Is tipping fair?

Summary

Title: Is Tipping Fair?

Podcast: Today, Explained by Vox
Hosts: Jacqueline Hill and Peter Balin
Release Date: July 27, 2025
Description: Today, Explained is Vox's daily news explainer podcast. Hosts Sean Rameswaram and Noel King guide listeners through the most important stories of the day.

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Introduction

In this episode titled "Is Tipping Fair?", hosts Jacqueline Hill and Peter Balin explore the intricate dynamics of the tipping system in the United States. They examine whether the current practices are equitable for workers and discuss the ongoing debates surrounding tipped wages and tipping culture.

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The Current State of Tipping and Tipped Minimum Wage

The conversation begins with an overview of the tipped minimum wage system, where workers like servers and bartenders receive a lower base wage under the assumption that tips will compensate for the difference. Peter Balin explains:

"A server at a fine dining restaurant in Wisconsin where servers make $2.33 an hour. And what you take home is really just your tips." (03:00)

This system is intended to ensure that tipped workers earn at least the standard minimum wage when tips are factored in. However, enforcement is often weak, leading to widespread wage theft and financial instability for workers.

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Initiatives and Policies in Washington, D.C.

The hosts delve into the specific case of Washington, D.C., where advocacy groups like Rock D.C., led by Sophie Miyoshi, have been at the forefront of pushing for higher wages for tipped workers. Balin outlines the history:

"In 2016, DC agreed to raise their minimum wage to $15 an hour for everyone except tipped workers. They said the minimum wage for tipped workers would top off at $5 an hour." (05:32)

Sophie Miyoshi and her organization responded by spearheading a ballot initiative to increase the tipped minimum wage to match the general minimum wage. Despite opposition from the Restaurant Association—which argued that higher wages would lead to business closures and job cuts—the initiative passed in 2018 (06:43). However, the D.C. City Council later overturned this change due to intense lobbying efforts (06:59).

The COVID-19 pandemic shifted tipping behaviors, as increased customer tips helped sustain struggling restaurants. This momentum led to a second ballot initiative in 2022, successfully raising the tipped minimum wage incrementally to $12/hour by 2028 (08:32). Nonetheless, business owners like Tony Tomeldon faced significant financial strain:

"In one year, my payroll doubled. I mean, for the first time in 15 years here, I raised prices." (09:35)

This pressure contributed to the closure of establishments like Brookland's Finest (10:05).

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Impact on Restaurants and Workers

While business owners grapple with increased payroll costs, workers have experienced tangible benefits. Max Halle, a bartender at the Grand Duchess, shares his perspective:

"It's been good for me. I can buy more groceries on time. My tax returns look a little cleaner." (11:10)

However, some workers fear that higher base wages might lead customers to tip less, potentially reducing their overall income. Despite these concerns, data indicates that median hourly wages for servers and bartenders have risen since the policy's implementation, though they remain below a living wage.

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Challenges in Policy Implementation

Peter Balin emphasizes the complexities involved in changing the tipped wage system:

"Implementing change, it's messy. And if you're going to raise the tip minimum wage via a ballot measure in a place with a strong restaurant lobby, well, be ready for some backlash." (12:56)

Despite the challenges, Washington, D.C.'s restaurant scene has neither collapsed nor flourished dramatically, suggesting a nuanced impact of the wage increases (12:50).

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Historical Context of Tipping

The episode provides a historical backdrop to the tipping system. Nina Mast from the Economic Policy Institute articulates:

"Tipping goes back to the pre-Civil War times in the US. There were wealthy Americans who were vacationing in Europe and noticed the practice of tipping for good service. They brought it back to the US as a trendy practice among the elite." (24:01)

Post-Civil War, tipping became a tool to underpay African American workers in service industries. The Fair Labor Standards Act of 1938 established minimum wage laws but excluded sectors reliant on tipping, solidifying a system where workers depended heavily on customer gratuities for their income.

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Taxation on Tips

Richard Rubin, a tax policy expert, discusses recent legislative changes regarding tip taxation:

"Before 2025, wages and tips were effectively the same thing for tax purposes. Congress changed this by treating tips as 'voluntary payments' or 'gifts,' exempting the first $25,000 of tips from income tax." (20:27)

However, this policy includes limitations:

• Thresholds: The tax exemption starts to phase out at higher income levels (e.g., single individuals earning over $150,000 and married couples over $300,000).
• Payroll Taxes: Tips remain subject to payroll taxes, affecting workers regardless of their income tax status.

