Capital

Why Hospitality Included” is the Restaurant Revolution We Need”

In early November, a lawsuit claimed that Shake Shack founder Danny Meyer and fellow restaurateurs had conspired to rip-off their customers and staff by implementing “hospitality included,” also known as “no-tipping.” The plaintiff’s damnation of “hospitality included” not only cites wrongful business practices, but condemns it on the whole as a capitalist failure.

In our previous piece on the subject, I discussed where tipping comes from, and how it has become a central facet of American consumer culture, one that elicits passionate defenses by many. For restaurant and bar owners, these patterns demonstrate that going tip-less will be challenging, and an understanding of tipping’s past will make eradicating it even easier.

And, yes, it should be eradicated. While this lawsuit has brought going tip-less into the limelight for the wrong reasons, it’s already been criticized as “ridiculous.” Eater does an excellent job listing issues within the suit, including: the plaintiff is angry he paid more in these restaurants (and that’s it), cites long-winded Marxist ideology rooted in conspiracy which makes me think of this, lousy evidence like internet comments, and my personal favorite, the consistent misspelling of restaurateur.

Brown’s legal action, perhaps more than a critique of “hospitality included,” is an example of how a good idea can still piss people off. Ultimately, hospitality included is a vehicle for not only eliminating wage inequality among staff, but other social injustices that have developed within the restaurant industry. [1]

When Meyer first announced his decision to go tip-less in 2015, he wrote an open letter explaining the decision. He said that it was not simply for the servers, but for everyone creating your dining experience:

“Unfortunately, many of our colleagues—our cooks, reservationists, and dishwashers to name a few—aren’t able to share in our guests’ generosity, even though their contributions are just as vital to the outcome of your experience at one of our restaurants.”

An analysis of this economic reality is for another time, but ultimately it is lower wages for those in the kitchen and on the floor who are not by your table that make no-tipping a great decision. Their wages should be raised and there should be more equitability in the restaurant industry.

Racial disparities also occur between servers and the kitchen. A study by UC-Berkeley entitled “Ending Jim Crow in America’s Restaurants” explained how waiters (especially at high-end restaurants) may earn salaries five times higher than those doing work behind the scenes. This salary divide coincides with a racial and gender one, with mostly Caucasian servers earning far more than their co-workers of color in the back. Women, regardless of race, on average get paid a quarter less than their white, male counterparts.

If you read the previous piece, you’ll also recognize the leader of the study: Saru Jayaraman, who literally wrote the book on how racial disparities developed within the restaurant industry, including tipping. In her telling op-ed in the New York Times, Jayaraman condenses her historical argument by describing tipping as another, evolved form of segregation and discrimination. These statistics say it all:

“The racialized element of the practice continues to this day: 53 percent of tipped workers in New York State are minorities, and 21 percent live at or below the poverty line. And most tipped workers are not fancy steakhouse servers; they are women working at places like IHOP, Applebee’s and Olive Garden. Based on American Community Survey data, the Restaurant Opportunities Centers United estimates that nearly 70 percent of tipped restaurant workers are women, 40 percent of whom are mothers.”

That’s not to say that servers do not benefit from the change, as not only do their wages increase as well, but without tips they are safer from customer discrimination. For example in a 2014 study, a staggering 80 percent of female waitresses reported sexual harassment while working, something they have little power to rebuke as they need the tips from these customers in their paycheck. Not to mention other studies that have concluded that white waiters get tipped on average more than black servers.

While “hospitality included” advocates like Jayaraman emphasize legislative change, namely the adjustment of minimum wages in cities like New York, power also rests with restaurant and bar owners functioning within existing laws. And there has been much success. The Restaurant Opportunities Center reported in 2014 that restaurants in states that required servers to be paid more had higher per capita sales and more employment labor growth. After Meyer announced his change, applications to his restaurants increased. In 2015, fellow no-tipper Tom Colicchio noted that there was very little push-back, both from staff and customers.

But there’s a catch. What worked for these elite restaurateurs and chefs will not necessarily work for every business out there. In our next and final installment of the series, we’ll provide “tips” for going tip-less.

 

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