Saru Jayaraman has been trying to change tip culture for more than 20 years. It’s finally working
In the last year, Saru Jayaraman has been asked to tip baristas in Berkeley. She’s been asked to tip a florist in New York City. And, at the airport, she’s been asked to tip by a self-serve checkout kiosk manning a concession stand, no human employees in sight.
“Who exactly am I tipping?” she asks.
It’s exhausting, but she sees the upside.
For decades, Jayaraman has advocated for fair wages for restaurant employees. And tipping fatigue is helping to garner a groundswell of support for her cause.
For the last two years, we’ve been talking about tip fatigue. There are reams of data to back up what feels like an onslaught of asks: a Bankrate survey found 2 in 3 Americans feel negatively about tipping. Seven out of 10 Americans think tipping is expected in more places than ever, according to the Pew Research Center. More than half of Americans believe businesses are swapping out employee salaries for tips, passing responsibility for workers’ wages onto the customer.
It’s exactly that problem that Jayaraman is fighting against. In 43 states, there’s an exemption called the subminimum wage that means if your employees make over the federal minimum wage in tips, you can pay them less because the tips will make up the difference.
“It’s a disease that comes from corporate greed,” she says. “These corporations are trying to fool all of us into thinking it’s okay for them not to pay people.”
Wage wars
Jayaraman spent her childhood in India, swathed by the smells of her great-grandfather’s restaurant. When she was a teen, her parents immigrated to the U.S., and she eventually attended Yale Law School.
She’s never worked in a restaurant, but when 73 employees of the restaurant at the top of the World Trade Center were killed on September 11, she was asked to help start a relief fund and center for displaced workers and the victims’ families.
Over time, that effort evolved into One Fair Wage, a national organization run by Jayaraman that advocates for the elimination of a subminimum wage.
It started a fight that would come to define her life. “It very much has become my life passion,” she says.
Current tipping culture is offering her an unexpected assist, raising awareness for how opaque tipping can be.
For one, there’s no way to tell if employers are using tips to offset their employees’ wages. And two, there’s no way to tell if the money you’re paying when you hit “20%” on the screen is making its way to employees at all.
And in tandem with post-pandemic economic recovery, and a proliferation of companies trying to get in on the subminimum wage, One Fair Wage is scoring some wins.
They’re on the ballot this year in Massachusetts, Arizona, and Michigan, and Washington D.C. and Chicago last year passed ordinances requiring restaurants to follow the minimum wage regardless of tips on top. (Square reports 60% of restaurants in Chicago are already doing this, despite a five-year phase-in grace period.)
“The Chicago restaurant industry has not tanked,” she says. “Business is booming.”
Why we tip
Tipping began with the best of intentions. Back in the Middle Ages, it was a way for feudal lords in Europe to show their appreciation for their vassals and serfs.
Wealthy American tourists, traveling to Europe on steamer ships, brought it back with them in the 1850s. After slavery was abolished in 1865, employers used tips as a way to justify paying no wages to newly freed slaves who found work as servers, barbers, and porters.
In 1938 when the U.S. set the first nationwide minimum wage, the exemption for tipped workers was codified into law. Employers didn’t have to pay their workers the same as everyone else if they earned tips. There’s still a federal subminimum wage today in 43 states. It’s $2.13 an hour.
Americans have hated tipping for almost as long as they’ve practiced it. In 1899, the New York Times called it the “vilest of imported vices.” William Scott, in The Itching Palm, called it “a moral disease.”
They still do:
- 35% of Americans think tipping culture is out of control, according to a 2024 Bankrate survey
- 25% of U.S. customers will actually tip less when presented with suggested tip amounts on a touch screen
- Research from Cornell University indicates people tip not from generosity but to avoid feeling guilty or ashamed of contravening a social norm
- 29% of Americans see tipping as an obligation, according to Pew, rather than a choice (21%)
So why has tipping been so polarizing? In part, because it draws on our basest — and most inhumane — instincts. Some research shows quality of service doesn’t determine a tip — inherent bias does. White servers make more than servers of color and younger servers make more than older ones.