Rubin questions the sustainability and equity of these changes, noting potential disparities between tipped and non-tipped workers:

"What makes a tipped worker special for tax purposes? It creates inequity within the workforce." (19:41)

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Consumer Perspectives on Tipping

The hosts address common misconceptions about tipping. Sophie Miyoshi points out:

"People don't realize that they're actually paying the lion's share of their server's wages through their tips. When you fail to tip, you're denying them their wage." (29:41)

This challenges the notion that tipping should solely be a reward for good service, highlighting the systemic dependency of servers on customer gratuities.

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Conclusion

The episode underscores that the tipping system in the U.S. is deeply rooted in historical inequities and is maintained by both economic interests and cultural norms. While initiatives to raise the tipped minimum wage demonstrate progress, they also reveal the significant pushback from the restaurant industry. The conversation invites listeners to reconsider the fairness and sustainability of the current tipping practices.

Jacqueline Hill aptly summarizes the complexity of the issue:

"There’s a whole economic reality behind the tipped wage." (13:17)

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Notable Quotes with Attributions and Timestamps

• Peter Balin: "A server at a fine dining restaurant in Wisconsin where servers make $2.33 an hour. And what you take home is really just your tips." (03:00)
• Sophie Miyoshi: "There's so many problematic things about the tipped minimum wage." (04:36)
• Tony Tomeldon: "In one year, my payroll doubled. I mean, for the first time in 15 years here, I raised prices." (09:35)
• Max Halle: "It's been good for me. I can buy more groceries on time. My tax returns look a little cleaner." (11:10)
• Sophie Miyoshi: "People don't realize that they're actually paying the lion's share of their server's wages through their tips." (29:41)
• Richard Rubin: "Tips are like a gift... it's not taxable income to you." (20:27)

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This detailed summary captures the essence of the "Is Tipping Fair?" episode, highlighting key discussions, insights, and conclusions while providing context and direct quotes for a comprehensive understanding of the topic.

Transcript

[Jacqueline Hill]

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[Brady]

Support for this show comes from Strawberry Me. Be honest. Are you happy with your job or are you stuck in one you've outgrown or never wanted in the first place? Sure, you can probably list the reasons for staying, but are they actually just excuses for not leaving? Let a career coach from Strawberry Me help you get unstuck. Discover the benefits of having a dedicated career coach in your corner. Go to Strawberry Me unstuck to claim a special offer.

[Jacqueline Hill]

If I didn't get tips, I wasn't getting paid.

[Richard Rubin]

If you're a bartender and you can't make good tips, then you're just not a good bartender.

[Peter Balin]

Yeah, six dollar tip.

[Jacqueline Hill]

So an 87% tip. This is. Explain it to me from Vox. I'm Jacqueline Hill. My name is Brady. I'm with your server for today.

[Sophie Miyoshi]

Awesome.

[Jacqueline Hill]

You're more than. Look at the food, man. Do you have any recommendations? What are your favorites? My favorite in the menu? This is seasoned, three wet pots, chicken. You like spice?

[Peter Balin]

I like spice. All right, we've got two chilies. We'll make it happen.

[Jacqueline Hill]

Yeah, let's do it.

[Peter Balin]

Okay. Jonquin, this is me, Peter Ballin, on Rosen, producer, and today explain and explain it to me. What are we doing today?

[Jacqueline Hill]

Okay, so one, we're bonding in a team like fashion, which is very important.

[Peter Balin]

Very important.

[Jacqueline Hill]

But even more importantly, we're out and about because we are doing an episode about tipped wages. And what better way to do that than to go to a place where they tip, AKA a restaurant? So we're having lunch.

[Peter Balin]

All right, yes, we did have some delicious lunch, but I gotta admit that chicken was not actually that spicy.

[Jacqueline Hill]

Okay, I'm glad you said that because it was good. But, like, I was like, this is not that hot.

[Peter Balin]

No, no, not at all.

[Jacqueline Hill]

But hey, it could just be us. Maybe we're used to spice.

[Peter Balin]

Maybe.

[Richard Rubin]

I don't know.

[Peter Balin]

Those two chilies did. Like, they were lying. Okay. But we weren't just there to check out the Chili report. We were also there to discuss a bunch of calls that we got from our listeners. They had a lot to say about tips and wages.

