Dominoes has a new promotion that rewards customers for tipping. For every $3 that customers put into a tip, they’ll get $3 off a future order. The ad campaign for this promotion is meant to play off the big attention given to stories about “tipping fatigue” and so-called “guilt tipping.”
But what Dominos isn’t doing, is the one thing that might actually help. They are not increasing the pay to their workers. Though the company says that it considers this promotion a labor recruitment strategy, what they’re pointing out to potential workers is how they’re encouraging customers to tip, not how they’re raising pay.
The solution to tipping fatigue isn’t encouraging more tipping. It’s paying workers a living wage.
Not only has the minimum wage been frozen since 2009, many tipped workers get a sub-minimum wage as low as $2.13 per hour. For these workers in particular, tips aren’t some kind of bonus or reward. It’s the majority of their pay. Many of these workers also don’t receive health care or any other benefits, which only increases the importance of tips.
However, in many states employers are allowed incredible leeway over tips. They can deduct credit card fees from workers’ tips. They can force workers to put their tips into a pool where the employer decides how they are distributed. Some restaurants have decided to simply pocket tips to add to the bottom line.
Even when tipped workers get to keep what they’re given, the whole process of tipping can result in an increase in sexual harassment by providing an incentive for both workers and management to look the other way.
The U.S. minimum wage is a fraction of what it is in nations like Australia, the UK, or Germany, where tipping is much less common and generally reserved for special circumstances. Tips in those countries can still be given when someone feels a worker has performed exceptionally, but they don’t have to be given because wages are high enough to ensure that workers aren’t dependent on the unpredictable largess of customers.
Even if the U.S. minimum wage had been simply adjusted for inflation, it should now be at least $10 per hour. But that only works out to $20,000 a year for a full-time employee—far too low to be a livable wage in any part of the nation. While legislators sometimes like to pretend that the minimum wage affects only a small number of teenage workers, according to the Economic Policy Institute, 21% of the U.S. workforce is composed of minimum wage and sub-minimum workers. In some states, over a third of workers earn minimum wage.
Tipping can be irritating, especially when those tipping charges are automatically added to bills or tacked onto services that in the past haven’t involved tips. But the cure to this is not encouraging more tips and persuading consumers to accept tips as part of every transaction.
“Tipping culture” is just another way of saying that businesses are holding down wages, disguising cost increases, and making workers dependent on a system that requires them to put up with abuse from both their employer and customers.
Despite dire claims from industries that hire a large number of minimum wage or tipped workers, raising the minimum wage doesn’t reduce jobs. That’s not just true for large corporations, but also for small businesses.
Why doesn’t Domino’s do something really radical to help its customers with tipping fatigue—increase its pay to workers.
