Tipping: let’s not

This entry was inspired by Wait But Why’s unsurprising blog post on the necessity of tipping (linked below). In the lead in on Wait But Why’s Facebook page, he says

Tipping is about making sure you don’t mess up what you’re supposed to do.

I call his blog post unsurprising because he admits to having once been a server. He claims he was “undertipped” — but I disagree that undertipping is a real thing. I disagree with the tipping system in general, but we’ll get to that. Lots of things make no sense:

Pricey restaurants

When I was in grad school, a fellow grad student told me that he had spent years as a waiter at a high-end restaurants making $100K per year (tax-free). He reported only enough of his tips to make it appear that he was making minimum wage. It was hard for him to leave that lifestyle behind — he only worked dinner hours and was free to party and sleep in the rest of the time.

Sure, he was providing a needed service. But was his work really of more value to society than, well, that of most people? The median income of an American worker is far below $100K, after all. And if your meal at a cheap restaurant costs $10, but a meal that took similar efforts on the part of the waiter cost $100 at a fancier restaurant, does the fancy waiter really deserve 10x the tip?

Claims that waiters rely on tips

According to US Federal law on tipped workers:

If an employee’s tips combined with the employer’s direct wages of at least $2.13 an hour do not equal the federal minimum hourly wage, the employer must make up the difference.

Though the rest of his article seems … if not well researched then at least researched … his claim that in the case of some tipped workers, “customers are in charge of paying the professional’s salary”. He even goes on to emphasize that for waiters and bartenders:

Your tips are literally their only income.

That is literally not true, unless the businesses they work for are violating federal law.

In what sense can we agree that service workers “rely” on tips? Only in the sense that they are gambling on their salaries: counting on the tipping system to get them more than minimum wage. Because, I’ll say it again, minimum wage is guaranteed by federal law. Even if a tipped worker doesn’t receive a single cent in tips, he will make the maximum of federal/state/local minimum wage, and furthermore, it will be his employer that pays the difference, not the customer — as it should be!

The entitlement

Now that we know tipped workers are guaranteed minimum wage, let’s examine the entitlement. I’ve gone to dinner with foreigners here and let them refuse to tip. We’ve been chased out into the street by angry servers asking if they did something wrong. I’ve been told “the standard tip is 15%” when I had paid the check separately and was intending to leave the tip on the table. I’ve had discussions with people who have been tipped workers, and the attitude is that customers “owe” them at least a 10% tip — and that’s the low end that’s supposed to be reserved for totally crap service. The blog post below claims that it’s never acceptable to tip below 15%.

Why do tipped workers believe they deserve a certain amount? A simplistic answer is that the broken tipping system in America has given them that expectation. It’s the norm to tip. There’s social censure if you don’t. People call you cheap and waiters follow you down the street. But is it reasonable for a service worker to expect more than minimum wage? Most service positions don’t require much in the way of specialized skills or education. They are not any more demanding or dangerous than other minimum wage jobs (WalMart workers, for example). There isn’t a shortage of willing waiters. Maybe I’m missing something, but it seems silly that they should expect more than minimum wage. And if they could get it with their skill set, I’m sure they would work elsewhere — where the salary was guaranteed. Yet, they willingly work for tips — probably because it’s easy to underreport them when it comes time for income taxes.

An alternative

Just don’t tip. There should be a business card that people leave in place of adding a tip. One that says more or less:

Your service was [Excellent Good Fair Poor], but in any case, I don’t tip because your wage should come from your employer, not the customer. If you believe your wage is unfair, you should take it up with your manager.

Maybe there could also be a link to some kind of Anti-Tipping Society with more info on politicians/labor unions/etc that they can become involved in to demand a fair salary that doesn’t rely on tips.

Remember: if you believe that it’s the restaurant’s responsibility to pay the tipped worker and not yours, then you shouldn’t tip — because the restaurant only has to pay $2.13 an hour if you decide to be Mr. Moneybags and leave a generous tip. That’s right — the restaurant paid your server $2.13 while you paid $20 for that $100 meal. Why on earth should you be paying 10 times as much as the actual employer? Why should someone with no special skills or education be making $100K/year, tax-free? Everyone who tips is contributing to the problem we have today. I think the only way to motivate anyone to change this system is to stop tipping.

Everything You Don’t Know About Tipping

 

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9 thoughts on “Tipping: let’s not

  1. That’s true in theory, but not true in practice. Also true in theory (at least, in my theoretical world): the amount you pay at stores should be the same as the price that’s listed. But yet this isn’t true, because tax isn’t included. By not tipping, at least on a large scale, you typically help to accomplish one of several things that you probably don’t really want:

    1) Prices at restaurants will increase to compensate for non-tippers, since their prices are calibrated to reflect what they expect to pay their waiters. As a result, those who do tip will overpay, and knowing that they are overcharged, might go to restaurants less frequently.

    Or:

    2) Restaurants that already have very slim profit margins will not be able to survive and will close. So, you may lose some restaurants that you like.

    3) If you do this frequently enough at the same restaurant, you may be denied service or treated badly.

