Food service and tipping

Kathleen Geier has a nice piece in WaMo reflecting on this really heartbreaking article about the abuse restaurant workers endure.  She doesn’t have a big policy solution, but recommends (i) we be civil to waitstaff and (ii) tip generously (she says 20%).

I wish I agreed about (ii), but not only do I despise the whole convention of tipping, and  despise it more after learning how corrupt it is and how it exposes workers to theft by employers, but I believe doing more of it is anti-worker and inhumane.  Of course, if you are the only one who leaves an extra-big tip, you have done something nice for the waitstaff (unless the boss has figured out how to steal it all; see the Salon article).  But to think you can do people any good in the medium to long run by generally tipping more, you have to believe the labor market in this industry doesn’t work at all.  It is hard to see the wheels turn because it’s not only wages but also menu prices that adjust together when the rules change.  But suppose tipping were ended, either everywhere or in a single restaurant: employers would have to offer more salary to get people to work for them, and raise menu prices, to a first approximation, by 15% or whatever the typical tip is.  Not much change in anyone’s income or costs, but everything would be in the open, and the wages would be reported and taxable (maybe still higher prices, if tipping is shielding a lot of the labor cost from tax, and a good thing), and it would be much harder for employers to rip off the help.  If customers take Kathy’s advice and just tip more, conversely,  nearly all will be competed away from the workers as employers (and customers) pay lower wages and customers pay less for their meals. That the minimum restaurant wage of $2.13 per hour is the actual wage in many places proves that tips are fungible against salary; no-one can live on that.Tipping in restaurants used to be 10-15%, and only for table service.  Now it’s 15-20%, or more and tip jars are popping up on every counter.  Tips should go up with inflation, as long as they are part of the deal.  But the dinner tab and the price of everything else  is already going up that way: why should there be inflation in the percent going to tips?  Why should I be made to feel like a chump or a jerk after every meal knowing that doing the right thing for my waiter is making the world a little worse? And don’t tell me it improves service, either for me the next time I come or generally.  I don’t eat at the same place every day, week, or even month, nor have the same waiter when I do.  I don’t get any better service in American restaurants than in French or Italian ones, where service is on the tab and not negotiable, nor do I get better service from waiters who get tips than from dry cleaners who don’t.

The system is lousy in fact, economically, and maybe worse affectively/symbolically. Tipping someone who’s done you a service is a condescension reserved for specific classes of service and by extension, social classes of recipients, and has no place in a civilized world.  Think your doctor, or your kids’ teacher, would appreciate a twenty slipped to them after an office visit or a parent report night?   It symbolizes the idea that the buyer is the sole judge of a fair wage for a service and the worker has to take it and like it, much like turkeys given out to the lord’s serfs or, for that matter, cornmeal for slaves.

I’m looking for the restaurant that has a box on the menu that says:

“We pay our workers fairly, and they, and we, pay taxes on their earnings, just as you do.  Feel free to ask your waiter about this.  Please don’t tip; our menu prices include the extra salary that makes up for tips.  Enjoy your meal.”

Author: Michael O'Hare

Professor of Public Policy at the Goldman School of Public Policy, University of California, Berkeley, Michael O'Hare was raised in New York City and trained at Harvard as an architect and structural engineer. Diverted from an honest career designing buildings by the offer of a job in which he could think about anything he wanted to and spend his time with very smart and curious young people, he fell among economists and such like, and continues to benefit from their generosity with on-the-job social science training. He has followed the process and principles of design into "nonphysical environments" such as production processes in organizations, regulation, and information management and published a variety of research in environmental policy, government policy towards the arts, and management, with special interests in energy, facility siting, information and perceptions in public choice and work environments, and policy design. His current research is focused on transportation biofuels and their effects on global land use, food security, and international trade; regulatory policy in the face of scientific uncertainty; and, after a three-decade hiatus, on NIMBY conflicts afflicting high speed rail right-of-way and nuclear waste disposal sites. He is also a regular writer on pedagogy, especially teaching in professional education, and co-edited the "Curriculum and Case Notes" section of the Journal of Policy Analysis and Management. Between faculty appointments at the MIT Department of Urban Studies and Planning and the John F. Kennedy School of Government at Harvard, he was director of policy analysis at the Massachusetts Executive Office of Environmental Affairs. He has had visiting appointments at Università Bocconi in Milan and the National University of Singapore and teaches regularly in the Goldman School's executive (mid-career) programs. At GSPP, O'Hare has taught a studio course in Program and Policy Design, Arts and Cultural Policy, Public Management, the pedagogy course for graduate student instructors, Quantitative Methods, Environmental Policy, and the introduction to public policy for its undergraduate minor, which he supervises. Generally, he considers himself the school's resident expert in any subject in which there is no such thing as real expertise (a recent project concerned the governance and design of California county fairs), but is secure in the distinction of being the only faculty member with a metal lathe in his basement and a 4×5 Ebony view camera. At the moment, he would rather be making something with his hands than writing this blurb.

