Black-white earnings gap among restaurant servers: A replication, extension, and exploration of consumer racial discrimination in tipping

Abstract

There is a rich history of social science research centering on racial inequalities that continue to be observed across various markets (e.g., labor, housing, and credit markets) and social milieus. Existing research on racial discrimination in consumer markets is, however, relatively scarce and that which has been done has disproportionately focused on consumers as the victims of race-based mistreatment. As such, we know relatively little about how consumers contribute to inequalities in their roles as perpetrators of racial discrimination. In response, in this article, we elaborate on a line of research that is only in its infancy stages of development and yet is ripe with opportunities to advance the literature on consumer racial discrimination and racial earnings inequities among tip-dependent employees in the United States. Specifically, we analyze data derived from an exit survey of restaurant consumers (N = 394) in an attempt to replicate, extend, and further explore the recently documented effect of service providers' race on restaurant consumers' tipping decisions. Our results indicate that both white and black restaurant customers discriminate against black servers by tipping them less than their white co-workers. Importantly, we find no evidence that this black tip penalty is the result of inter-racial differences in service skills possessed by black and white servers. We conclude by delineating directions for future research in this neglected but salient area of study.