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Blame Corporations for the Out Of Control Tipping Culture

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Tipping has consumed America’s food industry. It seems impossible to go anywhere for food without being expected to tip nowadays. Even for a small order of a pastry or a coffee, it’s commonplace for a small screen to prompt Americans to tip 10% to 20%. Tipping has become far too common in the United States because of greedy corporations, and it’s time to change the tipping culture.

During the final quarter of 2022, about 48% of fast food sales included a tip. Fast food corporations have much deeper pockets than the average American, and with the California minimum wage being $15.50 per hour, the federal minimum wage being a shockingly low $7.25 per hour, and even lower at $2.13 in states with a tip credit, such corporations should place more value on their employees. It’s clear that corporations rely on consumers to pay their employees when they should be the ones bearing the responsibility of compensating their employees fairly. 

Instead of feeling guilty for not leaving a tip, Americans should be frustrated with corporations that make them responsible for workers’ incomes. The awkwardness of pressing “no tip” on the small screen is nothing compared to the impact corporations have on a worker’s livelihood by underpaying them. Traditionally, tipping was only expected in restaurants or taxi cabs, but now Americans are expected to tip for a cup of coffee. Starbucks workers have organized numerous strikes for higher pay and better working conditions. They have also protested the company’s union-busting methods, Starbucks management’s illegal attempts to prevent employees from unionizing. While their workers fight for fair pay and the basic right to unionize, Starbucks remains the largest coffee chain in the United States with an annual revenue of over $33 billion. It’s disgusting that the company’s immense success is built off of the exploitation of workers and consumers alike. 

The majority of Americans feel overwhelmed by the high cost of living, with inflation driving up the costs of everything in the United States, including groceries, rent, and gas. With 58% of Americans living paycheck to paycheck, tipping may be detrimental to the average American’s finances. This limited financial freedom has caused most Americans to lower their spending, and tipping culture is stretching their finances even further. A person should only tip if they are financially secure, and most Americans are not currently financially stable. 

Consumers have been forced to take on the responsibility of compensating service employees’ wages, which is an even bigger issue in states with a tip credit. Tip credits allow an employer to use a percentage of an employee’s tips towards fulfilling their minimum wage, which greatly limits their earning potential. This means that the tips an employee makes can go towards the employer’s minimum wage obligation. In states with a tip credit, customers essentially pay workers’ salaries directly. States like California, on the other hand, allow employees to collect tips in addition to their minimum wage, enabling them to earn more money overall. The absence of a tip credit also reduces the consumer’s obligation to tip.

If workers were paid a living wage, tips would not be necessary to supplement their income. Corporations should be making sure that their employees are compensated fairly instead of passing that duty to consumers. It’s still important to acknowledge and reward the hard work in food and hospitality services through tipping, but American society needs to put pressure on corporations to pay their employees more in order to reform the tipping culture. Tips should be considered a bonus rather than the primary source of a worker’s income.


Zahira Vasquez is an Opinion Intern for the spring 2023 quarter. She can be reached at zivasque@uci.edu.