59 thoughts on “Food service and tipping”

  1. spoken like someone who has never worked in an industry that relies on tips and who has never been a regular at a restaurant or bar. i realize that there are problems with some employers as brought out in the article referenced above but refusing to tip is a miserable excuse for a policy prescription. among those people in professions that rely on tips your attitude puts you in the well-deserved category of “cheap bastard.”

    my standard tip is 15% for adequate service (and by the way, a 15% tip has been standard in the u.s. for at least the past 30 years) but i have tipped up to 30% for exceptional service. the quality of service i get in those restaurants where i am a regular as well as from delivery drivers for the local pizza places in rarely less than exceptional. regarding other people in professions that provide services, i make a point of getting to know something about them and giving them the occasional present based on my knowledge of their interests.

    you seem to have nothing more than a purely theoretical concept of what you are writing about. it seems as though you go through life undertipping and then wondering why the service you receive isn’t any better than it is. i would definitely not want to accompany you to any restaurant that you go to with any frequency since the staff there already know you aren’t going to give a damn about the service they provide you so why should they give a damn about the service they give you. i strongly advise you to seek out some folks who actually work for tips and run your suggestions by them and see what they think.

    1. If you’re a regular, maybe the size of your past tips makes a difference. But if you’re not, the quality of your service isn’t going to depend on the (unknowable) generosity of your subsequent tip; at most, it depends on the generosity of the last guy’s tip. What makes a difference is how you interact with the waitstaff, and how oppressed they are by the workplace.

      I’m all for tipping reasonably (if I weren’t a skinflint, I’d say for tipping generously) – but I’d greatly prefer a system without tipping, and I suspect the workers would do better paid a decent wage, on the books, and without other workers in the establishment dipping into their tips, as is often the case.

      1. i suspect that waitstaff in middle to low end restaurants would do better with the changes in the tax code and in wages that would accompany the elimination of tips. those waitrons at the higher end restaurants would probably prefer to keep tips. i’ve known a couple of waiters in dallas ( one at old warsaw and another at the french room) who made 6 figures in tips annually.

        1. Yeah, in high end establishments, waitstaff would likely be willing to pay the owners to allow them to work there.

    2. Navarro, I guess I can understand why this post triggered your anger about people who undertip or don’t tip (whoever they are), but it would have been more useful if you had actually read it. I don’t have any complaints, generally, about service and I don’t undertip: “as long as its part of the deal”. As far as not having dinner together is concerned, that’s a good idea because the conversation would probabably be incoherent.

    3. I’ve worked in the service industry and, for that reason but just because of pure curiosity into human nature, I’ve spent a lot of time reading hundreds of comments on blog posts about this topic. (The way it usually goes with arguments, it’s kind of like a gruesome car wreck without the deaths.) People make this and eating out in general into a much bigger issue than it really is. Roughly speaking, the vast majority of the population does things fine, and it’s really a small subset that is psychotic, cheap, annoying, or some combination of those things.

      There are a lot of points I could make, but I’ll simply say that while it’s fine to ask for certain things, you have to be realistic and realize that not leaving a tip for some arbitrary reason is okay. By this, I mean, don’t go into an Applebee’s expecting the $500 a plate service of Per Se in New York City and then not leave sufficient compensation. This isn’t to say that the server can be completely out to lunch mentally, that the restaurant can’t be clean, and that your order can’t come out correctly, only that different establishments have different atmospheres and thus the experience will be kind of different by default. You can be polite and pleasant like you should be with anyone. If you are unhappy, make your concerns known in a reasonable way and, if you keep ending up disappointed, don’t go back.