[Sophie Miyoshi]

I really want to know how to.

[Jacqueline Hill]

Tell when someone is being paid serving minimum wage, because when they flip that little POS tablet towards you asking for the tip, I always feel like I'm in a moral crisis of whether or not I tip and how much I should t. Because how much are they being paid?

[Sophie Miyoshi]

My main question is, what do servers actually take?

[Jacqueline Hill]

At the end of the day, I'm.

[Peter Balin]

A server at a fine dining restaurant in Wisconsin where servers make $2.33 an hour. And what you take home is really just your tips.

[Jacqueline Hill]

We'd all like a better solution to this, but until then, we're just taking home our tips.

[Peter Balin]

All right, so we're gonna split up, right?

[Jacqueline Hill]

Yes. I'm gonna find out the history of tipping, and you are gonna talk to some people with sk and then we're gonna come back and talk about what we found out.

[Peter Balin]

All right, let's do it.

[Jacqueline Hill]

Yeah. Okay, Peter, you went out, you did some reporting. What'd you find?

[Peter Balin]

Okay, J.Q. well, we need to start with something absolutely riveting. A definition. So basically, there's this thing called the tipped minimum wage. It's a way more minimum wage just for workers who get tips, like servers or bartenders. At the federal level, it's just $2.13 an hour. The idea is tips will help those workers earn at least minimum wage. And if they don't, employers are supposed to pay the difference. But right now, states and cities all over the country are kind of like our caller from Wisconsin. They're wondering, should this weigh more minimum wage? Should it change? Should they get rid of it? And one of the places figuring this out is where you live. The place we had lunch, Washington, D.C.

[Jacqueline Hill]

A place I know very well.

[Peter Balin]

So to learn about how this is playing out in D.C. i went to go meet up with Sophie Miyoshi. She is executive director of Rock D.C. an advocacy group for restaurant workers.

[Sophie Miyoshi]

And this is our extremely messy office.

[Jacqueline Hill]

Yeah.

[Peter Balin]

Am I seeing a pinata here?

[Sophie Miyoshi]

And some pinata. We have some puppets of the council members.

[Peter Balin]

She has been out there leading protests, calling for tip workers to get paid more.

[Sophie Miyoshi]

There's so many problematic things about the tipped minimum wage. So one of the first things is wage theft. Technically, the employer is supposed to make up the difference. If you're not making the full minimum wage on top of the tipped minimum wage, most folks aren't paying attention to that. They're just trying to survive. So it's really easy to steal from tipped workers because of the system that is in place.

[Peter Balin]

Sophie says to understand what's going on here, we got to go back in time a bit. In 2016, the fight for 15 was popping off. You remember that?

[Jacqueline Hill]

Mm, I remember that. Yeah.

[Peter Balin]

So DC agreed to raise their minimum wage to 15 bucks an hour for everyone except tipped workers.

[Jacqueline Hill]

Ooh, okay. All right.

[Peter Balin]

They said the minimum wage for tipped workers would top off at $5 an hour.

[Sophie Miyoshi]

And Sophie was like, that's super unfair to restaurant workers. We need to, like, take this on our own.

[Peter Balin]

Sophie and her organization, they start eyeing a ballot initiative which basically puts the question of should the tipped minimum wa go up directly to voters to vote on.

[Jacqueline Hill]

What was the response to the initiative?

[Peter Balin]

Well, as you can imagine, not everyone was into this. The restaurant industry, who'd actually lobbied to keep that tipped minimum wage at five bucks an hour, they came out saying. They said, this ballot initiative, it'll raise labor costs. It'll make restaurants have to close. It'll force bosses to have to cut jobs or hours for workers. And they sent this messaging to voters.

[Sophie Miyoshi]

And restaurant workers, like, spreading fear among workers of, like, oh, my go. My tips are going to go away if this passes. We're just going to get the minimum wage, which was not the case at all. There are many states that this system doesn't exist in, and they're doing just fine.

[Jacqueline Hill]

So, okay, whose messaging prevailed in all of this?

[Peter Balin]

Well, in 2018, Sophie's did the ballot initiative passes.

[Sophie Miyoshi]

I mean, it was exciting that it actually passed despite the efforts of the restaurant association. But one of my colleagues, like, turned to me and said that, you know, we can't really celebrate because it's going to get repealed by the D.C. council.

[Peter Balin]

The D.C. city Council basically says, yeah, no, thanks. We're going to get rid of this thing.

