I’m opposed to gratuity tipping. Not to the people who serve me, but to the system that makes them depend on my mood, my math, and whatever’s left in my wallet after the bill comes. Nobody likes paying extra. But my problem with tipping isn’t just the cost. It comes with some real negative consequences, and most of them land on the workers.
The Numbers#
The federal minimum wage is $7.25 an hour, and it hasn’t changed since 2009.
The federal minimum cash wage for tipped workers is $2.13 an hour, and that one hasn’t changed since 1991. Employers are allowed to count up to $5.12 an hour of a worker’s tips toward the regular minimum wage. That’s called the “tip credit.” If tips don’t add up to at least $7.25 an hour, the employer is supposed to make up the difference.
Many states set their own, higher minimums, and a handful, like California and Washington, don’t allow a tip credit at all. In Illinois, tipped workers get at least 60% of the state minimum wage, and Chicago is phasing out its tip credit entirely by 2028. But in plenty of places, $2.13 is still the starting point.
It Hides the Real Price#
The price on the menu isn’t the price you pay. It’s like sales tax getting added at the register, except at least sales tax is a set rate. With tipping, you’re expected to do the math yourself and add another 15%, 18%, 20%, or more on top of the bill.
And that’s on purpose. Cornell professor Michael Lynn, who has studied tipping for decades, told NPR’s The Indicator that customers judge how expensive a restaurant is by its menu prices. A restaurant with no tipping and 15% higher prices looks more expensive than one with lower prices and tips, even though you pay the same either way. When 12 Joe’s Crab Shack locations tried dropping tips and raising prices, their online ratings went down, and most of them went back to tipping.
15% Became 20%, and Prices Went Up Too#
Not that long ago, 15% was the standard tip for good service. Now 20% is the “normal” tip, and the payment screen suggests 22% or 25% before you’ve even signed.
Here’s the part that bugs me: tips are a percentage, so they already go up when prices go up. A $20 meal turned into a $30 meal, and the tip went up with it. Raising the percentage on top of that means we’re paying more twice. And now the screen asks for a tip at the coffee counter, the self-serve frozen yogurt place, and the bakery where I picked up my own order.
It Puts Servers at the Mercy of Lousy Customers#
When most of your pay depends on keeping the customer happy, you have to put up with a lot. Servers have to smile through rude comments, unreasonable demands, and worse, because pushing back could cost them their rent money.
The research backs this up. A study by researchers at the University of Notre Dame, Penn State, and Emlyon Business School, reported by NPR, found that depending on tips, combined with being required to “serve with a smile,” creates a power imbalance that increases sexual harassment. More than 70% of female restaurant employees have reported being sexually harassed, and the restaurant industry generates more harassment complaints to the EEOC than any other sector. Women make up about two-thirds of tipped restaurant workers.
Tips aren’t fair in other ways, either. According to Lynn’s research, only a tiny part of a tip has anything to do with the quality of service. In an earlier Planet Money episode, he noted that the weather has about as much influence on tip size as the service does. Attractive, blond, and slender waitresses get bigger tips. Black servers get lower tips than white servers, even for comparable service.
This is ending up in court. In October 2026, three former Chili’s workers in New York filed a proposed class action against parent company Brinker International, saying the tipped wage and customer rating policies forced female servers and servers of color to tolerate sexism and racism to earn tips. They’re asking the court to stop the company from paying a subminimum wage.
It Lets Employers Pay Less#
The tip credit allows employers to pay less than minimum wage. Think about what that says. The minimum wage is supposed to be the least a person can be paid for an hour of work, and the tipped wage is basically an employer saying, “If I were legally allowed to pay you less, I would.”
Tipping in America also has an ugly history. It caught on after the Civil War, when employers like railroad car companies hired formerly enslaved Black workers and paid them little or nothing, leaving them to live on tips from customers. The Washington Post laid out that history and the research on tipping’s unfairness, and it’s worth a read.
“But Servers Make More With Tips”#
Some servers do make more with tips than they would with a flat wage, especially at busy restaurants on Friday nights. I understand why some of them like the system.
But tips are unpredictable. A snowstorm keeps everyone home. A Tuesday lunch shift is dead. A big group leaves a pittance. A flat, reliable wage at a predictable rate might balance out over a year, and it comes with something tips don’t: knowing what your paycheck will be before you get it. That makes it a lot easier to pay the bills, qualify for a loan, or plan ahead. Tipping also isn’t shared fairly with the cooks and dishwashers in the back, who work just as hard and don’t get a cut.
We Tip Because We Have To#
Here’s the bottom line: I still tip. I’m not going to punish a server for a system they didn’t create. We have to tip, because restaurants and other employers aren’t paying a livable wage.
But I’d rather see the real price on the menu and know the people serving me are getting paid fairly, no matter how busy it is, what the weather’s doing, or who sat at their table. Pay workers a real wage, put it in the price, and let a tip go back to what it was supposed to be: a little extra for exceptional service, not a worker’s whole paycheck.
Sources: U.S. Department of Labor: Minimum Wages for Tipped Employees, Nation’s Restaurant News: Former Chili’s workers allege sex and race discrimination in tip credit lawsuit, NPR: Tips and “service with a smile” fuel sexual harassment in restaurants, Washington Post: I dare you to read this and still feel OK about tipping, NPR Planet Money: Why Do We Tip?, NPR The Indicator: Why Americans Can’t Quit Tipping.