      As far as the tipping goes, it can be a pretty weak system in many cases, but it’s the system we currently have. In a lot of cases, going out to eat and not leaving a tip is not all that different than having someone clean up your backyard and not paying him. I understand money is tight for a lot of people, but that doesn’t mean you can stiff someone for a service they have provided. If you don’t want the service provided, don’t use it. I’ve not eaten at a tipping establishment because I didn’t have enough money. And note, this isn’t to say that leaving 15 percent instead of 20 percent is the worst thing in the world. More is of course always better, but nobody but the world’s biggest jackass of a server is going to complain about pleasant people who tip 15 percent and then go on their merry way, if that’s all they can afford. It’s the people who expect the world and then tip 4 percent that get cursed out, and rightfully so.

  2. Gird your loins, my friend. Some of the nastiest arguments I’ve ever seen have concerned the topic of tipping.

    The last time I got involved in a similar discussion, I got called all sorts of names because I revealed that I generally tip 16%-18%, not the full 20% (or more) that all moral and upstanding tippers aspire to.

    1. i would consider 16-18% as a standard tip to be generous for adequate service. the 20-30% tips that i hand out are for exceptional service only, although i will admit that at those places which i frequent most often the service i receive is seldom less than exceptionsl.

      1. I tend to go more by dollar amounts. That is, at cheap places (or places where I purchase very little) I leave large percentage tips and at expensive places I leave smaller percentages. The (usually women, often “older”) who serve me at the corner diner work just as hard as the waitstaff at the latest trendy place-to-be.

    2. As I said above, that’s a perfectly standard tip, and as long as you aren’t making unreasonable demands or nasty to the service staff, nobody will think you are some moral monster. More is better, if you can or want to swing it, but 16-18 percent and a pleasant attitude should make you feel comfortable to go anywhere.

  3. I tip generously. People who don’t (under the current system) go to the hell I don’t believe in. And everything Michael says is true and correct and it would be a better world if it were run his way.

  4. What percentage of a hypothetical restaurant’s cost structure (one where the waitstaff is appropriately paid) would go to the waitstaff?

    50% seems high, 10% seems low.

    But does 20-25% make sense?

    Tipping 20% implies around 17% (.2/1.2) of your payment for the meal goes to the waitstaff, or we can round up to ~20% assuming the wages portion of waitstaff pay makes up at least 3% of their pay. (I’m assuming the restaurant doesn’t get any share of tips; I’m aware tips may be shared with busboys although I believe that’s rare)

    I don’t know much about restaurant cost structures, but (!) with all of the other labor (cooks, etc), rent, capital expenses etc. I can’t believe the waitstaff should be getting 30% of the revenue. Maybe I’m wrong.

    My point is, whatever generosity consideration of the poor pay waitstaff get engenders in your heart, at some point an x% tip starts to direct too much of the revenue to the waitstaff.

    (personally i tip around 20%, generally rounding to the nearest whole amount)

    1. But not all of your tip goes to the waitstaff. When I waited tables years ago, tips were split between the waiter, the busboys, and the kitchen staff — most of the workers in fact. And though it didn’t happen where I worked, I heard horror stories from staff about their experiences at other restaurants where the managers skimmed straight off the top before splitting.

    2. According to data from the 2002 Census of Businesses (I for some reason can’t extract the data from the 2007 economic census), the annual payroll for all workers in full-service restaurants was about $46 billion (in 2001), and total annual sales were about $146 billion. This *does not* include tips, as it is based on the wage and salary payments made by the businesses. So actual wage and salary disbursements in 2001 were about 30% of sales, and tips would be *in addition* to that…This is simply a “for what it’s worth” addition to the converstion, and to provide a small bit of quasi-real data to the discussion…

      1. 1) This assumes you’re correct the payroll doesn’t include tips. Given that a lot of tips are reported to the tax authorities (because of credit cards, if nothing else), and that many of the tips pass through the employer’s bookkeeping (again, because of credit cards), I’m dubious.

        2) “workers in full-service restaurants” isn’t just waiters. I’d be surprised if the waiters were even half the workforce, given cooks, cleaners, managers, etcetera. Also, how is “full-service restaurants” defined? Does it mean table service, or does it include counter-service restaurants, ie every fast food establishment?

        The second point is especially important. You’ve deluded yourself into thinking you’ve “brought some quasi-real data to the discussion”, but you don’t have enough information to interpret your data.

  5. The difference between 20% and 15% on most tabs is going to be a couple of dollars — that’s all it takes to allow you to think of yourself as generous rather than as some anal tightwad who calculates a tip down to the penny. And the math is easier.