[Jacqueline Hill]

Why'd they do that? What's the thought process?

[Peter Balin]

Well, if you look at some reporting from the time, it says that in the moments after the vote was counted, the restaurant association in D.C. began lobbying politicians to overturn it. They told politicians this was going to cause bosses to cut hours, caused customers to tip less. Sophie and her camp, they were saying, no, no, no, no, no. This is going to be good for workers. This is what the voters voted on. But the D.C. council, they got rid of it. So this thing kind of basically dies, but then a little thing called the novel coronavirus pandemic hits in 2020, and we see restaurant workers get laid off by the Masses and people who don't work in restaurants, they start tipping more. They start donating to laid off employee funds. Our who? Restaurants and tipped workers. It changes.

[Jacqueline Hill]

Yeah, that feels really familiar. You know, I was here in D.C. during lockdown, and my thing once a week was that I'm gonna get takeout from a local restaurant that I love, and I want to stay open, and I'm gonna tip well. And I'm gonna tip well because I'm not spending any other money because I'm just sitting in my house watching WandaVision.

[Peter Balin]

Indeed. Indeed. Okay, so you, me, everyone else, we're all doing that and riding that energy. In 2022, this new initiative hits the ballots, and it asks voters again, should the tipped minimum wage in D.C. go up to match the regular minimum wage?

[Jacqueline Hill]

So we're doing this again.

[Peter Balin]

We are doing this again. And again it passes. This time, the tipped minimum wage starts going up from five to six to eight to ten bucks over a few years. And this year, right as the law decreed that the tipped minimum wage would hit 12 bucks an hour, everything comes to a halt.

[Jacqueline Hill]

Okay, what's going on? And also, how are restaurants responding during all of this?

[Peter Balin]

I mean, if you ask the Restaurant association of Metropolitan Washington, they'll say things had been kind of crashing out for them for a while. They basically pointed to the fact that 74 local restaurants had to close, and they set out on this campaign to kill the tipped wage increase and get it back down to where it had been at $5.35. They basically said, okay, this might good for workers, bank accounts, but this is killing businesses.

[Richard Rubin]

I mean, in one year, my payroll doubled. I mean, for the first time in 15 years here, I raised prices. I can't really go much higher than $5 for a Miller High Life.

[Peter Balin]

This is Tony Tomeldon. Tony T. He's the owner and bartender at a place called the Pug.

[Jacqueline Hill]

Oh, I'm familiar with the Pug. I have. I've had a beer there myself a time.

[Peter Balin]

Yeah, so, you know, like, the bar, it's covered floor to ceiling, and beer signs, bobbleheads, band posters, all these light up Santa Claus.

[Richard Rubin]

I mean, I guess it's your definition of a dive bar. A lot of D.C. stuff and then.

[Peter Balin]

A lot of boxing.

[Richard Rubin]

Pug is actually short for pugilist.

[Peter Balin]

Oh, I had to ask. Do you own a Pug?

[Richard Rubin]

No, it's for pugilists. So that's the boxing stuff.

[Peter Balin]

So Tony T. Who owns the Pug, but not a pug, he also used to own this place called Brookland's. Finest. And he says because of the tipped wage increase, his payroll costs were set to go up 60k this year. And that combined with the fact that his sales were way down, it meant he just couldn't swing things. And he shut down Brooklyn's finest a few months ago.

[Richard Rubin]

We were ringing half what we rang pre lockdown. And it wasn't the only factor, but that's a big factor, is how high my payroll got.

[Peter Balin]

Like you just mentioned, sales were shrinking. I don't know how rents are going here. I know where I live, they're going up and up. So there seemed to be a confluence of factors going on. Why focus on the wage one?

[Richard Rubin]

Because that's the only thing that the city can really step in and affect. Because.

[Peter Balin]

And with the restaurant association lobbying for it and restaurant owners like Tony T calling for it, the city council, they came in for a second time to stop a raise to the tip to minimum wage.

[Jacqueline Hill]

But where are the workers heads in all of this?

[Peter Balin]

So I went to meet Max Halle, a bartender, to find out. He's been in the hospitality industry for over a decade. Making cocktails, serving beers, bringing out patrons. His bar, the Grand Duchess, includes a 20% auto gratuity on bills. And he says raising the tip minimum wage to 10 bucks an hour, it's been good for him.

