Personal Finance

Leaving a tip is an American custom. Why that's a problem

Why tipping is an American custom
Why tipping is an American custom

Tipping is a quintessential American custom. In the U.S., consumers tip for services ranging from baggage handlers at the airport to housekeepers at hotels.

But according to some analysts, tipping has created an environment where restaurant servers are subjected to sexual harassment and low pay. The pandemic has only exacerbated those problems.

About three-quarters of tipped workers in the restaurant industry are women and almost half are people of color.

In a study by One Fair Wage and the Food Labor Research Center at U.C. Berkeley , 83% of restaurant workers reported that their tips have declined during the Covid pandemic and more than 40% experienced a change in the frequency of unwanted sexual comments from customers.

With the pandemic leaving millions to do essential work for low pay, there have been renewed calls for a $15 minimum wage and the elimination of the so-called tipped minimum wage — the base salary for many restaurant workers.

Forty-three states, including Georgia, North Carolina and Texas, have a tipped minimum wage for workers, in some cases as little as $2.13 an hour.

Still, many in the restaurant industry oppose the proposed changes, saying they would lead to higher menu prices and fewer hours for workers. According to the National Restaurant Association, the pandemic has already taken a devastating toll on the industry, wiping out 2.5 million restaurant jobs and more than 110,000 eating and drinking establishments in 2020 alone.

Watch the above video to find out what the $15 minimum wage and the elimination of the tipped minimum wage would mean for restaurants and their employees.

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