Service workers saying 'I quit' are pushing up wages and shutting down the tradition of tipping your waiter

• More restaurants are forgoing tips and upping wages to attract workers, The New York Times reported.
• It's the latest iteration of the labor crunch felt across the economy as workers quit in droves.
• And tipped wages are going over the federal minimum of $7.25, something Democrats failed to pass.

Next time you go out to eat, you may pay a service charge instead of a tip. That's because there's a huge labor crunch in the service industry, and employers can't risk the chance their workers get stiffed.

According to a New York Times report by Jane Black, as service workers leave the restaurant industry in droves, and employers attempt to lure them back, some restaurants are doing away with tips altogether. It's yet another way the labor shortage is changing how much - and how - workers are paid as some either take advantage of a hot labor market to switch roles or quit because of burnout and compensation concerns.

One chef interviewed, Jason Hammel of Lula Cafe in Chicago, said that he raised his hourly wages to come in between $18 and $24 - which would be offset by a 20% service charge on all checks. At Hammel's restaurant, any tips that came in on top of that service charge would be split by employees. And, unlike many other anecdotes from restaurant managers and owners, Hammel hasn't had issues with hiring staff.

In the majority of states, service workers can be paid a "tipped wage" - essentially a lower minimum wage meant to take tips into account and bring workers up to the minimum wage through those tips. That rate is just $2.13 an hour, over $5 below the federal minimum wage of $7.25. Seven states are what some activists call "one fair wage" states, meaning that the minimum wage for tipped workers is the same as the minimum wage for all other workers.

A February analysis from the National Women's Law Center found that female tipped workers were more likely to be in poverty. In those one-fair-wage states, the poverty rate for Black tipped female workers was 34% lower than in states with the $2.13 wage. And a March report from the advocacy group One Fair Wage found that during the pandemic, tips were down for female tipped workers - but harassment was up.

Sen. Bernie Sanders of Vermont has been one advocate for ending the subminimum tipped wage. In a March press call for Equal Pay Day, Sanders said: "I know there's a lot of talk about equal pay for equal work. If that's the case, maybe we want to raise the tipped wage."

Sanders led the charge on the Raise the Wage Act, which would have brought the minimum wage to $15 by 2025 and phase out the subminimum tipped wage. While Democrats failed to advance the measure through President Joe Biden's first stimulus package, the labor shortage seems to be starting to tackle the restaurant industry's lower minimum wage.

A new analysis from One Fair Wage looked at how wages changed in restaurants across the country. The report came as workers quit in record-breaking droves for the fourth month in a row and employers found themselves hiking pay to try and lure in prospective employees. A recent survey by the job site Joblist found that 45% of the respondents leaving the industry were switching out for higher pay.

The One Fair Wage analysis, which spanned two weeks, found over 1,600 restaurants with wages at the full - not tipped - minimum wage, with tips on top of that. Those restaurants are in 41 states where. Earlier in the year, the "vast majority" of restaurants paid $5 or less.

Now, One Fair Wage found, the average wage is $13.50 - a rate just below the $14 minimum Democrats hoped to set by 2024.