Sunday, February 16, 2014


In Chapter 8, Marx presents the concept of surplus-value as the key to capital’s increase: “This surplus-value is the difference between the value of the product and the value of the elements consumed in the formation of the product, in other words the means of production and the labour-power” (317). He then establishes corresponding terms in constant capital (means of production) and variable capital (labour-power). I am convinced—at least for the time being—of the calculations explicating the constancy of constant capital (including depreciation). This, of course, leaves the variability of variable capital as the only possible source of increase. Marx has previously explained that “in its pure form, the exchange of commodities is an exchange of equivalents, and this it is not a method of increasing value” (261). I think it is worth noting how heavily Marx deploys polemics to support this argument whereas he uses formulations in his discussion of variable capital. But I think that the “in its pure form” caveat does the necessary heavy lifting to make this argument work.

I am interested in the continuing legacy the exploitation (or theft) of labour-power from the worker. I was listening to a conversation about the new minimum wage hike proposals; someone on the neo-liberal left was debating someone on the neo-liberal right when the topic of the minimum wage for tipped employees came up.  I had forgotten, since I left the hospitality industry a decade ago, one of the things I learned that shocked me the most. As many are aware, tipped employees don’t receive paychecks, or rather, they receive checks for zero dollars.

Tipped employees make $2.13. As long as employee tips make up the difference to $7.25, the employer does not need to pay them more. This difference is calculated at a fixed percentage of sales (something like 8%). As tips are taxable, the employer also withholds taxes also in accordance with that same percentage of sales. So, provided that overtime is not a factor (and overtime is really not much of a factor), then the employer is responsible for some (relatively fixed) percentage of sales for withholding for tax purposes. Beyond the payroll tax duties, it cannot exceed the payroll amount calculated at $2.13 per hour (Checks can be zero, but they can’t be negative). Tipped employees do have some rights in declaring actual gratuity, but in my experience this is typically not done. My first question was whether or not this represented some shift in labour-power from variable to constant capital since the percentage of withholding is based on a fixed percentage of sales plus the minimum per hour wage; the equation based on number of hours and percentage of sales is at least predictable. But then I considered the role of the server’s labor in the commodity—the other side of Marx’ argument. If it is agreed that the value of the commodity of a plate of food is increased or decreased by the quality of service, then the capitalist (the employer) provides a relatively fixed wage (though not necessarily received by the employee), while the value of the commodity increases in a manner that is potentially limitless. The hope of a gratuity isn’t a wage even if it spurs and improved commodity: better service, servers performing side-work, etc. The gratuity isn’t a factor in the purchase price of either the means of production or the labour-power. True, taxes are withheld on all wage workers. However, to withhold taxes on tipped employees is to withhold taxes on an imagined wage not provided by the employer.

(Note: I haven’t been associated with this stuff in a while, but I did do some poking around online. I may have a detail or two slightly off, but I do think the big picture is right. These practices do also vary from place to pace and state to state. I just know a lot of people that never got a paycheck even if they were raking in the cash.)


  1. Interesting observations, especially regarding the value of a plate of food being increased or decreased by the quality of service. And that is how it is generally considered.
    Something different occurred to me while reading this. What if, instead of thinking of the service being part of the value of a plate of food, we consider that the value of a plate of food is constant, and the wages of the server cover the "suit up, show up, and do side work" part. Perhaps then, the argument could be made that the responsibility for paying for the labor of the service is actually shifted to the customer. That they bill they receive for their meal only covers the price of the food and the labor that produces the meal. They pay for the labor that gets the meal from the kitchen to the table separately, or gratuitously. Of course, in most cases (except when a gratuity is added to the bill for large parties or banquets), paying for that labor is optional. For the purposes of taxation, that "optional" wage is assumed by the government for the purposes of taxation.
    As a former server, I know that this isn't how many restaurant customers understand leaving tips. Even the best of service doesn't guarantee the server a tip. It could be argued that the server's labor is potentially provided free of charge, that by serving a plate of food they are gambling on whether or not they will be paid for that labor.

  2. I have been thinking about this for a bit, and it is an interesting example of some of Marx's equations. While the tip is an "optional" wage, across shifts it averages out to some semi constant value (which in Marx' s sense would be the social value of the labor).

    Why I find this question of gratuity interesting though is that while the gratuity could be considered part of the exchange value the by the consumer of the meal, this element is never part of the value experienced by the restaurant owners. This lowers the variable capital of the entire process, rendering the surplus value (and thus exploitation of the worker) a higher proportion of the total added value to the food. This left me with two implications:
    1) the tip economy only really benefits the capitalist, as it increases the surplus value of their commodities.
    2) the rhetoric used to justify tips, quality of service, customer satisfaction, ect, is a prime example of the ways that the interests of capitalism are often hidden under other value orientations.

  3. I am curious what the actual history of gratuity laws is. It seems to me that gratuity might be an example of a residual economic form that has since been brought into line with capitalism. After all, tipping does resemble a very basic sort of exchange between an owner of money and an owner of labor power (such as Marx describes in Chapter 6): the server sells their labor power to the customer for the duration of the meal. We can imagine a situation of basic exchange like this in which a restaurant employs no servers and everyone is on their own to either pick up their food themselves or pay someone else to do it. (In the spirit of Marx, this is of course very simplified). Once the servers are paid a wage by the restaurant owner, however, the nature of this exchange changes-- the server's labor power has been purchased by the capitalist already, so any tip left by the customer is really a double purchase of the server's labor power. By harkening back to a basic exchange relation, this sort of tip indicates a sort of idealized equality between the customer and the server, as though their exchange were mutually agreed upon. If a customer receives the sort of service that they feel they deserve, they consider the server an equal partner in the exchange and leave a tip. However, it is obvious that this sort of arrangement can't last long before capital sees a way to increase surplus value, as Jonathan mentioned above. If enough servers are often enough paid doubly for their labor, the capitalist can make the case that s/he should only pay for part of the value of the labor power if the customer habitually pays for part of it as well. Relative surplus value increases because the value of labor power that the capitalist purchases goes down and it is no longer the capitalist's responsibility whether the remainder of the value is purchased or taken freely (this of course assumes that the minimum wage is the standard measure of the value of labor power).

    This doesn't necessarily answer Robert's original question, but I think it is interesting to think about this unique form as one that has been enclosed by capitalism and aligned with capitalism to its own advantage.

  4. Here's a thought: since our stipends, as Graduate Instructors, are essentially $2.15/hr, compared to tenured professors working the same job, then shouldn't we be allowed to pass around a tip jar at the end of each class we teach?


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