“Living on the largesse of customers also means living on the biases of customers,” Jayaraman says.
Despite all that, research from servers themselves shows that they’ll pick voluntarily tipping every time.
Cortney Norris, an assistant professor of hospitality at Oklahoma State University, says the idea of controlling one’s own destiny every day is a powerful one.
When she interviewed servers for her research, many said they’d forgo even the automatic gratuity on large parties, opting instead to gamble for the possibility of more.
“They feel they have autonomy over their income: I can do a really great job, pull out the charm, and I can make a lot more money than whatever it is they’ll pay me an hour.”
It leaves Norris wondering, what can we implement that’s fair?
“It’s the only industry where the customer supplements employee wages,” she says.
Boiling point
For years, restaurants have experimented with no-tip policies, largely without success. In 2015, Union Square Hospitality Group and Shake Shack owner Danny Meyer announced he’d get rid of tipping at all his restaurants. Losing staff and facing down the aftershocks of the pandemic, he walked those policies back five years later.
Jayaraman argues eliminating tipping at a few restaurants, even influential ones, isn’t enough because it creates an uneven playing field. Her solution to a system that’s been broken for 200 years? Change the law.
Jayaraman’s views are controversial. The National Restaurant Association, the trade organization that lobbies for the $551B restaurant industry, has worked tirelessly to keep the subminimum wage as is.
“We have our work cut out for us,” NRA president Michelle Korsmo told Bloomberg in May. “The important thing for us is to get out early and say that this business model for the restaurants that employ it, it actually allows for them to keep prices on the menus lower and provide a really well-paying job.”
The NRA has 40k+ members from 500k of the ~750k restaurants across the country.
(A New York Times investigation last year found the group, which represents owners and operators, was using unwitting workers’ own money to lobby for keeping their own wages down.)
Each side flings data back and forth. The association argues raising wages will mean raising prices, which will deter restaurant-goers and ultimately lead to fewer tips and lower earnings.
Jayaraman says in California, one of the seven states that pays all workers against the same minimum, that hasn’t happened.
The NRA says since Washington D.C. adopted a higher minimum wage, full-service restaurants have cut 2.8k+ jobs.
For her part, Jayaraman calls the group “the other NRA.”
Will we ever agree? Probably not.
“We’re starting to ask ourselves more questions as consumers about where this is going and why,” Norris says.
“Tipping fatigue is the start of this journey to change.”
But in the meantime… how much do we tip?
Early this week, Diane Gottsman sat at home in San Antonio, Texas, with her poodle Marty and her maltipoo Wilson, watching a technician setting up her new computer.
It took hours to get the machine up and running properly. He struggled with a finicky wifi connection, and kept Marty and Wilson company when someone else dropped by and Gottsman had to answer the door.
When he finished, Gottsman handed him a $20 bill.
“When we do something, it should feel good to us,” she says. “Did I have to give him anything? No. Would I have felt bad if I didn’t? No. It was a form of gratitude.”
Gottsman is a national etiquette expert and the founder of The Protocol School of Texas, and she suffers from tip fatigue just like anyone else. But she has no qualms about hitting “no tip” when the screen spins toward her and the prompts offer their gentle nudge.
Despite the proliferation of asks, Gottsman says, it’s important to remember that tipping is discretionary.
Whether it’s coming from a coffee shop regular or a feudal lord, at its best it’s an opportunity to say thank you for your service.
There is, Gottsman says, another reason behind years of tip fatigue. We’re using more services more often.
“Years ago, we didn’t take our pets to the groomer, we took them outside with the hose,” she says.
When a client asked angrily whether he had to tip each of the four times he frequented his local coffee shop in a day, Gottsman gently suggested he invest in a Keurig.
