That is how you're going to pay your rent at the end of the month.

And especially if you're a single mother, you have no choice.

And often because waiting tables and bartending is the first job for so many women, this sets up their expectation for how they're going to be treated and what they have to just put up with for the rest of their careers.

So harassment in the restaurant industry is all too common.

And then the pandemic hit, and women in the service industry, who were already dealing with wages that were too low to live on, and normalized sexual harassment, they found that things got even worse.

Saru's organization published a report on this issue last December.

They were being asked to enforce social distancing and mask rules on customers from whom they had to get tips to survive at a time when tips are down 50 to 75 percent.

They were having to tolerate just the most horrific health risks at a time when tips are down 50 to 75 percent.

And worst of all, worst of all, they were having to tolerate much higher levels of sexual harassment.

41% of workers said sexual harassment went way up during the pandemic.

And hundreds of women submitted comments from male customers saying, take off your mask so we can see how cute you are and determine how much we want to tip you.

If men.

are saying you have to take off your mask which protects your life and your family's life in order to decide how much to tip you.

I'm sorry, but it obliterates the idea that it was based on the quality of her service.

Natasha Van Duser, the bartender we spoke to, she told us she thought she was already totally used to the harassment she experienced as a woman working for tips, but COVID really took it up a notch.

I would have eight to 10 hour shifts completely alone in the building, no breaks, and I would have customers who would come up, not wear a mask.

And a lot of times when I would say something like, hey, can you please put a mask on, their responses to me would be these kind of like degrading sexualized responses.

I got called like a whore and a slut all the time just for asking people to basically put their masks on.

And the temperatures, when we had to take temperatures for indoor dining, that would be where I got the crudest responses from people.

Just like bad sexual innuendos.

Yes, harassment is up in all sorts of public spaces these pandemic days and not just in restaurants.

Grocery store workers are being spat at too.

But the difference is Natasha isn't going to be able to pay her bills if her customers don't tip her.

And those things that Mike's research shows increase tips, like smiling and touching someone's arm and leaning over the table, those are not CDC-approved ways of behaving during a pandemic.

The long and short is that tipped workers have been screwed multiple times over by COVID.

The restaurant industry had a lot of problems before the pandemic hit, but COVID really laid bare what all those problems are and just how serious they are.

And it's making some people in the industry start to think maybe there's another way forward.

We have seen such a dramatic change in worker views and employer views during the pandemic.

Dramatic shift where a lot of workers have said, we don't want to go back to work without a full minimum wage or more.

We've never been treated like professionals.

Maybe I earned too little.

Maybe I should have been paid a full, stable, livable wage to begin with.

And tips should never have been a part of my base wage.

So I think attitudes have definitely changed during the pandemic.

But can America really move away from tibbing and restaurants altogether?

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I hated tipping.

You know, I hated the idea that a guest felt like I was going to be nice to them because I wanted them to tip me.

Andrea Borgen Abdallah is the owner of Barcito and Bodega in downtown Los Angeles.

You know, anytime I got a really big tip, it didn't make me feel good.

It actually made me feel bad.

It made me feel like maybe that person person thought that this was like disingenuous or that I wasn't sincere in kind of the interaction that I was having with them.

And, you know, that really my goal was for them to just have a great time, not for them to pay me for it necessarily.

And so that kind of like transactional nature and the relationship and the implications of the relationship that kind of come about between the guest and the bartender or the server or what have you has always made me feel incredibly uncomfortable.

Andrea decided to eliminate tipping from her restaurant.

And it's in part because all of the reasons we've already laid out and a few others on top of all that.

Andrea hated the unequal relationship tipping created between wait staff and customers, but she also really hated the inequality it created between what restaurant people call front-of-house staff, tipped workers like waiters, bartenders, etc., and back-of-house, or everyone who works in the kitchen who's making a wage and normally not a big one.

I mean, it's insane that a back-of-house employee should make $10 an hour and a front-of-house employee is making $50 an hour.

Andrea's talking about restaurants like hers.

These are certainly more upscale than Denny's and servers might take home hundreds of dollars a night in tips, which is a lot more than back-of-house workers make.

And for all intents and purposes, they're on the same team and driving the same experience and probably the reason that someone came in and spent that much money and tipped so high.

And I think, you know, especially in our industry where the racial inequities tend to also concentrate along those lines.

You know, there is this wage inequity, which also translates to racial inequity because brown and black folks are the ones that are in our kitchens and kind of white folks are the ones in the front of the house.

And the disparities there become really pronounced.

Andrea opened her restaurant a few years ago in September 2015.

It was meant to be a neighborhood hangout, something that would remind her of the corner cafes she used to visit over the summers with her grandparents in Buenos Aires.

And even though she'd never been a fan of dipping, that particular issue wasn't top of mind right at the start.