    I’m surprised that the article doesn’t compare the American way with the standard service charge that’s added most places in Europe (and often in the US for parties of six or more). That would also allow the restaurant to keep the menu prices the same. The service charge gets added afterwards, like the tax. Restaurants might still be able to stiff the staff, but the service charge prevents cheapskate tips. And if customers want to be generous, nothing is stopping them from leaving some cash.

    1. Is there a standard service charge “added most places in Europe”? I thought service was factored ino the menu prices in many European countries, with no surcharge, though I have little personal experience.

      1. It depends. In British restaurants, you can frequently see an explicit service charge included. If it isn’t, it’s customary (though not required) to tip around 10%.

        Note that British restaurants may still stiff their waitstaff by having tips count against the minimum wage. Still, if wages + tips do not add up to the statutory minimum wage, the employer is still at least required to pay the minimum wage.

        German restaurants don’t include service charges; there, service is factored into the price of the meal (and drinks!). It’s still customary to tip between 5%-10%, usually by rounding up to a close Euro value. This may actually be an artifact of how paying is handled in German restaurant: Your waiter or waitress will come to your table, present you with the bill, and you’ll pay them directly (usually in cash), without the elaborate payment ritual typical for American restaurants (evidence that I’m not making this up).

        Germany does not have a statutory minimum wage; thus, even though the German hospitality sector is fairly heavily unionized, a non-unionized waiter may earn below the typical low-end wage of 7-8 Euro/hour (paying less than 2/3 of the prevailing wage is contra bonos mores, though, and thus illegal). Hence, some tipping is encouraged for largely the same reasons as in the United States.

        In Switzerland, service is included in the prices and waitstaff enjoys a decent minimum wage. This is largely because in the hospitality sector, the collective bargaining agreement between employers and unions has been declared to be universally applicable (“Allgemeinverbindlicherklärung”) to all employers and employees by the federal government as a matter of law. This is common in other sectors, too (such as construction) and essentially makes the entire country a union shop.

        1. I lived in Germany nearly two decades ago; at the time, essentially all transactions were in cash (credit cards were exceedingly rare, and writing a check was a baroque experience involving entering your bank account details into a check provided by the vendor), and the experience was close to what you described: you paid in cash, and the server kept the change. But there was nothing we’d recognize as tipping: if four people ate out, and the tab was very nearly 60 DM, they paid 60 DM, the server returned with the change, and the change was refused. Mind you, the change was worth about fifty cents. They didn’t, for example, pay 65 or 70 DM. The whole thing puzzled me: it was tremendously bad form for the customer to pocket their change, but the “tip” the server received was about equal to a bottle deposit or two.

          1. There may have been regional differences, too. When I lived in Berlin around the same time (as a teenager, 1986-1991), some minor tipping seemed customary. Mind you, I had never paid a bill at a restaurant myself, and I was 15 years old when we returned to Michigan, so my memory may be playing tricks on me, but I’m reasonably sure that my parents tipped more than just rounding up to the nearest Mark. I’d have to ask my family to be 100% sure, though.

            That said, these days, whenever I’m in Germany (I have family there, and we’re collaborating with a German university), a tip of up to 10% does indeed seem to be the norm.

            An additional note on payments: Credit cards definitely were a rarity back then (and still aren’t all that common); I’m surprised by your description of paying by check, though. Checks back then used to be Eurocheques, which worked much like regular checks; what you are describing seems to be more like the original vendor version of the German direct debit scheme (which, these days, reads the relevant data directly from a so-called EC card).

    2. The difference between 20% and 15% on most tabs is going to be a couple of dollars — that’s all it takes to allow you to think of yourself as generous rather than as some anal tightwad who calculates a tip down to the penny. And the math is easier.

      Right. An extra dollar or two makes you a sport rather than a jerk. Forty-dollar tab? Tip eight bucks, or at least seven, instead of six. You’ll feel better.

  6. I always tip at least 20%. I figure somebody has to make up for the cheap bastards. Besides, less than 20% is disrespectful.
    Where I’m living in scandinavia now all employees are paid a living wage and employers of course contribute to national healthcare, retirement, etc. The result is that there are few restaurants that provide table service. Most eateries are buffet style (smorgasbord) or family operated by imigrants with names like “Pizza Kabob”*. The full service restaurants I’ve been to are high priced with lots of empty tables.
    The USA enjoys affordable restaurants built on the backs of underpaid, abused workers. Pay staff living wages/essential benefits and the whole industry gets priced out of business. There’s just no such thing as a free lunch.

