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)

African-American waiters and waitresses may do the same job as their white co-workers yet take home a lot less cash.

Research suggests that the restaurant chains aren’t the bad guy in this. Instead, customer biases – by blacks and whites – may result in lower tips for African Americans. Since tips account for a sizeable portion of a service worker’s pay, this is a case where little differences can add up to sizeable income gaps.

Two recent consumer research studies indicate that African Americans holding service-sector jobs may earn less, if they rely on tips. The studies, examining tips paid to African American taxi drivers and waiters and waitresses, found that they received less than their white colleagues.

Moreover, the data suggests that African-American and European-American diners gave African-American servers less money even when the service was rated good or great. Michael Lynn, one of the nation’s best known experts on tipping, says this finding raises serious legal questions. The practice of tipping, which theoretically rewards quality service, may actually violate civil rights laws by creating an adverse economic impact for African-American workers, he suggests.

The study titled “Consumer Racial Discrimination in Tipping: A Replication and Extension” will be published this spring in the Journal of Applied Social Psychology. The authors are Lynn and Michael Sturman of Cornell University and Christie Ganley, Elizabeth Adams, Mathew Douglas and Jessica McNeal of Mississippi College.

Their study, which is admittedly small in scope, may nonetheless serve as a wake-up call for the hospitality industry, which has been reluctant to work through the threads of bias, race and culture, fearing that to do so would trigger stereotyping of the African-American community or allegations of racism.

Address these issues now, or face the prospect of added legal costs later, the study’s authors’ caution.

“On a practical level, our finding of a statistically reliable main effect of server race on tipping calls into question the legality of tipping in the United States,” the restaurant tipping report concludes. “Specifically, the results suggest that the use of tips as a means of compensating workers may violate the Civil Rights Act of 1964, which prohibits employment discrimination on the basis of race, color, religion, sex, or national origin.”

 Lynn says the findings are consistent with those found by Ian Ayres of Yale Law School, who, along with two other academic researchers, examined tipping for white and black taxicab drivers.

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.”

“Many studies have documented seller discrimination against consumers, but this study tests and finds that consumers discriminate based on the seller’s race,” Ayres’ abstract says. “African American passengers also participated in the racial discrimination. While African American passengers generally tipped less, they also tipped black drivers approximately one-third less than they tipped white drivers.”

The same “race effect” was present in Lynn’s survey. Unlike in Ayres’ study, Lynn and his colleagues were able to survey respondents to get feedback on service and food quality to gauge the performance of African-American and European-American servers.

“For white servers, tips increased from 16.8 percent of the bill size when service was rated less than perfect to 23.4 percent of the bill size when service was given a perfect rating. However, for African-American servers, tips were 16.6 percent of the bill size for both perfect and less than perfect service ratings. Thus, contrary to our hypothesis, the server race effect was stronger at higher levels of perceived service quality than at moderate levels of perceived service quality,” the survey concludes.

Lynn says Ayres and his colleagues attributed their findings to conscious and unconscious motivations or prejudices on the part of consumers and acknowledged that their explanatory conclusions were weak and pushed the limits of their data.

Basically, they suggest that the consumer may not be aware of these subtle biases.  Lynn points to the findings of the Implicit Association Test, a well-known bias barometer that has found that many whites and African Americans have an implicit (automatic or unconscious) preference for whites over African Americans.

The sampling size of the restaurant tipping study (140 surveys were used) and taxicab research (1,000 rides) needs to be expanded, and additional research conducted to clarify the picture, Lynn says. However, these data serve as a red flag for executives in an industry that has had to pay out more than $150 million to settle charges of racial and gender discrimination over the past 20 years.

The restaurant industry employs nearly 13.1 million people, which makes it the largest employer outside of government, according to the National Restaurant Association. As baby boomers retire, new workers will come from ethnic populations. Any pay disparity with minority workers could ultimately increase operational costs by resulting in higher turnover and boosting recruitment costs.

What’s the solution? For the taxi industry, Ayres and his colleagues suggest adding the tip directly to the fare. They suggest this practice might eliminate two types of discrimination: bias against African-American taxi drivers, and the reluctance of taxi drivers to pick up African-American patrons who tip less.

In the restaurant industry, Lynn says, an option is to have waiters and waitresses pool their tips at the end of the evening and then distribute them. That way, the tipping disparity would be shared.

Gerry Fernandez, founder and president of the Providence, R.I.-based Multicultural Foodservice and Hospitality Alliance, which promotes diversity in the industry, said there has been a lot of talk about the tipping differential and cultural issues, but little concrete action.

Ultimately, the market demographics will force change, he said. The savvy chains that develop cultural competency and get ahead of the learning curve will have an advantage over their competition, he believes.

“I think we are approaching the time when the pain of staying the same will exceed the pain of change. This is going to happen because the baby boomers are starting to retire. Then it’s hard to find new employees.  If you don’t already have equity with black and Hispanic workers, you are going to have problems.   The market eventually will force this change.”

Lynn agrees. He said more research is needed to study consumer behavior and guide the development of culturally appropriate business models.

“The black population is growing and the Hispanic and Asian populations are growing as a percentage of the population. All issues surrounding race are going to become more critical as time goes on,” he says.

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