So at the time, I really didn't think about it.

I was, you know, I think just overwhelmed by the premise of opening my own restaurant.

I was 26 at the time and so pretty distracted.

But I think, you know, I opened in September of 2015.

Danny Meyer made his announcement about no tipping in October of 2015.

And then I kind of pretty immediately spent the next six months just researching.

how he was doing it, other folks that had attempted similar models, and basically by April or May, decided to implement it at my restaurant.

restaurant.

A little bit of context here.

First of all, some states have actually eliminated the sub-minimum tipped wage, that loophole that has always allowed tipped workers to be paid less than the minimum wage.

And California, where Andrea's restaurants are, is one of those states.

Tipped workers in her restaurant already got the regular minimum wage.

New York isn't one of those, but New York was increasing their minimum wage overall.

And some famous higher-end restaurateurs, like Danny Meyer and like Tom Calicchio, they already paid at least a minimum wage before tips.

They saw these increases coming and they decided to eliminate tipping at some of their restaurants.

It looked like it might suddenly start to make economic sense as well as just being the right thing to do.

This was a movement, but a very tiny one.

Andrea told us that when she decided to go no-tipping in her restaurant, there were two other places in the whole of Los Angeles that were also giving it a go.

Andrea's restaurant had been open for about six months before she changed it to no tipping.

The route that we chose to take was not to add a service charge, but to just include it in our prices.

And so our prices went up by about 22%.

Andrea had done a lot of talking with her team to figure out how to make this work for everyone, and she said they loved the model she came up with.

In this new no-tip system, it no longer mattered if you worked a sparse Tuesday night or a busy Saturday night.

Everyone was paid a base salary with benefits, including health care.

On top of that, her employees got a percentage of the overall revenue the restaurant was pulling in.

I think having a little bit of skin in the game and having some sort of connection to the sales and then the eventual compensation seemed like an important piece of this puzzle.

Awesome.

So what happened?

Did it work?

So, you know, I think there are things that happened almost immediately and there are things that took probably a year to kind of fully realize.

And so, you know, I think the immediate feedback was great.

We got a ton of press coverage.

You know, I was an Eater Young gun and I got a Zagat 30 Under 30 Award and sort of all these things.

And amid all of that kind of praise, you know, I think sales sort of went up.

We were a new restaurant at the time too.

And so any press really helped our cause.

And, you know, my employees were thrilled.

And so in those kind of first six months, had you asked me at the time, how's this going?

I would have said, great, much better than I'd anticipated.

You know, I'm sort of thrilled with the results of this so far.

But then the buzz of being the hot new restaurant in town wore off.

A full year, we started to really see how those changes in guest perception affected us and the sort of inability to reconcile the price and how we competed with our neighbors.

Basically, it turns out that people are not rational economic actors.

Shock.

Yeah.

So one of my favorite examples is we essentially had this like braised four-ounce piece of short rib that came with like seasonal vegetables and like a chimichurri sauce.

Pre-change, it was $13 on our menu.

Post-change, it was $16.

And that was the biggest increase that we had was a $3 increase.

Our prices had always been pretty low.

And so for the most part, the changes were pretty small like that.

But I mean, it's incredible

what the perception with that dish turned into.

We used to get kind of like rave reviews about this dish and how good it was and

the value.

And then, you know, it became

small and underwhelming.

and nothing about the dish changed except for the $3 price tag.

And so, you know, it's just one of those things that like consistently over and over and over again, we kind of kept seeing the same things throughout our menu to dishes that really hadn't changed at all except for a couple bucks here and there.

Before the no-tipping, customers would have ended up paying pretty much $16 for this short rib dish by the time they tipped.

So the dish really is the same, but somehow that $3 for a tip wasn't part of how people perceived the price.

The service part was invisible.

Basically, people didn't want to stop and think about how much it would have cost to incorporate the tip into the cost of their short rib.

And not everyone who came in for that dish wanted to think about all the issues with tipping we've been talking about this episode.

I think one of the things that's difficult about this conversation is, you know, we're in the business of hospitality.

Like, we want to provide this experience that kind of gives you an escape from your day-to-day life for however long it might be.

And to then introduce this, like, labor conversation into that is really challenging.

Two and a half years after Andrea started her big no-tip adventure, she went back to a traditional tipping model.

One reason for that is probably the only good thing you'll hear me say about Trump.

He made a tax change, and in this change, any restaurant that pays the full minimum wage can split the tips that night between the front and back of the house.

You can't share Tuesday's tips with Saturday's servers, but it did help smooth out the front and back disparity if you pay full minimum wage.

That helped Andrea achieve at least part of her goal of making pay more equal.

Marcito, her restaurant, it was getting kind of hammered because of this perception that its prices had gone up.