[Jacqueline Hill]

It's like, I can buy, you know, more groceries on time. My tax returns look a little cleaner. If you're not depending solely on tips, you, you don't have to put up with as much, you know, negative interactions.

[Peter Balin]

Some workers in D.C. have come out against raising the tip minimum wage. They worry if customers know they're making a higher base wage, they'll tip and it'll leave their paychecks worse off overall. But data shows median hourly wages for servers and bartenders. It's now up since this measure passed, even if it's still below what economists call a living wage.

[Jacqueline Hill]

But what is the scene in D.C. like overall?

[Peter Balin]

Well, I reached out to the D.C. restaurant Association. They never agreed to an interview, but when you look at the numbers, it's not actually like DC's restaurant scene has evaporated because of this. If you go deep into Bureau of Labor Statistics data, which I did because I got a little obsessed here, you'll see that there were about a thousand full service restaurants in 2022 before this law took effect. And today there are actually a few dozen more. So, you know, it's not exactly like the restaurant scene is now exploding because of this law, but it definitely has not evaporated either.

[Jacqueline Hill]

What should cities and states that are trying to figure out their whole tipped minimum wage thing take away from this?

[Peter Balin]

So my takeaway is that implementing change, it's messy. And if you're going to raise the tip minimum wage via a ballot measure in a place with a strong restaurant lobby, well, be ready for some backlash.

[Jacqueline Hill]

I feel like I know so much more about what goes into that spicy chicken we had.

[Peter Balin]

Indeed, there's a whole economic reality behind it all.

[Jacqueline Hill]

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[Brady]

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[Jacqueline Hill]

Okay, so we just talked about wages for tipped workers and how messy trying to change them can get. But there's also another side to tipped work that's gotten a ton of attention lately. It's the tips themselves. Politicians can't stop talking about them. But why is that?

[Richard Rubin]

Two words, Nevada and Trump.

[Jacqueline Hill]

That's Richard Rubin. He covers tax policy for the Wall Street Journal.

[Richard Rubin]

So, you know, you now President Trump go to Las Vegas last year and start talking about no tax on tips. And he described the story of meeting a waitress in Las Vegas who kind of came up with this idea or inspired him to come up with this idea. She happened to be beautiful, but I.

[Jacqueline Hill]

Won'T say that, I won't mention that. But nevertheless, a waitress came over and.

[Richard Rubin]

I said, how are you doing? She said, not good, sir.

[Jacqueline Hill]

Why?

[Richard Rubin]

The government is killing me on tips. And she looked at me, she said.

[Jacqueline Hill]

Sir, there should be no tax on tips.

[Richard Rubin]

I said, say it again. You know, it's a great four word, simple slogan, no tax on tips. And so he started talking about it and said, yeah, we can do that. And it's one of the things that he's, you know, he's very good at sloganing. It was just something that he said. And then the policy came after that. And so he talked about it. Then Vice President Harris said, yeah, we'll do something like that too.

[Jacqueline Hill]

Eliminate taxes on tips for service and hospitality workers.

[Richard Rubin]

And it became kind of a bipartisan thing out of nowhere, basically. And they wrote it into the law. No tax on tips, no tax on overtime.

[Peter Balin]

That was a campaign promise of President Trump's.

[Jacqueline Hill]

Now he's signing it into law as part of his so called one big beautiful bill. You know, you mentioned that no tax on tips is an easy forward slogan. Like it's pithy. Yeah. But one thing that is not pithy are bills out of Congress. And now that this is law, I know you've read the fine print. What does it actually say?

[Richard Rubin]

It's got some limits. And so, so Congress was trying to write something that fulfilled the President's promise, largely, but that also would work. So. So your first $25,000 of tips will be income tax free. Basically. There's some limits at the high end. So it starts shrinking once individual income is at 150,000 and married couple income is at 300,000. And it's also subject to payroll taxes, which is the taxes that for many Americans are larger than income tax. Now that only helps People who are paying income taxes are paying federal income taxes. So for lots of people, you may not be paying income taxes in the first place.

[Jacqueline Hill]

Do you think the political will to support this is going to last? Like, is this going to be a long standing policy or is this sort of a flash in the pan that we're seeing?