    *My first time in Stockholm I went to a big pizzaria at lunch rush. My friend and I squeezed into seats at a small table we shared with two strangers who avoided eye contact. There was a puddle of beer at my place. When my order arrived to my astonishment the waiter plopped my plate right in the puddle as he ran by. Welcome to Stockholm! I don’t ever want to hear an american complain about wait service in the good old USofA.

    1. While I agree that “there ain’t no such thing as a free lunch” (no pun intended), I think your example may be a bit on the extreme side (or specific to Sweden, where I’ve never been).

      My experience in various European countries (either from living there or from attending a conference) has not been one of substandard service; more likely was that I found myself paying more (especially in the form of more expensive drinks and no free refills), though not really horribly more than, say, at Applebee’s or Max and Erma’s.

      A living wage for waitstaff and kitchen staff does not add THAT much to the cost of a meal (typical minimum hourly wage seems to be in the 7-8 Euro range, plus whatever social taxes the employer has to pay).

      1. Given path dependency and America’s fondness for doing this in a down low way, you could make a strong case for upping tax credits, lowering or eliminating tax rates, especially the payroll tax, and/or providing certain services (especially those for health care) for free or at very low cost for employees below a certain income range, which would include a lot of restaurant workers. It’s kind of hard to do this without going down the poverty trap route, but notice I said “hard” and not “impossible.”

  7. Interesting topic, two thoughts:

    1) Part of what may be driving up tips is the idea (if true) that labor costs have been less susceptible to efficiency improvements than non-labor costs over the last several decades.

    2) A restaurant whose tables average a $30 bill (pre-tip) would pay $9-$13.50 per hour at 10-15% tip rates if one person managed 3 tables an hour, which seems like a reasonable (perhaps even a low) burden. But over a 4- or 6- or 8-hour shift the problem is you need 12 or 18 or 24 tables per waitstaff member, and customers come in bursts around mealtimes.

    Part of the problem seems to be the low utilization of waitstaff and the peaky nature of demand, which puts all kinds of pressure on trying to manage off-hour costs down vs. the waitstaff expecting this to be, if not a full-time job, at least a substantial part-time job and wanting overall pay to reflect that.

    [If I’m wrong about the peakiness of demand, I don’t understand what the problem is – waitstaff handling 3 customers an hour for $30 per table bills seem like conservative assumptions and at 20% tip rate that’s $18/hr]

    [And if the problem is that the waitstaff don’t get the tips – as the article lays out – then arguing about whether to pay a larger tip or what the right-sized tip should be seems to only slightly address the problem]

    1. 24 tables, each occupied for two hours, means the waiter spends only five minutes with each, and that includes taking the order, communicating it to the kitchen, delivering the food, delivering the bill (usually twice, with credit cards or change), plus any other interactions (beverage orders, checking the customers are happy, etcetera) – and also any time the waiter spends walking from the table to the kitchen, a share of any personal breaks the waiter takes, etcetera. I admit I’m going on first principles rather than experience here, but 24 tables sounds flat-out impossible.

      Note that some of the waiter’s interactions become briefer or unnecessary if it’s a lower-end restaurant serving smaller parties – but then you also expect the tables o turn over faster. If each is occupied for only one hour, the waiter has 150 seconds per table.

      1. I think you may have misunderstood the premise — the idea was that it would take 24 tables over a shift to make up a living wage, not 24 tables at once. When I was in the industry, I’d routinely have 4-6 4 tops to handle at peak times. I netted about $12/ hour after tipping out the kitchen and bus boys. Living wage? Sure, but I wouldn’t want to make a career at that pay scale.

        1. That’s a good point. People forget, or if they’ve never worked in a restaurant, they don’t know — it’s very hard work.

  8. I recognize that there are some abuses and other problems in the restaurant service industry, but I’m not convinced that doing away with discretionary tipping (and increasing prices) is the best way to address these. Tipping the waitstaff in a restaurant is one of the few instances as consumers that we get to directly reward good service (and express our displeasure in poor service). Personally, I generally tip in the neighborhood of 20%, but on occasions where I believe the service has been particularly poor, I will tip less (although I never refuse to tip at all).

    Waiting tables is no one’s career goal, and I believe that almost all waiters and waitresses would prefer to be doing something else. That leads to an environment where it’s real easy to be demoralized and perform badly. I believe that the tipping system creates an important incentive for waitstaff to perform well. Again, as a consumer, let me say that eating out at a “nice” restaurant can cost anywhere from $100 and upwards for a couple; nothing can ruin what should be an enjoyable but expensive experience as much as poor service.