And so going back to tipping and splitting made economic sense.

Even though the numbers clearly pointed me in the direction of going back to tipping, I was still really hesitant about it because, as a practice, I still really, really dislike it.

You know, it has a legacy of slavery and kind of continuing racial inequity.

And, you know, I don't think those things are untrue or any less true.

But for the time being, it just feels like the right model for us at this time.

You know,

there is still so much that is wrong with tipping.

And I think

I didn't necessarily feel like a failure.

because I thought that it had spurred so many important conversations.

Andrea Andrea told us she's still working with Saru and her campaign for one fair wage.

This fight is not over for her.

Around the same time as Barcito opened, a restaurant opened near me in Somerville that was the first no-tipping restaurant in Boston, and no-tipping was baked into their business from day one.

The restaurant is called Juliet, and it's owned by Josh Lewin and Katrina Jazzieri.

We opened up with a single wage scale that everybody earned a minimum wage plus a little bit more at Juliet, and we had an incentive-based, profit-sharing-based incentive.

We still have that, but we also have a base wage that we achieved in 2019, which is $15 an hour.

So that's for everybody in the restaurant, like a support position, whatever, starts at that wage.

The response to Juliet's no-tipping business model has been heartwarming.

Katrina puts it down to a couple of factors.

One of those is that a chunk of their business comes from selling advanced tickets to prefix dinners.

So people in the restaurant, 90% of our guests, like, didn't even get a bill because they had bought their ticket in advance.

They came and had their show.

They left.

They didn't have to think about the money piece.

Juliet also serves reasonably priced breakfasts and lunches that are maybe a buck or two more expensive than a similar sandwich down the street, but it's Somervelt and their customers are probably pretty highly educated and interested in the labor argument.

There was this sort of immediate engagement and almost like an endearing quality, like because people found out that we were running our business this way and felt like that was a good way to run a business, that dignity and respect and economic stability were all positives that like oh wow this is great that you're doing this are you sure i can't leave a tip on top of it like are you sure you're being paid was the conversation more often than not basically it worked then three and a bit years later in summer 2019 katrina and josh opened a second restaurant in downtown boston and things have been a little different there we're inside of a hotel so we have guests from all over so we got to experience a lot of like foreign travelers being like, great, this makes total sense.

Like, why isn't every place in America like this?

To kind of the folks who were like excited about the business model, but a little like weirded out.

They were like, I don't really get it, but if you say I don't need to leave tips, like that's fine.

To then people kind of having the approach of like, don't take the tip away from me, the guest, which is like a thing that will have to be contended with.

And that's a little trickier to approach.

For whatever reason, even though some downtown customers seem to resent not being able to tip, this whole no-tip system is still working at Juliet and at Peregrine.

But in general, going tip-free is really not working for that many restaurants.

Josh says, maybe it's just harder to make the switch if you've already been in business for a while.

I don't know if it's easier or harder to do it as an existing business, as a multi-million dollar business, as a nationally prominent business.

I don't know.

I only know what our experience was.

We built it in from the beginning.

I suspect that helped us win this particular battle.

But I don't know.

I can't go back and change the way we did it.

In LA, the couple of other places that tried to go tip-free at the same time as Andrea Barcito, they have also had to pivot.

And in New York, Tom Calicchio and Danny Meyer went back to tipping too.

But like we said, Andrea hasn't given up hope.

She still believes no tipping is the future.

I think it absolutely could work.

It's just a matter of not being so fragmented in our approach and not just hoping that the Tom Calicchios and Danny Myers of the world will do it for us.

And I think until that kind of happens at like a national scale, it's going to be really difficult to pursue this in a meaningful way.

But I think it's absolutely possible.

We just need to be on the same page.

There is something happening right now that could start to bring all of us onto the same page.

And it's connected to President Biden's massive COVID relief bill.

And includes much more, like an increase in the minimum wage to at least $15 an hour.

People tell me that's going to be hard to pass.

Florida just passed it, as divided as that state is, they just passed it.

The rest of the country is ready to move as well.

Down in the details of this proposal is the fact that it would also eliminate the sub-minimum tipped wage.

All workers, tipped or untipped, would have to be paid that same minimum wage of $15 an hour.

That's the amount Saru calls one fair wage.

As we said, seven states have already entirely eliminated the tipped minimum wage.

And while they haven't gotten rid of tipping, that change has started to make a difference for the workers.

Contrary to everything you're going to hear from the restaurant association, those seven states' restaurant industries are booming.

Restaurants are growing.

Job growth is higher than it is in the 43 states.

Small business restaurants grow faster.

The chains grow faster.

Tipping is higher in those states.

And we have one half the level of sexual harassment and poverty in the restaurant industry as we do in the 43 states.

Sarah says there's no other policy that does both things so effectively at the same time.

