Should Service Industries Pay Employees Minimum Wage – Yes
Somewhere along the way, the definition of the word, Tip, has changed. Back in those "good ole days" when a tip was a gratuity, it was a simple expression of a job well done. I remember when I was seventeen years-old and worked as a waitress in a Truck Stop in Mississippi. My employer paid me $1.50 an hour to wait and clean tables, tote heavy plastic bins full of dirty dishes from the tables to the kitchen sink in back. I was on my feet for over eight hours, walking back and forth, bringing heavy containers of ice from the back to the cooler in front. It was expected by the employer and the government that those we waited on would supplement our wages. We were not taxed on our tips in 1972. In fact, the government had no idea how much or how little we actually earned. It was a very rare day that I earned enough in tips to bring my pay up to minimum wage per hour.
It wasn't long after I left the service industry that the government realized it was losing money that could be taken from hard-working folks and dole it out to Senators and Congressmen asking for Pork Money. Suddenly, the employer was in charge of the tips so he could report your earnings to the State and Federal authorities. The employer could pay a sub-minimum wage, use your tips to bring your wage up to the minimum, then keep any monies over the set minimum wage and not report the excess if he so chose. It does not take an Einstein to see the injustice in this situation.
There are, of course, many more honest employers than dishonest. However, I firmly believe that employers in the service industry should be made to pay their employees the federal mandated minimum wage. That would allow the tip to be what it was initially meant to be, a token of appreciation for a job well done. There are increasingly more businesses that add a twenty percent tip to your bill. Any business that does this enrages me and looses my repeat business. I should be the only one who decides whether or not I leave a tip and if so, how much. By adding the gratuity to my bill, you insult my integrity and steal my ability to feel good about leaving money to the one who waited on me.
I am of the opinion that businesses in the service industry should pay their employees without the expectation that customers will subsidize their pay, bringing it up to minimum wage or better. If they insist that Joe Public pay half or more of their employees' wages, I would expect lower prices on whatever service is being provided and a stopwatch to time my employee for the proper amount of time spent with me. By allowing business owners in the service industry to add a tip to our bill, they or their employees are earning wages that rival those employed in education, nursing, and pharmacy. Consider a restaurant with an employee that is responsibly for six tables. All six tables are occupied. For the sake of argument, we will say that each party occupied their table for one full hour. Three of the tables were served full meals to a total of four persons per table. The other three tables were occupied by three people or less and were served a sandwich and fries. Everyone at the full meal tables were charged a twenty percent gratuity which equaled twenty dollars total. People at the other three tables left tips which totaled $4.75. The total tips for the waiter amounted to $24.75. For that hour worked, the employee earned $2.75 from his employer, making his total pay per hour a whopping $25.50 an hour. I seriously doubt that the waiter received $25.50 an hour at the end of the day. Most likely, with your required tip, the employer paid his employee minimum wage and kept any amount over that.
It really doesn't matter who receives the excess money because, in the end, you were forced to pay your twenty percent extra. The employer argues that your food would cost more if he paid his employees minimum wage. The previous scenario is proof that the service industries are adequately compensated for the service they provide. I say, pay your employees and leave the choice of tipping with the customers.
