Cruise Ship Blues: The Underside of the Cruise Ship Industry (25 page)

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TAXING TIPS

Although it is difficult to know for certain, it appears that centralization of tips is a means to deal with the onboard mafia — the system of taxing tips and of workers feeling pressured to pay off whoever has the ability to affect their job. Headwaiters and maitre d’s now presumably receive an amount from the company based on total tips received. Waiters, busboys, and room stewards also receive their tips from the company. It is unclear how the tips collected are distributed and whether workers actually receive the full amount that the cruise line recommends passengers pay. While covert abuses may be reduced, the company may now simply have institutionalized the system of payoffs.

In the end, many workers likely earn less now than they did under the old system where tips were paid directly to them for the services they provided.

THE ART OF WORKING FOR TIPS

Some cruise lines do still encourage the payment of gratuities directly to workers. A job in the hotel department, as a waiter, busboy, or room steward, on these cruise lines means that your income depends largely on generating tips.

A certain attitude must be maintained: a worker must assume the role of a humble servant, yet at the same time also be comfortable talking about his or her home and family. The latter can be particularly stressful, given the fact that workers commonly miss their family and loved ones. Talking about them can be difficult, particularly when it may be as long as eight or nine months until they see them again (or since they saw them). Add to this the fact that workers serve as many as 40 new passengers every week, and a substantial number of those passengers converse about the same thing, week after week. The stress of these conversations must be kept in check because cordiality and responsiveness are important elements in the size of tips a worker receives.

Workers must also be tolerant of passengers who like to talk about themselves, their family, or their economic successes. Cruise passengers forget, or don’t care, that cruise ship workers are often from nonindustrialized countries

PREPAID GRATUITIES:
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A DOUBLE-EDGED SWORD

In the past, most frontline workers — waiters, stewards, and busboys — on cruise ships had greatest fear for their future from onboard managers, who could fire them without reason and also influence their income from salary and/or tips. With prepaid tips, they also live in constant fear that passengers could cause them to lose their jobs. On some cruise lines, some passengers pay tips in advance by credit card but then cancel the charges at the end of the cruise. There's not a thing an employee can do about this, and it means that he or she is subject to an automatic review by the company. In other words, employees may lose both their money and their job.

With the current practice of gratuities being applied to onboard accounts, there may be similar reviews and sanctions. While charging gratuities on onboard accounts is presented as being done for the convenience of passengers, there may be other goals being served. No matter, in the end it is the worker who is likely to suffer.
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where many of the things passengers take for granted are either unavailable or too expensive. Passengers tend to ignore the fact that the economic and social system in the worker’s homeland may be very different from their own.

The issue may be as fundamental as religion. On Holland America Line, for example, passengers traveling in December often wish workers a Merry Christmas. They assume that the workers celebrate the holiday; if the workers don’t, they are unlikely to correct the passenger. The fact is, on this particular cruise line, the majority of the Indonesian staff is Muslim. One year I conveyed good wishes to my waiter for his celebration of Ramadan. He was initially surprised that a passenger knew about the Muslim holy month. My statement of awareness of his culture and beliefs changed the manner in which he treated my partner and me through the remainder of the cruise. But at the same time, he continued to play the role for other passengers who assumed he was Christian. He even tolerated comments about how cute he was. Workers learn to keep many parts of themselves private and to discuss what they know from experience passengers want to hear. Much of who they really are remains hidden.

Through experience, workers learn and adopt tricks to ingratiate themselves to the people they serve. On many cruise lines, room stewards lay out passengers’ pajamas or towels in the shape of animals when they turn down the beds for the night. Many passengers like this. Often it is even expected — not infrequently, individuals post messages on Internet discussion groups expressing disappointment that their steward did not do this, or they didn’t do it as well as others had led them to expect.

Dining room waiters have learned to compliment passengers on their meal choices. Some passengers take these as positive statements about themselves as a person and view their waiter more positively. Waiters might bring an extra dessert or a dessert with a scoop of ice cream. They have learned that these gestures produce positive reactions and presumably result in larger tips.

ITF CAMPAIGNS AND CRUISE SHIP WORKERS

Closely allied with its efforts to raise pay standards on cruise ships is the International Transport Workers’ Federation (ITF) campaign against flags of convenience.
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In the past, when ships were owned and registered in the same country, they were crewed mostly by people from that country.

Workers could turn to their national trade unions, not only for the establishment and assurance of decent working conditions and wages, but also in the event of difficulties.

On international vessels using a flag of convenience, however, seafarers no longer have this ability.

Onboard regulation is arbitrarily set by company policy; the main goal is profit. Workers in the deck and engine department, with no opportunity for tips, live with low wages and less-than-optimal living conditions.

Sailing under a flag of convenience is common practice in the shipping industry generally, not just within the cruise industry. The practice presents problems for workers, but economic incentives for ship owners and operators.

What Is a Flag of Convenience?

A “flag of convenience” ship is one that flies the flag of a country other than the country of ownership. For example, the major cruise lines serving North America are headquartered in the United States and owned by American interests; the two largest conglomerates have their stocks trade on the New York Stock Exchange.

Although the beneficial ownership of these companies is in the United States, the flags flown on all of their vessels are those of other countries. The most common flags are of the Bahamas, Liberia, and Panama. In 1999 approximately 62 percent of cruise ships were registered in these countries, pretty much evenly divided between the three. Of this group, Panama is considered the most deficient flag state — in terms of safety and exploitation of seafarers — in the world.
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A number of ships left Liberian registry in 2001 following disclosure that fees collected were being used to fund the Revolutionary United Front in Sierra Leone and for armed militias in Liberia. Most of these ships transferred to either Panama or the Bahamas.

in recent years other ships have been registered in the united Kingdom, the Netherlands, France, and Italy. These countries do not provide flags of convenience, but have in almost all cases provided financial incentives for these registrations — in some cases, providing substantial shipbuilding subsidies in return for the registration. Although the ships registered in these countries may be owned elsewhere, the cruise line involved has an identity with the country of registration; for example, Cunard Line and the united Kingdom; Holland America Line and the Netherlands; Costa Cruises and Italy.

At the same time, other ships have shifted to flags of convenience. Seabourn Cruises moved from Norway to the Bahamas in 2002; Silversea Cruises shifted two of its ships from Italy to the Bahamas; and several years ago Radisson Seven Seas Cruises changed ships previously registered in Finland and Norway to the Bahamas. In early 2002 there were rumors that Royal Olympic Cruises, which has traditionally used the Greek flag, was considering registering its newest ship in Malta.

What attracts cruise lines to flags of convenience? Money: cheap registration fees, low or no taxes, freedom to employ cheap labor. As foreign corporations, they avoid virtually all US taxes. Royal Caribbean Cruises Limited pays no corporate income tax, and Carnival Corporation pays tax only on its land-based operations in Alaska through Holland America/Westours. As well, because the cruise lines are subject to the laws of the country in which they are registered, their ships operate free of American labor laws and many other regulations. During the proposed merger of Princess Cruises and Royal Caribbean Cruises Limited, a key issue was whether the arrangement would preserve each

company’s tax-free status. Provided documents assured stockholders of both companies that there would be no individual or corporate tax liability. Lawyers for Carnival Corporation — a competitor in the proposed merger with P&O Princess — expressed a different opinion.