There is research to suggest that the wait staff’s belief that African Americans will tip less has created a reluctance to wait on tables with African-American parties, and stirred racial tensions. (Photo illustration by Dr. Sybil Mitchell)

Prince George’s County, Md. is a prosperous suburban refuge where elegant homes, long lush lawns and expensive cars suggest these homeowners are living well.

African Americans account for 64 percent of the population here, making it America’s most affluent predominantly African-American county. The median family income in 2006 was estimated at $76,350, more than $18,000 higher than the national average.

Still – until the last few years – the families of Prince George’s County had to leave town to eat in a mid-priced sit-down restaurant.

For decades, well-to-do African Americans, including many in Memphis and Shelby County, have complained to the national restaurant chains that they had to travel further to get a meal.

The community’s beef, if you will? Their restaurant dollars were helping to develop largely white counties, not their own neighborhoods.

Was it racism?

Several restaurant executives have since confided off-the-record that something other than race was at the root of this problem: lower African-American tipping levels.

Wait staff earn the bulk of their income from customer tips, and not from salary. So managers contend that restaurants frequented often by African Americans would have higher staff turnover (due to lower tips) and thus, higher operating costs. Higher operating costs reduce profits.

Now that the Bureau of Labor Statistics lists the food service industry as a growth employer, with 993,000 jobs expected to be created from 2006-16, the question is: Will the African-American our community get its fair share of those jobs? The restaurant industry has much at stake as well as evidenced by the costly discrimination lawsuits filed by African American diners unhappy with their treatment.

On the surface, this story does seem to be about race. But it cuts to the core of a very pressing business issue:Should diverse customers change to fit into traditional business models? Or must companies modify and adapt the business model to address cultural beliefs and preferences?

At the very least, representatives from the African-American community and the restaurant industry need to have an open conversation, said Michael Lynn, an associate professor of marketing at Cornell’s School of Hotel Administration in Ithaca, N.Y.

Lynn’s research on tipping, which was conducted after protests and complaints emerged from Prince George’s County, has found that a number of studies have been conducted and each concluded that African-American diners tended to leave smaller tips than European Americans. African-American diners left tips averaging between 10.9 and 14.7 percent of the bill, while white diners left tips averaging between 16.6 percent and 19.4 percent.

The impact of the tipping divide is clearer when one considers the average salaries for wait staff.

According to the Bureau of Labor Statistics, the median hourly wage-and-salary earnings (including tips) of waiters and waitresses in May, 2006 was $7.14. The middle 50 percent earned between $6.42 and $9.14. The lowest 10 percent earned less than $5.78, and the highest 10 percent earned more than $12.46 an hour.

For most waiters and waitresses, higher earnings are primarily the result of receiving more in tips rather than higher hourly wages. If the tips are bad, servers may be unable to pay basic bills.

The effect of race and diversity relative to tipping is a sensitive topic that one researcher says “everyone is afraid of” and that it is time for a solution-oriented conversation. (Photo illustration by Dr. Sybil Mitchell.”

The Million Dollar Question

Lynn, whose research on the tipping divide generated some discussion in 2002, has interviewed all parties: restaurant chains, servers and customers. He said the wait staff’s belief that African Americans will tip less has created a reluctance to wait on tables with African-American parties, and stirred racial tensions.

But what came first? Did low tips result in poor service? Or does poor service result in lower tips?

Lynn’s research offers some insight. He found that African Americans are more likely than whites to leave a flat rate tip (say $5) rather than calculate the percentage of the check. Discriminatory treatment by servers may be an issue as well, although he notes in some surveys African Americans rated the service higher than whites and still left lower tips.

Philadelphia attorney Walter Palmer, founder and director of the Institute on American Racism and Social Justice at the University of Pennsylvania, believes cultural issues play a role. African Americans have lower wealth than white households, he notes, even in areas with high incomes.Secondly, many resent the fact the chains don’t pay their workers a livable wage. In other words, the business model conflicts with their community values.

