From a European import that Americans once tried to ban, to a $2.13 federal wage frozen since 1991 — this is how the tipping system became what it is today.
American tourists returning from Europe bring the practice of tipping with them. At the time, it is widely considered an aristocratic affectation — a way of demonstrating wealth by paying people for services already covered by their wages. Many Americans find it distasteful and demeaning.
A significant anti-tipping movement emerges in the United States. The 'Anti-Tipping Society of America' gains thousands of members who pledge never to tip. Six states pass laws banning tipping entirely between 1909 and 1915, arguing it creates a servile class and undermines democratic values. All six laws are eventually repealed under pressure from the hotel and restaurant industries.
The FLSA establishes the first federal minimum wage at $0.25 per hour. Tipped workers are initially excluded from coverage entirely, reflecting the political power of the restaurant and hospitality industries in shaping labour law.
Amendments to the FLSA bring tipped workers under minimum wage protection for the first time — but at 50% of the standard minimum wage. The 'tip credit' is formally enshrined in law: employers can pay below minimum wage as long as tips make up the difference. The restaurant lobby has successfully institutionalised the transfer of wage responsibility to customers.
After a series of increases tied to the standard minimum wage, the tipped minimum reaches $2.01 per hour. The gap between the tipped and standard minimums is relatively narrow. This is as close to parity as the system will ever come.
The tipped minimum wage is raised from $2.09 to $2.13 per hour as part of the Omnibus Budget Reconciliation Act of 1990. This four-cent increase is the last one. For the next 34+ years, the federal tipped minimum wage will not move. The standard minimum wage will be raised seven times in the same period. The tipped minimum: zero times.
The Small Business Job Protection Act raises the standard minimum wage but formally decouples it from the tipped minimum, freezing the tipped minimum at $2.13 permanently — unless Congress acts separately. The National Restaurant Association, which has spent millions lobbying for this outcome, celebrates. Tipped workers have no equivalent political representation.
With federal action stalled, individual states begin raising their own tipped minimums. California eliminates the tip credit entirely in 1976 (though it takes decades for this to become a model), followed eventually by Oregon, Washington, Nevada, Minnesota, Montana, and Alaska. These states demonstrate that the restaurant industry survives and workers benefit when paid properly.
The Raise the Wage Act, which would have gradually raised the federal minimum wage to $15 and phased out the tipped subminimum, passes the House of Representatives but fails in the Senate. The tipped minimum remains at $2.13. It has now been frozen for 30 years.
Post-pandemic, tip prompts proliferate across every category of retail and service. Coffee shops, bakeries, fast food chains, airport kiosks, and self-checkout machines begin displaying tip prompts. The expected tip percentage at full-service restaurants climbs to 20–25%. Public frustration reaches a breaking point — surveys show majorities of Americans feel tipping has become excessive and coercive.
The 36th anniversary of the last tipped minimum wage increase. On this date, hundreds of thousands of Americans who have pledged to stop tipping will do so — sending an unmistakable signal to the restaurant industry that the era of employer-subsidised wages at customer expense is over. The movement demands that restaurants pay their staff a living wage, as every other developed country already requires.
The $2.13 wage has been frozen since April 1, 1991. On April 1, 2027, we change that.