Wednesday, August 14, 2024

Tipping is haphazard and unfair.

Am I expected to tip when I pick up a "takeout" order at a restaurant? (I do. It seems silly. What "service" am I paying for?)

What about the fellow at the self-service gas pump if he points to the place on the pump where I push the green "debit" button?  He works for minimum wage. Shouldn't I give him a dollar bill to augment his income a little? He is outside in all kinds of weather. (I hand him a dollar.)

If two people rush out to wipe down a car after a $10 drive-through car wash, do you give each of them a dollar? A single dollar for them both? Is five dollars excessive? It is clearly a system designed to personalize an impersonal service, a way to generate tips. Should I play along? (I do play along. I give each of them a dollar.)

The whole system is unfair because it is so haphazard. Time and effort are unrelated to tip income. And the income doesn't necessarily go to the person you tip.

Tipping moved into the political realm by Donald Trump's proposal in Las Vegas to end federal taxes, including payroll taxes, on tip income. He bet it would win him attention and votes in the state with the highest proportion of workers in the hospitality industry. It is bad tax policy but smart politics. Kamala Harris immediately called that bet, or nearly so, with her own proposal. (Hers doesn't include payroll taxes, which goes into Social Security.) Sober-minded commentators criticized both of them, observing that: 1. Most tipped employees make so little money that they don't pay much in federal taxes; 2. It was unfair to workers doing roughly similar work with similar incomes, but whose incomes would be fully taxed; 3. America needs the tax income; 4. People other than tipped hospitality workers would want in on the action, and soon we would begin seeing invoices marked with a "basic charge" and then a box to check "20% tip for job completion" as a way to re-define income as tips. 

I had a restaurant meal last weekend. The bill came with three boxes at the bottom to check. ___18% tip  ___20% tip ___25% tip. In Oregon, employees who get tip income are required to be paid at least minimum wage by their employers. Tips come on top of that, so customer-facing employees in high-end restaurants do very well if the places are busy. Those jobs are coveted. It is no harder to open a $100 bottle of wine than it is a $25 bottle, but the final bill is much higher.

The customer doesn't know how tips are allocated in any given establishment. Maybe the policy is set by the restaurant manager. Maybe it is done at the discretion of the server.  Maybe the server needs to share tips with the hostess to ensure that good customers are brought to their section, a quiet bit of "protection money." Maybe the bartender needs to be tipped to make sure that drinks are made promptly. Maybe a server likes or dislikes certain bussers. 

Liberals, who emphasize fairness as a moral value, have reason to dislike the current tip system since it is so haphazard. Conservatives who want a system that rewards individual effort and value can dislike it for the same reason. There is inequality in who pays the employees in an establishment where all customers are treated equally. Some customers tip well. Some do not. Maybe it works out at the end of the day for employees, but better tippers subsidize the cheapskates.

It does not have to be this way. In many parts of the world employers are fully responsible for paying their employees. The cost of the service is built into the bill. In China, if a taxi drive to the airport is 95 Yuan and you give the driver 100, he gives you five Yuan change. He treats an attempted tip as an insult. He is a professional doing a job. How dare you treat him like a beggar looking for charity from someone from a higher class? People are equal in China. 

I enjoy the food at a neighborhood Indian restaurant and the wait staff greet me with a smile and call me "Mr. Peter." (The Blue Royal, at the corner of North Phoenix Road and Barnett, for the information of Medford readers.) I had been overtipping there since they opened, partly in the hope they stay in business and keep making the tandoori chicken kabob. Also, the staff is so friendly. After I overtipped for a year, the employees let me know that the owner keeps all the tips for himself. He pays us a fair salary, they told me. I guess I was disappointed they weren't getting my tips, but I should not be. Their policy is pointed in the direction I think I want because it is the fairest. I now tip a steady 18 percent. I consider that the standard tip now, essentially a price expectation built into the bill anytime one sits down for a meal. Then employees are paid by the employer.

My guess is that the system won't change. Employees who get tipped like a system where they get extra money that their employer would be unwilling to pay them. Employers like having customers paying their employees. Employees who don't share in tips leave the job. Customers think that tipping employees ensures friendly, customer-pleasing service, in contrast to what they may get in, for example, government offices. Generous tippers are generous people, and they feel okay being generous. Cheap people like knowing they are getting away with saving money, so they feel okay, too.

