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Shake Shack founder: Tipping is 'one of the biggest hoaxes pulled on an entire culture'

Shake Shack founder Danny Meyer visits the trading floor after opening bell ceremonies at the New York Stock Exchange, Thursday, Jan. 14, 2016. (AP Photo/Richard Drew)

Danny Meyer, the founder of burger chain Shake Shack and an outspoken critic of tipping, recently called the practice “one of the biggest hoaxes pulled on an entire culture.”

Meyer appeared on The Sporkful podcast and explained that tipping emerged as a way to skirt the abolition of slavery after the Civil War.

“Tipping is actually one of the biggest hoaxes pulled on an entire culture, the American culture,” Meyer said. “The restaurant industry, as well as the Pullman train car industry, successfully petitioned the United States government to make a dispensation for our industries that we would not pay our servers. But it wasn’t considered slavery because we would ask our customers to pay tips.

“Therefore, no one could say they were being enslaved,” Meyer added. “And no surprise, most of the people who were working in service professional jobs and restaurants and Pullman train cars were African American.”

As wages for tipped employees have increased — Meyer estimates servers’ wages have increased 300 percent during his 31-year career — the racial dynamic has largely flipped on its head. Sporkful host Dan Pashman pointed out that front-of-house employees tend to be overwhelmingly white, while non-tipped employees, whose wages have largely stagnated, are more likely to be minorities.

Employees carry delivery bags full of food out of a Shake Shack store in New York January 30, 2015. REUTERS/Lucas Jackson

Studies have also found that minorities who work in tip-eligible positions often receive worse tips than their white counterparts.

Meyer, who also founded high-end New York City restaurants like Union Square Cafe and Gramercy Tavern is doing his part to change that dynamic.

He announced in October 2015 that he would begin eliminating tipping at all of his restaurants, opting to increase prices by 30 to 35 percent. He said the move would allow him to “compensate all of our employees equitably, competitively, and professionally.”

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