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In order to cut costs, many food and beverage establishments are cutting wages and trying to make it up to their workers by encouraging customers to tip more. However, the new tipping culture has the opposite effect, as the CNN report revealed people are actually tipping less. The implications of this imperfect storm are rough on all food industry workers – particularly Black workers.
Wage Disparities Continue To Grow
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Starting in 2021, during the height of the COVID-19 pandemic, more than 90 percent of Black restaurant workers stated that their tips had declined by at least 50 percent, according to CNBC. However, the report also showed that Black restaurant workers received fewer tips than their white coworkers even before the pandemic.
The U.S. Census Bureau reports that 47 percent of restaurant workers are minorities. With Black restaurant workers making up a large portion of the service industry and making the least tips in many situations, this is the ideal clusterfuck of circumstances to increase the wage gap.
Now, with the current rates of inflation, service workers are affected even more. The Federal Reserve combats inflation by raising interest rates. As a result, people tend to spend less on luxuries such as dining out. And when they do, they rack up smaller bills than they do during better economic times.
Restaurant workers rely heavily on their tips. Let’s not forget that the government only requires businesses to pay their tipped workers $2.13 per hour in wages, according to the Department of Labor.
With borrowing costs rising and supply chain shortages still in effect, many food and beverage industries are putting the burden on their customers to pay their employees living – through tips. Customers aren’t having it, and the Black employees are suffering the most.
What are your thoughts on tipping?