“I have always had a problem with the restaurant using me to pay the salaries,” Palmer said. “The employees should not have to depend on tips. They should have strong basic salaries and benefits so they can feed their families.”

The lack of representational diversity in restaurant management and on the dining room floor at posh restaurants may be an issue as well, Lynn said. He theorizes more African Americans would tip better if they had friends and family in the business, and wanted to support them. In addition, some African-American managers also suggest that training might help servers find ways to connect with minority customers.

Liz Smith, a former manager of a California sit-down restaurant, suggests competency issues play a role.

Years ago, after a predominantly white wait staff told this African-American manager that African-American diners didn’t tip, she offered them a challenge. She joined the wait staff on the floor for the night, and had all the African-American customers sent to her. At night’s end, all tips were added up and she had collected the same amount of money as the white servers.

Smith wonders whether training and improved cultural skills on the part of servers could lead to larger tips. In fact, Lynn’s research indicated that tip percentages are only weakly related to customers’ ratings of service quality in restaurant settings. It has more to do with the customer-server connection.

Nonverbal server behaviors that communicate a liking for the customer, such as lightly touching the customer and crouching next to the table when interacting with the customer, substantially increase the tips restaurant servers receive, he said. Of course, if the wait staff harbors biases against certain customer groups, they are not likely to use these techniques.

Lynn said he once conducted an experiment by having servers test gestures and behaviors linked to higher tips with African-American customers. However, when servers under his watch squatted next to a table and used close eye contact – and he instructed them to, the tips decreased, rather than increased. It was not until later that he read that personal space is highly valued in the African-American community, and reasoned that the server’s actions might have sent up a red flag.

The answers to these questions, thus far, have eluded both the restaurant industry and the African-American community. Much is at stake for both sides, yet so far only the Multicultural Foodservice & Hospitality Alliance, which examines diversity issues, has been willing to take on the issue.

 “It is a very sensitive topic that everyone is afraid of,” said Lynn. “I believe that it (the leadership) is going to come from the black community.”

Linda S. Wallace is a Houston-based journalist who specializes in covering diversity, cultural competency and cultural inclusion.

Next week: Time is Running Out

What is the tipping gap costing us?

1. Jobs: Most food service jobs are entry-level and require very little experience. According to the Bureau of Labor Statistics. More than one-fifth of these workers are 16- to 19-years-old. Job openings are expected to be abundant through 2016, which will create excellent opportunities for jobseekers.

2. Economic Growth: The belief that African Americans are lower tippers is prompting some chains to bypass African-American neighborhoods for restaurant locations.

3. Poor Service: Lower tipping levels lead to unhappy servers, which can lead to biases that affect the way African-American customers are treated. It becomes a Catch 22: lower tipping rates results in less friendly service, which can lead to lower tips.

4. Higher prices: The costs of settlements from discrimination lawsuits ultimately are passed onto other customers.  Discriminatory treatment of customers leads to higher costs for meals.

What you can do to help.

1. If the service is good, leave a standard tip of between 15 and 20 percent. If you feel managers ought to be paying more, take your complaint directly to the management. Don’t penalize waiters and waitresses for their bosses’ decision.

2. Educate family and friends about tipping levels. Explain to them what is at stake for the African-American community.

3. When you encounter unfriendly wait staff, ask to speak to the manager right away. Be specific about your complaints. If you are uncomfortable doing so, then call the chain and voice your complaint. This allows the company to address problem behavior in a timely fashion.

4. If you frequent a restaurant that does not have people of color or women on the wait staff, raise the issue with the manager.  Explain the importance of having staff who understand the cultural likes and dislikes of diverse diners. Follow-up by sending a letter to the chain’s management.

5. Serve as a cultural ambassador for businesses in your neighborhood. Find ways to help them get involved in the community projects, and work with area youth. In exchange for higher tips, demand culturally competent policies and services.

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