Posted on June 30, 2021

Restaurants Are Now Adding ‘Equity’ Charges to Customers’ Checks to Fight Oppression

Jon Miltimore, Foundation for Economic Education, June 22, 2021

“Where should we eat tomorrow?” my wife asked me excitedly as we sat on our deck Friday evening.


“Broders’,” I answered without hesitation.

Located in southwest Minneapolis, Broders Pasta Bar is a local gem. It has a great outdoor patio and the best Italian cuisine in the Twin Cities. We had not eaten there since the pandemic began.

My wife nodded and started to make a reservation on her phone. Then her jaw dropped.

“You’re not going to like this,” she said.


She was right.

On its website, Broders’ has a notice to customers notifying them of a new 15 percent “benefits and equity” charge they’ve instituted. They justify the charge, first, by explaining that “many states have allowed reduced minimum wages for service staff in the form of a tip credit.” {snip}

The restaurant’s second justification is that many tippers are racist and sexist, according to uncited research.

“Studies have also shown that there is inequity and built-in bias in the way consumers give tips,” the statement reads. “In general, Black or Brown servers receive less tips than Caucasian servers. There is gender bias as well.”

The final part of the statement says the new policy stems from wider racial injustice and is not a substitute for gratuity.

“In the wake of racial injustice protests and the closures due to Covid, now is the time for Broders’ to reimagine its economics and provide fair pay across the company,” the statement reads. “Our Benefits & Equity Charge is applied entirely to employee compensation. This supplement helps us to set a $16 minimum hourly wage for customer facing employees, $18 minimum hourly wage for kitchen employees… Altogether this allows everyone in our company to earn a real living wage. The 15% Benefits & Equity Charge is not a gratuity.”


First, it’s true that many states allow tipped employees to make less than the minimum wage. However, Minnesota is not one of those states. {snip}


Second, I’m no Robert Irvine, but telling your customers you are going to begin charging them more because they are too bigoted to tip fairly might not be a winning restaurant strategy. Just sayin’. As a former restaurant worker, I pride myself on being a generous and fair tipper, and the implication that I can’t be trusted with this responsibility doesn’t sit well with me.

Finally, if Broders’ doesn’t feel restaurant workers in the back are earning enough money, there is a solution to that: pay them more. This action doesn’t require any surcharges or public lectures on systemic oppression. {snip}


Out of curiosity, I looked around to see if other restaurants are adding similar charges. I quickly found one. Pizzeria Toro, a North Carolina restaurant, recently announced that it is introducing a 20 percent Living Wage Fee.

The pizzeria’s owner, Gray Brooks, said this is the “equitable” thing to do. “In order for the bottom to rise up, the top has to come down a little bit,” said Brooks.


Focusing on equity tends to place labor and business at odds, implying that workers are being exploited and deprived of their fair share. This idea—that the employer-employee relationship is inherently exploitative—is grounded in Marxism, and has been effectively refuted by economists. This mindset taps into resentment and class struggle, two pillars of socialism, and teaches people to see the world through the lens of oppression and conflict.

To be sure, in a new twist, restaurants appear to be trying to pass this alleged exploitation onto customers, perhaps to placate disgruntled workers or maybe to tap into social justice currents. But this doesn’t make the ideas less harmful.