Tag Archives: tips

Underpaying Servers Cannot Be Solved by Tipping Technology

gnn-slide-show-TIPNew Orleans               Because the restaurant industry has dominated the lobbying process around past efforts to raise the federal minimum wage in the US, servers, bartenders, and others who receive tips are not paid the current minimum of $7.25 per hour as a guarantee, but have to hustle that wage from a base of $2.13.  Despite all of the calls to reduce inequality, there has not been an increase in the federal minimum during President Obama’s first six years in office, and it’s not a sure thing, but it is a very safe bet there will not be an increase in the last two years of his term.   Meanwhile campaigners, community groups, and labor unions have raised the banners for low wage workers in fast food, Walmart’s, and other bottom scraping employers to pay $15 per hour and the President has proposed raising the federal to $10.10.   Just when the dawn was darkest, the tech industry has joined with the service industry to come up with a solution for this stalemate thank goodness.  They want to make it easier for you to tip and to tip more!

You think I’m pulling your leg right?  If you think this has to be the height of hypocrisy, you are close to the facts.

It seems that this is a multi-faceted campaign of moving the responsibility for the workers to the customers while the owners shuffle and smile.  At one level, the American calculation of 15% as a fair tip for good service has suddenly, according to the wizards writing and interviewing for the New York Times, become 20%, and rising, even for small purchases in their reckoning, like a $3.00 cup of coffee.  A $3.00 cup of coffee!  We have a 100% fair trade operation at Fair Grinds Coffeehouse, but we sure would be out of business if we tried to juke a cup of Joe up to 3 bucks!

One bunch of fancies had used some tech doodad to allow customers to separate tips for the servers and tips for the kitchen.  A customer was supposed to get the notion that this was a fine and progressive thing being done by the restaurateur, as opposed to a slick move on their part to make fair pay for the kitchen the customer’s responsibility in the same way they have so long shifted the burden of low pay to the customer for the server.  There have been decisions from appropriate jurisdictions limiting the ability of owners to take the tips or direct the distribution of pooled tips, but there is no restriction on owners creating a voluntary culture of sharing with the kitchen, bus staff, bartenders, and others, which is common in busy and lucrative dining markets whether New York, New Orleans, or San Francisco.

More pernicious were all the tricks owners were playing with their new tech tools or those they were getting from the geek-get-rich-squads establishing “choice architecture” that would force the buyer into higher, semi-mandatory tips or going through a process of deliberately resetting a tip level themselves.  One trick had to do with presetting iPads used as point-of-sale registers at certain levels.  I’m not a big Apple fan, but we have had great luck converting from an old computer system to an iPad POS system, and there is a tip line when someone pays on the Square through the iPad POS, but for goodness sake, it’s not preset.   There seem to be a dazzling variety of choices for other gee haws for coffeehouses and restaurants to suck more tips out of their customers.

The Restaurant Opportunity Center has tried to get establishments to sign up to voluntarily be good employers.  Fair Grinds Coffeehouse was quick to do so when approached.  By paying the full federal minimum wage of $7.25 and pooling tips, our baristas make between $13 and $17 per hour, which is a great hourly wage rate in New Orleans.

The solution isn’t in the tech, it’s with owners paying fair wages and communicating that to their customers rather than shilling their customers and shirking their own responsibilities.


Up with Minimum Wage – Hell, Yes! How about Hospitality Workers, Too?

New Orleans    President Obama in the State of the Union address called for an increase in the federal minimum wage, which has been stuck for the last four years at $7.25 per hour.  The President has done some bargaining, hopefully not with himself again, but the target for his proposed increase is $9.00 per hour, rather than the $9.50 he had proposed in his first term.

I’m not for quibbling though if he is really serious and finally willing to do the work to not just get an increase in the minimum, but also finally win indexing to the cost of living, which would mean low wage workers would not keep watching their paychecks shrink in the long, multi-year stretches of waiting for Congress to finally remember they need a raise.  The last serious argument for indexing was during Robert Reich’s tour at the Labor Department, but that notion was pulled back for the health care push in the first Clinton term.

Invariably, the increase would be over a number of years, rather than in one big gulp.  Maybe a bump to $8.00, then $8.50, and finally $9.00 over a couple of years, putting workers at $9 by the end of 2015 or starting 2016, more likely.  With indexing kicking in even at 2% or so with current inflation, the value of the $9.00 would stay evergreen.

The one thing I did not hear was a call to finally push back the lobbyists for the hotel and restaurant associations, and move the needle forward on tipped employees, who have been stuck around $2 bucks per hour over the last few bumps in the Fair Labor Standards Act (FLSA) governing the minimum wage.  Yes, they are supposed to get to the $7.25 figure through tips, but the enforcement is weak, and that’s putting it mildly, and the confusion for customers is huge, since most have no idea what kind of pittance they are earning.  The fast legion of tipped employees are not cocktail waitresses or brunch waiters in upscale breakfast places in New York City making $300 in tips per shift, but are humping it to make enough to bust past $8 per hour.

I will avoid ranting about my ever unpopular argument that tips are one of the major factors holding back hospitality workers from fair wages, solid unions, and dignity and respect on the job.  Nor will I list, as I have often done, the number of countries that scoff at tips as disrespectful or even refuse tips and turn them back to the customer when afforded.

Whether tips are an abomination for workers or not, the minimum wage for all the growing millions of hospitality and service workers classified as tipped employees desperately needs to be included significantly in any serious proposal for raising the minimum wage.

How about targeting the benchmark at 50% of the wage set per hour for non-tipped employees?  That would mean $4.50 for tipped workers when the FLSA number is $9.00 and so forth.

Time to move forward for ALL workers on this fight.