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New Data Shows Just How Unequal Tipping Can Be

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But there are some proposed solutions

Photo: Andrey_Popov/Shutterstock

Making a decent wage as a restaurant server can be a struggle, depending on who you are and where you work. Studies have shown that it’s not only easier to make a decent income working as a waiter in fine dining than in lower-tiered establishments, but that racial and gender gaps exist between the two worlds. Now, data from FiveThirtyEight highlights just how volatile wages for tipped workers at small, casual dining restaurants can be, and why some people are calling for higher wages — or squashing restaurant tipping all together.

Servers in casual restaurants have to work on average nine times as hard as fine-dining servers to make standard minimum wage, the data shows. In most states, tipped workers receive a special minimum wage much lower than the standard one. The federal minimum wage for tipped employees is $2.13, compared to the standard minimum wage of $7.25. The idea is that tips make up the difference, and for some workers, could lead to even more income than the standard minimum. But for many employees both inside and outside the restaurant industry, that $7.25 minimum wage isn’t nearly enough to live on; hence the ongoing Fight for $15 movement, which advocates for a $15 per hour minimum wage.

In small restaurants where the average bill is around $10 per person, servers earning the federal tipped minimum wage have to wait about four tables an hour in order to make the equivalent of a $15/hr hourly wage, data from FiveThirtyEight shows. That’s assuming a 15 percent tip from tables of two. Meanwhile, servers who work at more expensive establishments can get through their shifts barely serving one table of two an hour (0.2 tables to be precise) and still make close to that amount. That means casual workers have to serve nine times as many tables as fine-dining servers to make a comparable amount.

To wrangle the data, FiveThirtyEight looked at the average guest checks from four American restaurant chains representing different price points. At the top was Eddie V’s, a high-end seafood chain by Darden Restaurants, where the average check per person is $91, according to public financial documents. The higher bills mean that servers working in similar restaurants and earning 15 percent tips make well over their states’ minimum wages. But on the lower end of the spectrum, in some states, workers at places like Denny’s — where the average bill is $9.69 — have to to work, on average, at least one and half tables for two each hour to barely make their state’s minimum wage.

This is the problem with tipping, some critics say. In the Washington Post, food and economics writer Roberto A. Ferdman points out the problematic nature of tipping, mainly that servers who work in the Olive Gardens and Denny’s of the world may look a lot different than those who work at the world’s Eddie V’s. Ferdman wrote:

“There is still a $4 per hour wage gap between what white workers and workers of color make in the restaurant industry, and it’s because workers of color are relegated to lower-level positions. In fine dining, they work as buses and runners, instead of as server and bartenders. They also work in lower-level segments, at places like Olive Garden instead of at places like Capital Grille. They work in places where you make less money.”

According to a 2015 report from the Restaurants Opportunities Center United, an advocacy group for restaurant workers, service jobs in fine dining, where higher wages are easier to come by, are disproportionately filled by white men. Yet in lower-tiered establishments the discrepancies are not as stark. While women make up the majority of tipped positions, they are largely working in casual, full-service restaurants where wages are generally low for everyone, compared to fine dining, the report showed.

On top of that, several studies have probed how race and gender differences can impact tipping amounts. Women can earn more tips from men, while people of color can see lower tips from customers. If the FiveThirtyEight data shows anything, it’s that these discrepancies can be exacerbated by customers at casual restaurants who don’t tip as well.

One proposed solution is getting rid of tipping all together. Several restaurateurs, most notably Danny Meyer, have banned tipping from all or some of their restaurants, choosing instead to charge higher prices and pay workers fairer wages.

Another solution calls on the government to set a higher minimum wage for all employees so servers aren’t relying on tips. While every state can set their own minimum wage rates, they cannot be lower than those $7.25/$2.13 federal minimum wage limits. If all states adopted this standard, Denny’s employees would have to work an average of two tables an hour to meet the federal wage limits.

Of course, if employees don’t make this amount on their own, their employers are supposed to fill the gap — but as FiveThirtyEight pointed out, this sometimes doesn’t happen. Until a solution is reached, and no matter how many tables servers work an hour, reconciling that gap continues to fall on the generosity of the customer.

How Hard Is Your Server Working To Earn Minimum Wage? [FiveThirtyEight]