Most Americans feel like they’re being asked to tip now more than ever, studies show. Everywhere they go, from salons to dispensaries to coffee shops, customers are greeted with digital point-of-sale systems (often accompanied by the now-common phrase, “It’s just going to ask you a question…”) that prompt tips ranging up to 30%. There’s even a phrase for the phenomenon: “Tipflation.”
According to credit card processor Square, and as reported by CBS, nearly 75% of remote transactions in food and beverage now ask for a tip, including online orders and at self-service kiosks. At the same time, there’s also a wave of restaurants nationwide slowly shifting away from tipping, opting instead to raise menu prices to support higher hourly employee wages.
Due to its prevalence in our everyday lives, it wasn’t surprising that tipping showed up on the ballot during this election, both literally — with a Massachusetts proposal to eliminate the tip wage that could serve as a model for other states — and more figuratively, as both Donald Trump and Kamala Harris signaled in their campaigns that they might support eliminating taxes on tips.
Both these suggested shifts to tipping culture are incredibly controversial, and the way voters responded to them also reveals just how complex and divided public opinion on the practice is — among both workers and customers.
A short history of tipping
Tipping in the United States has roots in the post-Civil War era, when wealthy Americans traveling to Europe returned with the habit of giving gratuities to workers in service positions. The practice was initially met with resistance because of its feudal undertones, but eventually it gained traction by the late 19th century, particularly in the hospitality and restaurant industries. However, tipping practices also sparked debates about fairness and inequality as employers increasingly relied on tips to supplement low wages, leaving workers dependent on unpredictable gratuities.
Then in 1938, the first federal minimum wage law was established in American history as part of the New Deal, though restaurant workers weren’t included in the reform.
“They excluded them from the minimum wage,” journalist Nina Martyris, who has covered the history of tipping, told NPR in 2021. “And that kind of codified the fact that you're paying your workers only through tips. And then tips became legal. The law had taken them into account in 1938 by excluding restaurant workers. That's sort of the nail in the coffin for ever getting a fair wage.”
Over the years, tipping practices have evolved alongside changes in labor laws and consumer expectations, but questions about its fairness and the role of employers in compensating workers remain central to the ongoing conversation. “You've created a two-tier system among your workforce,” Martyris continued. “And I think that was the beginning of the rot, which we are paying a price for till today.”
Massachusetts: Eliminating the tip wage?
In Massachusetts, voters overwhelmingly rejected a ballot measure to raise minimum pay for tipped workers.
Currently, tipped employees like bartenders and servers make $6.75 an hour in the state, as long as their total earnings with tips reach $15 an hour, with employers covering the gap if needed. This proposed legislation would have increased the hourly wage for tipped workers over a five-year period, until it reached $15 an hour by 2029.
According to CBS News, Massachusetts Governor Maura Healey — who once worked as a server — voted "no" on the ballot measure, saying it was "a well-intentioned effort brought by out-of-state interests." Healy was likely referring to the fact that the organization One Fair Wage, which is based out of New York City but has a chapter in Massachusetts, pushed to get the measure on this year's ballot.
Numerous members of the hospitality industry came out against the measure, as did the National Restaurant Association. One main concern was that raising the minimum wage would cause expenses to skyrocket, leading to either a necessary reduction in quality or staff, while another is that many patrons would stop tipping altogether if the wage went into effect. However, Mitch Gayns, a former Massachusetts bartender who now works with One Fair Wage, told Boston.com prior to the election that the measure was meant to protect service workers.
“The beauty of working in this industry is that your income is variable, so it allows you to think you have an opportunity to not be poor if you work hard enough,” Gayns said. “Your management has been telling you a lie that if you work hard enough, you’ll make more money, even though you don’t control the cost of food, the marketing, your hours. This idea that you have total control over how much money you make is a myth sold to us by ownership.”
Regardless, 64% of Massachusetts voters rejected the proposed wage increase. Currently, only seven states have eliminated the subminimum wage for tipped employees: Alaska, California, Minnesota, Montana, Nevada, Oregon and Washington.
The day after the election, Michelle Korsmo, President and CEO of the National Restaurant Association, released a statement regarding the decision.
“As individuals across the country were awaiting results of the headline races last night, we were focused on what voters had to say about issues like inflation, the price of goods – including restaurant meals – and preserving tips for employees,” Korsmo said. “The message in the election was clear that voters shared those concerns.”
Korsmo continued: “In Massachusetts, voters overwhelmingly supported tipped employees and restaurant owners by rejecting a misguided proposal to eliminate the tip credit. The decisive vote in Massachusetts continues an unbroken streak for tipped employees and restaurant operators who have fought for their tipped wage."
Trump and Harris: Eliminating taxes on tips?
In a rare moment of bipartisan alignment, Vice President Kamala Harris and President-elect Donald Trump both voiced interest during their campaigns in supporting proposals to eliminate taxes on tips, a controversial policy largely aimed at benefiting America’s service workers.
Advocates for the tax exemption have said it could provide significant relief to tipped employees, whose income can be unpredictable, though the proposal has sparked a heated debate among economists, labor advocates and policymakers.
Critics warn that removing taxes on tips could inadvertently reduce transparency and make it harder to track fair wage practices, potentially leading to an increase in wage theft — a problem that already disproportionately affects tipped workers. Additionally, opponents question whether the policy would create revenue shortfalls for state and federal budgets, potentially triggering a wider tax burden on other groups.
Both Harris and Trump’s interest in this policy change was largely symbolic during this election as both campaigns had other, larger legislative priorities. However, the fact that it was brought up at all highlights the evolving conversation around the precarity of the gig and service economy — and potentially signals a shift to tipping culture in the years to come.