    And, while you are somewhat likely to disagree with me here, I’ll say that I don’t want my restaurant servers making just minimum wage. Or anyone else, for that matter; I want people to be able to make reasonable incomes that allow them to live in a dignified manner. Restaurants with slim profit margins are unlikely to pay above minimum wage due to lack of tips.

    So, in this case, I think that if you want to change things in a decent manner, you have to do so by lobbying, rather than by not tipping, which only hurts those you don’t really want to hurt.

    I do agree that there is something wrong a percentage-based tip though, since that makes working at high-end restaurants very profitable, and it’s unclear that waiters there are any more skillful (whatever that might mean; if they bring me my meal, make sure it doesn’t have any animal products in it, and generally don’t do anything stupid, I’m happy).

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    1. The amount you pay in stores IS the same as the list price in more reasonable countries like Canada! And it’s also true for most (grocery store) food in California.

      I think if restaurants raise prices, they will lose clientele: so I doubt raising prices will be their answer. For lower-end places where profit margin is slimmer, I think they’ll be more likely to switch to a serverless model like McDonalds. For higher-end places, I think they can afford to pay their servers without going bankrupt.

      Anyway, I’m not sure I believe that it’s necessary to have the customer pay the wages of the waitstaff. Tipping is certainly not customary through much of the world, and there are still people willing to be waiters and restaurants charging decent prices.

      I actually don’t see having a server as a requirement at a restaurant. I think if you offered people a 20% discount to put in their order at the counter and bus their own tables, most would take it.

      Waiters also tell me I should lobby, but I disagree. I have a simpler solution. If I tip, then I agree with you that it’s my problem and I need to lobby to have it changed. If I don’t tip, I’ve made it someone else’s problem, and that someone else should be very motivated to do something about it, lest their gamble that taking a server job gets them more than minimum wage doesn’t pay off!

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      1. Okay, a serverless model is fine with me; I have no objection to picking up my meal at a counter. In fact, I don’t have a preference one way or the other. I guess some people go to restaurants for “ambience” and don’t want that or generally want other people to do things for them, but those are things I’ve never managed to understand at all.

        My general attitude toward principled actions/boycotts against some paradigm you don’t like is that they’re only worth doing if they actually punish the people who deserve to be punished. In the case of not tipping, it mostly hurts the waiters, and it hurts the restaurant owner a bit. I definitely don’t think that the waiters deserve to be punished for the fact that culture of tipping (and even the general server model) is a bit silly. I probably also don’t think that the restaurant owners ought to be punished, since they’re just responding to the cultural paradigm and would modify their price scheme if the paradigm were to change.

        Also, one more comment: for better or worse, adults do not generally seem to respond very well to words of praise; they expect to be paid for good actions, rather than just given compliments. (This is an observation, not something that I understand well. I’m not really an adult.) This trait has unfortunate consequences in surprising places, from my perspective: running chess tournaments for children is popular because you give the winners trophies, and they’re happy. So you charge entry fees and give away a few essentially worthless objects at the end, and you can make a profit. But in adult tournaments, you usually have to pay the winners, either making the tournaments less profitable or else forcing entry fees to be very high (or, typically, both). I think you’ll find over time that waiters will not be interested in doing a good job just to receive a card saying that they did well.

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      2. Ah, I see our disagreement. My I don’t see boycotts/principled actions as a way of punishing anyone. I am not interested in punishing, but rather, in trying to change what I see to be an inefficient/broken system. This is just what I’ve found to be the easiest way of doing so (either avoiding being served by tipped workers or not leaving tips — which I actually haven’t tried yet except when service was abysmal).

        I agree that servers wouldn’t be satisfied with anything other than a good tip, but not with your general statement that adults only respond to money. A couple of counter-examples: Yelp (no one gets paid to write reviews), Amazon (same), volunteer work (I volunteer at Animal Care and Control and no one gets paid to do so). Anyway, the little “card instead of tip” idea I proposed was only to explain that the lack of tip wasn’t due to bad service/being cheap, and to provide information about how to get involved to change the paradigm — and not to actually please the waiter. I have no delusions about that.

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  2. you wouldn’t last a week in a restaurant, your information is inaccurate, and you are the reason people suffer. yeah it sucks that tipping is literally their wage but taking it out on the worker who is just trying to survive is a very immature and inefficient strategy to reform that system.

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    1. Oh? Please tell us what’s wrong with my information. I’d like to correct the inaccuracies.

      I’m not talking about taking anything out on anyone. That implies vengefulness. I simply don’t agree with a system and I’m proposing what I see as the most efficient way of changing it (most efficient for the customer, I mean). If you have a better proposal, I would also like to hear that.

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      1. “I’m proposing what I see as the most efficient way of changing it.” You don’t seem to have provided even a single reason for the purported efficiency of your proposed way, and the method you base it on (generalization from a sample of ≤1, in your case probably some 100k Stanford GSB bro) is not even threadbare…

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      2. I’m minimizing effort for myself, and maximizing incentive for the tipped worker to fight for a fair wage. That’s how I measure efficiency. I’m still eager to hear your proposal on how I can do better.

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