[Richard Rubin]

It's hard to know. I think there is the appeal of it and it's hard to take something away once it's in the law. So this is the no tax on tips policy itself is in the law through 2028. So Congress will get another bite at this then. One challenge with it that you hear from tax experts is the equity between tipped workers and non tipped workers. Like, what is it that makes a tipped worker special for tax purposes? And now they are. So you can imagine someone is working in a restaurant and they're bartender and they're getting tips and they're gonna pay less taxes on the tips that they're receiving. In that same building, the person who works for the outside contractor who is repairing the roof, the person who's sweeping the floor, none of those people are tipped workers, but they're just, they're part of, they're all part of the same value chain. And as you know, you see those screens everywhere, right? Like, tipping culture has expanded in the US in recent years. Right.

[Jacqueline Hill]

I remember when I went to the Renaissance tour to see Beyonce, I bought merch and there was the option to tip.

[Richard Rubin]

And so like, that's, that's like just a new phenomenon. The Treasury Department is required to come up with a list of traditionally tipped occupations who can get this. So I don't know whether Beyonce merch salesperson will be in that list or not. That's a, it's an open question. I'm sure people are gonna be jockeying and lobbying to get on that list to have it be as expensive as possible.

[Jacqueline Hill]

I'm curious how you think about the money you make on a job that's a tip compared to the money you make on a job that's a wage. Like why, why not tax this particular pot of money?

[Richard Rubin]

Right? So in the past, before 2025, wages and tips were effectively the same thing for tax purposes. That's what Congress basically changed this year. They said you can think of tips more like voluntary payments. They're, they really are like a gift. So if I gave you $100 just because I like you and I want to you give you money, that $100 is not taxable income to you. If you think of tips that way as really gifts from you to the Beyonce merch salesperson or me to the waitress or the bartender, then this is an attempt to reflect that in the tax law.

[Jacqueline Hill]

And I have to ask, how much do you.

[Richard Rubin]

I don't get tips. Oh, sorry.

[Jacqueline Hill]

Listen, how much do you you tip? Is this going to change the way you think of tipping when you're out and about like grabbing coffees and dinner and stuff now?

[Richard Rubin]

No, I think, I mean like in some places, including here in the District of Columbia, they've increased the tipped minimum wage. For me personally, that can sometimes affect tipping behaviors. Like if the people are already getting that base wage. But I think it's a lot harder to be able to say, oh, I'm going to tip you less because I know that you're not going to pay taxes on this. Like that's, that's. I'm not sure this would necessarily make me change tipping behavior, but it is a real difference now that Congress has created between tift workers and others.

[Jacqueline Hill]

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[Jacqueline Hill]

Tipped workers have different taxes now and they also have what's called the tipped minimum wage. The thought behind this is that the server at your favorite lunch spot will make up the difference between what they're paid and the regular minimum wa and the tips they get when they bring you that chicken Caesar salad wrap. But how did we get this system to begin with. That's where Nina Mast comes in. She's a policy and economic analyst at the Economic Policy Institute, a left leaning think tank.

[Sophie Miyoshi]

Tipping goes back to the pre Civil War times in the us There were wealthy Americans who were vacationing in Europe.

[Peter Balin]

Garcon.

[Sophie Miyoshi]

And they noticed that there was this practice of tipping where if you had good service, you gave a small extra fee.

[Peter Balin]

Here you are, my boy.

[Sophie Miyoshi]

And they kind of brought this back with them to the US as this trendy thing that rich people did. But then tipping actually started to fade in Europe, but it persisted in the US And I think we can really tie that back to slavery. You know, once slavery was abolished following the Civil War, workers who were formerly enslaved in agriculture and domestic service, they continued to do these same jobs, but employers didn't want to pay them. So they suggested that the customer paid a small tip to black workers for their services. And it became the predominant way that workers in these jobs were paid.

[Jacqueline Hill]

Ladies and gentlemen, the President of the United States. After many requests on my part, the Congress passed a Fair Labor Standards act, what we call the Wages and Hours Bill.

[Sophie Miyoshi]

So we got a federal minimum wage in 1938 through the creation of the Fair Labor Standards act, which is kind of our landmark worker protection law. It established the minimum wage, it established the 40 hour work week and overtime protections.

[Jacqueline Hill]

It is the most far reaching program, the most far sighted program for the benefit of workers that has ever been adopted here or in any other country.

[Sophie Miyoshi]

But it was a very contentious bill. And to get southern Democrats on board, specifically, it left out workers in agriculture, restaurants, most tipped occupations, domestic work, hotels. It's not a coincidence that all of these sectors were the predominant employers of black Americans. So in the mid-60s, you know, this is during the civil rights movement, a few years after the march on Washington, which called for stronger minimum wage protections.

