15 February 2012

Just the Tips

Anyone who has ever worked in the restaurant industry can tell you that it can be incredibly unpleasant for everyone involved, but a new study has found that, in fact, it's an especially terrible place for women to work. To begin with, they make less money. Women servers who work full-time earn 68 percent of the salary their male counterparts make—and black women servers make only 60 percent. This disparity is explained largely by the fact that the highest-earning positions in the industry are dominated by men. For instance, only 19 percent of chefs are women.
Women tend to have the lower paying jobs, like server and host, in lower-cost restaurants. Sixty-eight percent of tipped workers are women, and tipped workers can be paid a lower minimum wage of just $2.13 an hour, as long as they make up the difference between that and the actual minimum wage of $7.25 an hour in tips (though many restaurants don't worry about whether their employees actually close the gap). According to the study, "[T]he lower minimum wage for tipped workers is essentially creating legalized gender inequity in the restaurant industry."

First off, as Chuck has already noted, servers in general tend to underreport their tips for tax purposes.  Relying on this metric is problematic because the metric is known to be inaccurate, but it is not known to what degree this inaccuracy reaches.  As such, women will more likely appear to earn less than men because they are in a better position to hide a good portion of their income.

Second, industries with a low minimum wage offer a better view of workers’ actual market value.  This means that when people actually have to earn their money instead of relying on government fiat, we will actually know how much someone is worth.  Now, if women are earning less than men in the restaurant industry, and if women are considerably more likely to actually have to earn their money directly (through the tip mechanism), then one should at least consider the idea that women workers in the restaurant industry aren’t actually that good at their jobs.

This then brings us to the crux of the matter:  the assumption of equality.  Maybe, just maybe, women don’t earn pay equal to men because they don’t provide value equal to men.  And if they aren’t providing equal value, then it should be expected that they earn less.  Thus, there are at least two distinct reasons for why women earn less than men:  discrimination and lack of equal ability.  The evidence is not clear enough to defend either position with certainty.  As such, any definitive assertion of either position reveals more about the biases of the one make the assertion than of the study itself.

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