Big Labor Declares A War on Tipping

Ryan Williams Senior Advisor, Worker Center Watch
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Workers like tips. For millions of restaurant servers and bartenders, tips are cash-in-hand that can be spent that day for groceries, bills or entertainment. The money isn’t bad either. According to recent Census Bureau data, the average hourly wage for a restaurant employee earning tip income is $11.82, by most definitions lifting individual earners into the American middle class. Top earners can collect $24 an hour or more.

Despite these facts, union front groups known as worker centers are leading an aggressive campaign to eliminate tipping from American restaurants. One of the more prominent critics of tipping is labor activist Saru Jayaraman, co-founder of the Restaurant Opportunities Center (ROC). Jayaraman has attempted to label tipping as sexist, racist and other hot-button terms meant to stir emotion and shame consumers.

But the provocative terms used by Jayaraman and other activists conceal the true reason behind organized labor’s war on tips. The Service Employees International Union (SEIU) and other unions want to organize the restaurant workers, as evidenced by the endless series of strikes staged against well-known brands demanding “$15 and a union.” Even if they were successful in organizing restaurant workers, however, unions have the sticky problem of collecting dues from tipped workers. Membership dues are a union’s lifeblood: equaling roughly a 1-4 percent deduction from every union member’s paycheck. For union members, the money is gone before they ever see it – much like taxes or health and retirement payments. Out of sight, out of mind.

Tipped workers, however, know exactly how much money they’re taking home each night. As a result, employees who receive tips would have to cut a check or hand over cash each month to their respective union. Having to dig into their pocketbook to hand over their hard-earned dollars to a union steward would cause many workers to question what they’re getting in return for that investment. For Big Labor that’s a big no-no, and unions know they would quickly lose that cost-benefit analysis.

The uniquely American system of tipping has become institutionalized because workers and consumers prefer it. It’s a concept that matches our national ethos. A worker’s earnings are essentially uncapped – based on performance and mastery of one’s skillset. But unions have always been hostile toward performance-based pay, whether it’s in public school systems or on the factory line. The system of merit pay through tipping also makes it difficult to collect regular union dues. So, it’s no surprise that unions are pushing to eradicate tips – it’s just amazing that it’s taken them so long.

The unions’ anti-tipping campaign heavily relies on nonprofit worker centers that act like unions without having to follow the laws governing organized laborgroups. These worker centers carry a bevy of semi-inspiring monikers like the Restaurant Opportunity Center, Fast Food Forward, and Fight for 15. With union membership in steep decline, unions’ use of worker centers to organize restaurants is a Hail Mary pass into the fog: a last ditch effort to reverse hemorrhaging membership numbers.

From Washington, D.C. to Seattle, various groups of servers are bartenders are speaking out against the effort to eliminate tips. Their grassroots effort to defend their wallets, however, faces the daunting Goliath of big labor – which has deep pockets and pours millions of dollars into lobbying and manufactured protests. Organized labor’s war on tips is certain to continue so long as unions, desperate for dues, ignore what workers actually want.

Ryan Williams is a senior adviser to Worker Center Watch and a former spokesman for Governors Romney and Sununu.