[Jacqueline Hill]

We marched today for jobs and, and freedom. But we have nothing to be proud of, though hundreds and thousands of our brothers are not here. But they're receiving starvation wages or no wages at all.

[Sophie Miyoshi]

There were amendments to the Fair Labor Standards act that established a minimum wage for workers in the service in service sectors, but it created a minimum wage for tipped workers that was only half of the minimum wage that other workers were eligible to receive in 1996. This changes.

[Richard Rubin]

Right now, employers need to pay 50% of the minimum wage, or $2.13 an hour for tipped employees. Instead of maintaining that 50% employer payment, the bond amendment freezes it for all perpetuity at $2.13.

[Sophie Miyoshi]

So essentially what they did was freeze the tip minimum wage at $2.13 an hour while the federal minimum wage continued to go up. And that's still the situation we're in now.

[Jacqueline Hill]

Nina, which states have eliminated the tipped minimum wage?

[Sophie Miyoshi]

There are seven states that have eliminated the tipped minimum wage and pay tipped workers the same wage as everyone else. Those states are California, Washington, Oregon, Nevada, Montana, Minnesota, and Alaska. And then there are a few localities that have also eliminated or phased out the TIPP minimum wage, like Chicago, and.

[Jacqueline Hill]

Then Washington, D.C. nina, why hasn't this changed? It seems like it would just be a lot easier to give everyone the same minimum wage.

[Sophie Miyoshi]

It's really been an uphill battle, and I think that's in large part due to the lobbying and advocacy efforts of the National Restaurant association, its state affiliates, and groups like the Chamber of Commerce, other employer groups that have really fought tirelessly to prevent the minimum wage from being raised, both for tip workers and for other workers as well. In most states, the minimum wage for tip workers is still less than $4 an hour. Employers are legally required to make up the difference if workers aren't receiving enough in tips to get them up to the regular minimum wage. But in practice, it's extremely difficult to enforce that rule. You know, it's largely left up to the workers themselves to track their hours, track their tips, and then they have to confront their employer if it seems like they're not actually receiving the minimum wage. And we see rampant wage theft in the restaurant industry, particularly among tipped workers. And so you have a system where workers who are disproportionately women, people of color, and immigrants who are often living below the poverty line, they're essentially forced to rely on the kindness of strangers to pay their wages.

[Jacqueline Hill]

I think, as consumers were kind of initially taught that tips are a way to reward good service. You know, someone has a big table, it's crowded, but they're really showing up, and it's like, you know what? I'm gonna give you a good tip. But if, you know you get less than stellar service, it's a way to make it known that you got service you don't like. Do you think that's the way we should be thinking about tips?

[Sophie Miyoshi]

Yeah, I think this is a big misconception. I mean, people don't realize that they're actually paying the lion's share of their server's wages through their tips. So, unfortunately, when you fail to tip your server, you're actually denying them their wage. Obviously, this is a bad system. You know, the burden shouldn't be on customers to be paying their the tipped workers wage. It should be on employers. And that's essentially what advocates are calling for when they are asking for the tip minimum wage to be eliminated. But right now we're in this system where some workers can be paid less just based on the type of occupation they're doing. And that kind of lowers the floor for everyone.

[Jacqueline Hill]

This episode was produced by Peter Balin on Rosenberg, edited by our executive producer Miranda Kennedy, fact checked by Melissa Hirsch and engineered by Patrick Boyd. For an upcoming episode, we're going to be talking about trains. What's been your experience on passenger trains in the US and how does it compare to trains around the world? Do you think American trains deserve their bad rep? Give us a call at 1-800-618-8545. Explain it to Me as part of the Vox Media Podcast Network. For more award winning podcast, visit podcasts.voxmedia.com I'm your host, Jonathan Hill. Talk to you soon. Bye. Support for Explain it to me comes from WhatsApp. Whether it's memes or a vacation itinerary or a heartfelt voice message, your private messages are just that private. They're yours and no one else's. WhatsApp understands that, which is why it's a core component of the app's design. No one, not even WhatsApp, can see or hear your personal messages. That includes personal calls, plus any documents, photos or media that you share in your personal chat. WhatsApp makes sure your personal messages stay yours. WhatsApp message privately with everyone. Visit WhatsApp.com privacy to learn more.