The tradition of the aristocrats (high society people who held titles) paying the servants extra money is believed to have originated in medieval times (between the 5th century to the 15th century) in Europe and continued till the 19th century.
Wealthy Americans discovered this practice during their vacations in Europe in the 1850s and 1860s.
While these Americans were rich, they were not aristocrats; so, wanting to seem aristocratic and sophisticated, they began tipping people who provided service to them.
Many people found this custom classist as it divided people based on their social class.
So, there was an anti-tipping movement, which spread to Europe as well, and is believed to be one of the reasons why tipping is not a thing in Europe today.
But the movement couldn’t do much in America, which got busy with the civil war that broke out in 1861 and continued till 1865.
Even when slavery was abolished at the end of the war in 1865, those who had been freed from bondage didn’t have the means to support their families.
Most of them ended up in low-skilled jobs and worked as servants, porters, barbers, waiters & bartenders, etc.
For some of these jobs (especially in restaurants), the employers hired them on the condition that the staff would only be paid through the tips they got from the guests (and no wage).
At the same time, there was massive industrialization and many people moved from rural areas to urban areas (to work in factories) and had to rely on restaurant food.
So, more employees were required in the restaurant business, and therefore, there was an increase in the number of people, who worked for no wage and survived on tip-money.
After some back & forth, a few states passed laws to abolish tipping.Some say it was abolished because black workers began earning big from tips, and white workers, who saw tips as degrading felt bad.
The laws were withdrawn in 1926, possibly because of lobbying by restaurant owners, who saw tipping as an opportunity to subsidize workers’ pay with guests’ extra money.
In 1938, a law was passed that allowed employers to pay workers a wage that would add up to the federal minimum wage when combined with tips, and so, employers have been encouraging it so much that it has become a part of the culture.
Today, some states in the US allow the tip to add to the Federal Minimum Wage of $7.25/hour; so tipped employees may be paid as low as $2.00 an hour, and cover the remaining $5.25 from tips.
