Why Eliminating Tipping in Restaurants is the Savvy Move We've Been Waiting For

Editors Note: Corey Mintz, the author of "The Next Supper: The End Of Restaurants As We Knew Them, And What Comes After" (Public Affairs, 2021), is an independent food journalist who specializes in examining the connections between business, politics, farming, ethics, land use, labor, education, and culture. He has also served as a consultant to restaurants, providing guidance on implementing non-tipping models. The opinions expressed in this commentary are solely his own. For additional perspectives, please visit CNN's opinion section.

Unfortunately, tipping is still not coming to an end.

Corey Mintz.

Chicago, like many other cities, implements a lower minimum wage of $9.48 per hour for restaurant staff and other employees who rely on tips, in contrast to the $15.80 minimum wage for other workers. Recently, the city council made the decision to gradually eliminate this "subminimum wage" within the next five years.

The Wall Street Journal referred to this as Chicago getting rid of the "tips-as-wage system," which may give the impression of a ban on tipping. Economist Steve Hanke and others perceive this as a disappointing development for customers, as they believe that the financial motivation provided by tips is the sole means to effectively manage and encourage service staff. However, Nick Kokonas, co-founder of restaurant software company Tock, shares a similar view but with a positive outlook.

"All of this information is misleading."

Although I had hoped that this ordinance would signal the end of tipping in Chicago, I have observed a similar situation in my hometown of Toronto, Ontario, where tipping continues to be prevalent in most restaurants. Therefore, I believe those who are predicting the elimination of tipping in Chicago are mistaken.

Based on my personal experience and extensive research, I anticipate that only a few restaurateurs in Chicago will opt for service fees instead of tips (which may result in negative reviews from individuals who believe the money is going directly to the owners). However, the majority of restaurants will likely retain the practice of tipping due to concerns that incorporating the true labor cost into menu prices could potentially discourage customers and prompt their top servers to seek employment elsewhere for higher earnings.

Indeed, if tips are considered a voluntary gesture of appreciation for good service, in addition to employees' livable wage, this law will not have any impact on that. Moreover, the restaurant industry relies heavily on the emotional connection between diners and establishments, with customers having become accustomed to this system over the past century, making it extremely difficult to change.

Unfortunately, tipping has always served as a scheme for restaurants to minimize labor expenses, ultimately leading to lower menu prices. This creates the illusion of an affordable dining experience, as customers are expected to compensate service staff rather than the employer.

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However, tips only serve as a substitute for a fair and sustainable income. If restaurants were required to provide a livable wage to their front-of-house employees instead of relying on customers to compensate them "voluntarily," it would lead to an increase in labor expenses and subsequently higher prices.

Leaving the determination of earnings in the hands of customers exposes business staff to unpredictable treatment and exploitation, which has always been an unjust method of employment. Tipping originated as a means of employing formerly enslaved individuals, particularly Black workers, without the obligation to provide them with a proper salary, or in some cases, any compensation at all.

Leading to racial discrimination in the economy and wage suppression for cooks, the current system is deemed horrendous and not accepted by most companies in North America. In contrast, it is suggested that restaurants should offer a living wage, adjust menu prices to accurately represent costs, and have meaningful conversations with customers to emphasize the importance of treating employees professionally, instead of relying on patrons' personal charity.

I recently attended a hospitality conference where I moderated a panel on tipping. During my discussions with owners and managers, it became evident that their top priority and difficulty is attracting, hiring, and retaining excellent staff.

In my exploration of innovative approaches in the hospitality industry, I have encountered operators who are challenging traditional norms in various ways. One effective strategy they have employed is to eliminate tipping, opting instead to provide higher wages and better benefits that non-tipping establishments typically offer. Additionally, they prioritize providing consistent work hours, investing in their employees' professional development, and, most importantly, fostering a work environment where cooks and servers are not adversarial due to income disparities.

These businesses have successfully devised strategies to attract and retain talented employees who are dedicated service professionals aspiring to develop their careers while being respected in their roles.

Unfortunately, some owners still cling to the notion that cooks work out of a passion for food, whereas servers are purely motivated by money. Despite the current severe shortage of labor, very few restaurants appear willing to reconsider their employment approach in order to tackle this issue.

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Join us on Twitter and Facebook. The issue I face when speaking openly with operators is that patrons have a limited comprehension of how tipping operates. I continue to encounter individuals who firmly believe that it is an abbreviation for "to insure prompt service."

There is a specific group of diners who derive pleasure from the control they possess through tipping, demean service staff, and anticipate flirtatious behavior from tipped employees. Although they are not the majority, if restaurants refuse to progress due to their focus on catering to these undesirable customers, they become more like captives in an abusive relationship rather than providers of remarkable dining experiences. I hope this serves as a significant wake-up call for the leaders in the hospitality industry in Chicago and other cities nationwide.