Trump Is Coming For Your Tips: A Restaurant Worker's Perspective
Once again, Trump has announced a decision that will benefit the people at the top of an industry, while simultaneously suplexing the workers further into poverty. This has become an M.O. that's failing to even bother with the thin veil anymore.
Generally policy decisions that funnel money to the top are done through tax cuts and loopholes, but Trump's approach when it comes to the restaurant industry is a bit more direct, and involves a tip sharing policy that every large food service chain in America is likely elated by.
Whenever I write about the oil industry or billionaires, I have to rely on a detached understanding of those things. I'm sorry to say that I have no experience as an heir to a massive fortune. Restaurants, however, have been my space for well over a decade. Like most smart-assed weirdos whose spirits would die at a nine to five, I've worked just about every position in the industry for corporate and local establishments alike. I'm currently managing a San Antonio institution that's locally owned and has between a 60 and 70 person staff, since snarky political commentary and dick jokes don't pay the bills. This is my area.
The Obama-era rule that Trump is attempting to decimate here is that no employee who doesn't have direct interaction with guests is allowed to be in a tip pool. Trump's proposal is that anyone making the federal minimum wage of $7.25 an hour is subject to pool those tips. To the uninitiated this may sound like a good thing for the cooks and dishwashers (known as back of house employees), but the truth is that they will more than likely suffer a cut in pay as well.
For the last several years, the minimum wage for tipped employees has been $2.13 an hour, and many places are all too happy to pay that miserable sum. If the average tip plus hourly doesn't reach $7.25 an hour, than the establishment is legally required to supplement the difference. Since this new rule only affects people making at least $7.25, it would appear to mean a raise for the servers if a restaurant chose to enforce it, but that would be incorrect. Most restaurants have more back of house employees on during a shift than they do tipped ones, spreading those tips even thinner.
In addition, a line cook who's at $12 an hour in fixed hourly, could be dropped down to the $7.25 mark in order to be put in the pool. These workers are also clocked in before and after all of the servers in every restaurant I've ever worked in, meaning that the tipped hourly average will continue to decrease after the last tab is paid, and the kitchen staff and dishwashers continue to close.
So, say you have six cooks, four servers, two bussers, two bartenders, and one dishwasher working a ten hour shift. During that shift, they're splitting a $400 tip pool. To get the hourly from the tips, you would add up the total hours worked, and then divide the tip amount by that. In this scenario, you're dividing $400 by 150 hours. That's $2.66 an hour. This means that the cook who was making $12 an hour is now making $9.91, along with everyone else. This is why so many service workers are opposed to this measure. Now let me tell you why many owners and boards are in favor of it.
Using the above metric, employers paying $4.00 an hour would only be paying the front of house employees $320 for all eight employees for the whole night! Let's say some of the back of house people are at $14 and some at $12 (pretty standard for corporate restaurants), and assume a median of $13 an hour. The employer is out $910 on these guys, making their total labor for the shift $1,230. If everyone was at $7.25, then payroll would be all in at $1,087.50. That may not seem like much of a savings for the company, but it makes a huge difference in labor percentages over the year. It would also mean that management's overall labor wouldn't change much when it was slow, so they could keep people on for longer, further depleting the pool, which will already be minuscule if it's slow.
The sad fact is that this kind of structure offers a lot of opportunities for restaurants to bleed their workers. This doesn't mean that everyone in a leadership position at a restaurant will take advantage of this system, but many places will. For example, the place that I'm managing now is owned by an amazing lady who truly loves her staff and community, and I'm not just saying that to kiss ass before my evaluation. I was tasked with a three month project to figure out how to pay everyone more off of our payroll figures, and we pulled it off. Sadly, this is far from the norm in this business. Many owners use the latitude that tips give them in order to continue to pay workers $2.13 an hour in service of their bottom line, never caring whether or not the employees that they'll never meet can pay their bills. If they can scale their hourly down by making the tips rain over the whole restaurant, then they couldn't care less if you're busting your ass for less than $10 an hour. Their shareholders are going to be able to treat their secretaries to something nice in hopes of nabbing an office squeezer, and isn't that what really matters? Living off of tips is capricious enough, and stretching that money to its breaking point for the good of corporate gains won't help, especially with the laughable state of our current minimum wage.