Summary
Tipping in U.S. restaurants has dropped to 19.3%, the lowest in six years, driven by frustration over rising menu prices and increased prompts for tips in non-traditional settings.
Only 38% of consumers tipped 20% or more in 2024, down from 56% in 2021, reflecting tighter budgets.
Diners are cutting back on outings, spending less, and tipping less. Some restaurants are adding service fees, further reducing tips.
Worker advocacy groups are pushing to eliminate the tipped-wage system, while the restaurant industry warns these shifts hurt business and employees.
Key cities like D.C. and Chicago are phasing in higher minimum wages for tipped workers.
I also agree with you but i wanted to point out that if the worker getting paid $3/hr doesn’t make enough tips to cover the remaining $4.25/hr in tips then theoretically the business is legally supposed to make up that remaining hourly difference. -I’ve never seen that happen but a server making such a low amount in tips repeatedly is a server i’d expect to not remain working in that role.
You are mistaken. The US has two different federal minimum wages. Servers have a lower minimum wage. It’s like ~$3/hour.
I was a server in addition to an Office Assistant that adjusted payroll among other things in the hospitality industry here in the U.S.
-That additional amount is supposed to be made up for by the employer if the server doesn’t make enough in tips. If as a server you are not making at least 7.25/hr in wages or alternatively in combined pay and tips then you need to contact your local states Department of Labor because you’re likely having wages stolen.
https://www.dol.gov/agencies/whd/fact-sheets/15-tipped-employees-flsa
According to the DOL, an employer may not pay their employees less than $2.13 per hour even if they make enough tips that they’d still be making minimum wage just off of tips. So there is a separate, lower minimum wage for tipped workers.
At the same time though, tipped workers still have to make the full (federal) minimum wage. If your $2.13 per hour plus your tips only come out to $6 per hour, your employer has to pay the other $1.25 per hour.
Enforcement is another issue, of course, but tipped workers have the same minimum wage as everybody else. The tipped wage just allows businesses to count tips as wages up to a certain point. If a tipped worker is only being paid $3 per hour because they didn’t get enough tips, that business is stealing their labor and needs to be smacked.