It reduces poverty and it cuts sexual harassment by 50%, all that just by paying women an actual wage.

These seven states are a very lovely real-life experiment.

Ansaru says what they show is that you don't necessarily have to eliminate tipping.

If you just get rid of this sub-minimum tipped wage, which again is a legacy of slavery, a lot of the issues that tipping is blamed for, they go away.

So there are two things that are going on here.

One is that right now, with a tipped sub-minimum wage, people are basically making their entire salary salary off tips.

Tips are supposed to be the thing that brings restaurant workers up to a minimum wage.

No tips, no salary.

The other thing is just tipping, the practice itself with all its opportunities for discrimination and bias and power play.

But Saru says we should think about these two problems separately and tackle the first problem first by making companies pay their servers the full minimum wage.

But those companies don't want to.

The big lobbying group for the restaurant industry, the NRA, as we've said, it's made up of big chains and huge corporations and they do not want to lose the tipped sub minimum wage they love the tipped sub minimum wage the people that benefit most from this are not any small business you've ever heard of the small businesses use these strategies to get by because they're industry standard but huge companies are the are the big winners in this alternative minimum wage situation huge lobbies huge groups of people wielding huge profits across you know all the chain restaurants that you've ever heard of.

And you're going to hear over the next several weeks, and we're already seeing it, these arguments by the restaurant association that this is terrible it will kill business but what's so important to understand what they're really saying which they've said since emancipation is that we should not have to pay our own employees you the customers should pay them we should not have to pay them even though we profit from the value of their labor we should not have to pay them and that's the same argument they made for former slaves black women at emancipation and it's the same argument they're making today.

Eliminating the sub-minimum tipped wage and raising the minimum wage to a livable amount would go a long way to fixing a lot of the problems that tipped workers currently experience.

For one thing, servers like Natasha would no longer feel that they had to put up with abuse if they wanted to pay their rent.

So I've always liked the idea of $15 an hour because then when there is somebody who's gross and rude to me, I don't have to feel compelled to be nice to them.

I don't have to smile.

I can say, this is inappropriate.

You need to stop and not worry about it.

That said, keeping tipping even on top of the raised minimum wage does still leave in place power imbalances and the potential for harassment and differences in tipping based on race and appearance.

It's not great.

Personally, I do really like the way they do it in most of Europe.

People are paid a living wage and you just kind of round up the bill and leave a tiny bit extra if you want.

I would love to get rid of tips.

Love, love, love.

I come from England, and even aside from all the weirdness and inequality built into tipping, I just hate the way the dollar amount on the menu isn't what you end up paying in the US.

That's something Andrea feels too.

Imagine a world where the price is actually the price.

What you see is what you get, which I love.

I love the idea of like, this isn't some like mind game that we're going to play with you.

But, you know, unfortunately, it just didn't quite work out that way.

Sara's obviously not a fan of tipping, but for now, her fight is to ensure that everyone in the industry is paid a livable base salary.

So I think there is a new future, but the first step has to be one fair wage, getting everybody paid a full minimum wage with tips on top.

And that's a win for everyone, but the lobbyists and Olive Garden, really.

Saru says they'd be the only losers.

The truth is that for people who go to restaurants, I don't think you're going to see a huge menu price increase because truly this is a minimum wage increase that is going to be phased in over many years, five, six, seven years.

So it's going to feel like inflation or food cost increases to the customer in terms of menu price.

But on the flip side, what you are going to experience is less turnover.

So you might be able to see the same server every time you go eat out.

You might be able to develop a relationship.

You're going to have a better dining experience because the better people are paid, the longer they can stay in one place, the better they can hone their craft as the professionals that they are.

I mean, you're going to end up with a better, safer, more dignified dining experience.

If you're curious and want more information or want to find out how to pressure your government representatives to support this effort, you can go to onefairwage.site and find the blue button to get in touch with your legislator.

Biden's COVID-19 bill is still in process as we release this episode, so you should definitely make the effort to get in touch with your representative and tell them that you want to keep the elimination of the sub-minimum wage in that package.

You can also tell your favorite restaurant manager or owner to go to HiroadRestaurants.org, which is the site that Saru's organization has set up to help restaurants make these changes.

Thanks so much this episode to Saro Jayaraman, Andrea Borgen Abdallah, Natasha von Duzer, Josh Lewin, and Katrina Jazzaieri.

We have links to their organizations, books, and restaurants online at gastropod.com.

Thanks also, and as always, to Sonia Swanson, our Gastropod fellow, for all her help.

We'll be back in two weeks with a trip to Thailand.

In our dreams, but at least our taste buds will get to travel.

You're basking on a beach in the Bahamas.

Now you're journeying through the jade forests of Japan.

Now you're there for your alma mater's epic win.

And now you're awake.

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