(Phillip W. Magness, American Institute for Economic Research) Is the common act of tipping your waiter at a restaurant really a successor to slavery’s harmful legacy? Does tipping your bartender or Uber driver mean you are perpetuating the structural racism of the 19th century? These are the implications of the latest claim by Nikole Hannah-Jones, creator of the New York Times’s 1619 Project.
In a characteristic tweet-thread, Hannah-Jones declares that “[t]ipping is a legacy of slavery and if it’s not optional then it shouldn’t be a tip but simply included in the bill. Have you ever stopped to think why we tip, like why tipping is a practice in the US and almost nowhere else?”
It’s not the first time that the 1619 Project has made bizarre claims that try to connect mundane aspects of everyday life to slavery. When investigating Hannah-Jones’s theory of tipping however, I soon discovered that claims linking the practice to slavery have recently become a trendy talking point of the economic far-left.
In 2020, a self-appointed “fact checker” for USA Today wrote an article rating the tipping/slavery connection as “true.” Other far-left organizations such as the Ford Foundation have promoted similar claims in recent years.
Several of these works share a common source: they justify their narrative about slavery’s relationship to tipping by invoking the authority of Saru Jayaraman – an anti-tipping activist who leads a minimum wage hike advocacy organization. While Jayaraman’s position should not be dismissed out of hand, it is far from a dispassionate scholarly analysis of the practice and its history. A quick glance at her 2016 book Forked – allegedly the academic version of this thesis – suggests that it is embarrassingly light on evidence.
The book devotes fewer than 5 pages to the supposed slavery connection, very little of which relies on original sources or novel discoveries. It’s a flimsy book on which to stake such a bold thesis.
As we shall see, the tipping/slavery thesis has holes that emerge vis a vis the historical record. But first, let’s consider its basic claim. The anti-tipping movement’s story asserts that American restaurant owners turned to a tipping-based compensation model in the decades after the Civil War as a way to underpay African-American workers in the service industry. They connect this narrative to a modern-day call for raising the minimum wage, and expanding its scope to replace tips as the main income stream for service industry workers.
Like much of the 1619 Project, this particular claim attempts to enlist the injustices of the past as an activist tool to enact progressive economic policies in the present, which they then rebrand as a necessary corrective to the horrors of slavery.
There’s a problem with this history, as well as the broader talking point about tipping that media “fact checkers” have taken to repeating and disseminating in recent years. They fundamentally distort the history of tipping, which long predates the American Civil War and the end of slavery.
Like many topics in early economic history, there’s no clear record of when the first tip was given to a worker in thanks for a service. The practice was, however, widespread by at least the late Middle Ages in Europe. Also known as a gratuity, the practice takes its more formal name from the medieval French term gratuité – meaning a small amount of money that’s freely or voluntarily given to a person. Gratuities were apparently very common in that era – so common that they made their way into William Shakespeare’s plays. An example appears in Twelfth Night, first performed in 1602.
In the relevant scene, Shakespeare’s comedic knight Sir Andrew addresses a court jester, asking “I sent thee sixpence for thy leman; hadst it?” The performer responds “I did impeticos thy gratillity,” after which Sir Andrew requests a song. A “gratillity” is an obsolete English variation on the word gratuity.
In Tipping: An American Social History of Gratuities, one of the most comprehensive historical surveys of the practice, author Kerry Segrave noted that the origins of tipping were vague, “but it may have begun in the late Middle Ages” and in “Tudor England (1485-1603), a shift had taken place in that visitors to private homes were expected to give sums of money (known as vails) at the end of a visit for service rendered by the host’s servants above and beyond the usual duties.”.
With the passage of time, the act of giving a gratuity expanded beyond the nobleman’s court entertainers and into routine exchanges. Tips fulfilled a clear economic function. They allowed the purchaser of a service to convey satisfaction with the provider for the task being performed and contracted. An attentive waiter or bartender might expect a bonus in the form of a large tip, signifying customer satisfaction. Poor service, by contrast, might result in a low tip or no tip at all.
Characteristically, the practice of tipping was not imposed by any central plan or committee. It likely evolved and spread over time, fulfilling an information problem around transactions. Simply put, it allowed a feedback loop between the service provider and the customer.
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It is not surprising that the typical rate of gratuities has increased over the years from roughly 10 percent in the 1950s to 20 percent today, benefiting those in the tipped service industry. Moreover, given that tipping represents a percentage of the overall bill, it tends to be a more inflation-resistant means of compensation compared to politically-determined minimum wage increases or the (potential) desire of employers to resist wage hikes.
These are important economic considerations, as they illustrate how the abandonment of a tipping economy could in fact harm the least well-off – both by undermining the beneficial signaling mechanism of the earned tip and through the potential disemployment effects of the proposed alternative of a minimum wage-only system.
Now the critics of tipping have taken to augmenting their case with an error-riddled and distorted history of the practice – one that attempts to link it to slavery through a false narrative.