The system is ridiculous, but no one is all that unhappy about it, except for people who think that the new expectation of 18 percent is too much. I don't. I would like to see 18 percent standardized and placed on every bill and built into the price of the service. Then the customer pays that bill.



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9 comments:

Anonymous said...

Tipping isn't required in any service encounter unless it's earned. It's a tip for going beyond the minimum requirements of the service and you will quickly find out whether the employee understands that or not. If they aren't trying to earn it, too bad. This is what I learned when I was living off tips.

As a political issue it's ridiculous.

Peter C. said...

I had a 60th reunion up in Maine this weekend. I moved out of there back in 1964, but there was a great diner in town that I had always loved when growing up. Anyway, me and a friend of mine went there for breakfast just to share the memories. As we had coffee, I asked the waitress if the coffee cups were for sale? She said no, but they used to be. The mug they served had a beautiful logo on the face and I really wanted them as a souvenir. So, I asked waitress if it would bother her if I took them home? I said I would leave a big tip. She said okay. So, she took them away and cleaned and wrapped them just for me. The bill came to $13 for breakfast, which I paid by credit card, and then I laid down a $25 tip in cash, just for her. I think she was happy and I know I was. Do I feel guilty. Maybe a little, but I know I made her day. She was nice.

Peter C. said...

I always tip 20% because it's easier to figure out in my head. I've only not tipped at all a couple of times when the service was awful. Other than that, 20%.

Ed Cooper said...

I like to tip, especially for good service. Knowing an Employer was keeping them for himself would give me pause. I would rather the employer raise everybody's wages and prices equally.

Mc said...

If they have a tip jar (or virtual tip jar) at the checkout I don't tip. If I'm at the checkout it means I'm doing the work.

I would never leave a tip that goes to the owner. How does Peter know that employees make a fair wage? If they are family I believe minimum wage laws don't apply.

Tom said...

The best Mexican street food in Medford is Torta Loca on Stewart street. I lunch there once a week and leave a 30% tip. This place is just a food truck with some picnic tables for eat in customers. Most of their business is take out. I’m pretty sure they like me.

Anonymous said...

My kids have worked as servers at a well-known Jacksonville dinner house and 4% was taken out of their tips for the credit card fees when the customer paid with a credit card. Ever since then I always leave cash tips.

Left-leaning Patriot said...

This whole tipping thing has gotten out of hand. When I was growing up in the late 70's/early 80's, the minimum wage in the upper mid-western state where I lived was $3.35 per hour. The minimum wage for restaurant servers was lower, around $2.15 per hour. I think this was in recognition of the tipping culture of restaurants and other food and drink establishments. I had teenage friends who made better money as waiters and waitresses than I did, working in retail. But it's a good thing laws have changed to do away with that lower "tipped worker" hourly wage. Depending on the restaurant, and the relationships among the workers, the servers usually shared tips with the "busser" and sometimes even the cooks. The quicker the food was prepared back in the kitchen, and the quicker the dirty tables were cleared and cleaned, the more money everyone could make. My view these days is that servers and bussers and everyone else typically make the same wage (minimum, sometimes more, depending on the supply/demand of workers), so there really isn't an economic imperative to tip. But I usually tip at least 10-15%, and even more if service was good and the server was hospitable. I have enough money to be somewhat generous and "share the wealth." I know plenty of people, however, who resent the pressure/expectation to tip, especially when the ipad/electronic pay machine assumes that 20% is standard. I think that can backfire on the workers.

M2inFLA said...

Tipping is a us thing.

In my travels to Europe and Asia, I rarely saw a line item for gratuities.

Last year, on our arrival in Iceland, our driver to our hotel offered two tips:

1. The tap water is fine to drink. You don't need to buy bottled water unless you really want to.

2. Don't tip in stores, restaurants, drivers, etc. Iceland employers pay well, and offer good benefits. It's not necessary to tip.

Here in the US it's a bit more unusual: some places expect tips. Some automatically add a tip. Some places have tip jars. Unfortunately, most Americans are brought up thinking they must tip. Even when they travel outside the US.

I've traveled the world for decades. I started with a simple pamphlet to help my travels. It told me basic things: which countries were gratuities expected, what had gestures to avoid, and how to avoid trouble.