    1. I resent being asked to precisely calculate the relative merits of the waitstaff, and even more so being asked to factor into this my perception of whether they have special needs such as children to feed. This may shock you, but I almost never audit the finances of the establishments where I eat, nor do I investigate their wait staff: and yet I’m expected to knowledgeably decide how well their waiters deserve to be paid, with 50-100% fluctuations bring common (less than 15% to more than 20% are repeatedly cited in this thread, and that’s ignoring the stiffers and the extremely generous). This is nuts!

      You point out that rarely do you get to assess and reward the performance of people who don’t directly work for you. Well, yeah. Someone is paid to do that job, and for a number of rasps they’re likely doing it better than you are. If I have a good experience someplace, I thank the people responsible, recommend them to others, and return myself; I don’t expect to decide on the workers’ pay, or to decide whether they deserve to eat. If I have a bad experience, I tell people to avoid the establishment; in a truly awful case I might complain to the management, though I can’t think of a case where I’ve done so. I don’t need the service worker to abase themselves to placate my fickle sensibilities and loosen my purse strings.

      So: everything you say you like about tipping, I resent, because it’s not my job, I suspect I’d do it poorly, and I don’t really need the petty power trip involved.

  9. Stiffing on the tip hurts the waitstaff without impacting the business at all, and complaints that tipping is “condescending” belies a relationship with money that I suspect isn’t common outside of the upper-middle class.

    I’ve been a tipped employee and I’ve made six figures in salary. In both cases, it was clear that the size of my income was only tangentially related to the quality of my work. The main difference is that I had far more discretion in how to meet my customers’ needs when I worked for tips and much more power over how I allocated my personal resources.

    1. Stephen–I like your second short paragraph, with an interesting exception. I, too, at different times in my life, have worked for tips and have made a nice large income. I, too, find myself in total agreement with your last sentence. However, my experience in the middle sentence was the EXACT opposite. I found in both situations that the better I worked, the better I earned.

  10. This is one of many cases where what one would do in a perfect world is at odds with what one should do in this one. I agree that as universal policy, it would be better if waitstaff were paid more flat out, not least to protect them from cheapskates who don’t tip them. But if I withhold a tip from my own waitron to protest a macro-economic reality, I am making her/him suffer for the world not being different at a level far beyond what either of us can change. Hence I always tip a lot — 15% is never enough, 25% is frequent, especially if I know that the waitron has kids to feed.

    1. Keith, what fraction of the tip increase from 10-15% to 15-20% over the last decade or so has ended up with the waitstaff? Do you agree that the more people you get to follow your lead, the less good it will do for service workers and the more the world will move away from a better state?

      1. Michael — I don’t think anyone follows my lead on this ever, this is not something in the world that I can influence, that is my point. I can’t imagine any customer has ever said “Let’s tip more, like Keith Humphreys” – no one cares what I tip other than the person getting the money. So for me it’s a private question of does the harried single mom who served lunch and made jokes with my children week after week at Appleby’s (and gets I found out, no health insurance) benefit from me tipping more vs. less. I assume she does better if I tip a lot, so I do. If the manager steals it of course that is different, but even then the manager being a swine isn’t driven by my tips – I can’t control him/her any more than I can control other customers..

        I could I suppose ask a regular waitron the tip division system in the restaurant and adjust if needed, i.e., write zero tip on my credit card that the management sees while putting cash in the folder for the server.

        1. My accountant colleagues tell me the following:

          1. Tips on a credit card are reported to the IRS, and counted by management against wages (they are allowed to credit tips against minimum wage up to an unconscionable [to me] level in most jurisdictions).
          2. Credit card tips are also divided according to whatever schema the establishment uses. This can (but need not) include skimming by management above the reduction of minimum wage. It is establishment dependent.
          3. Cash tips are not usually fully reported to the IRS. In fact, the IRS has a formula it uses to infer tip income: it is up to the filer to show that she did not attain that level of income. Given that the IRS knows that cash tips are under-reported, showing that their formula is wrong in an individual case is difficult.
          4. Cash tips may or may not be subject to whatever division schema the establishment has.

          Based on that knowledge, I do not tip on the credit card often. Rather, I use cash for the tip. In fact, I only use the card if I’m short of cash at the moment. I rely on the waitron to take care of the bus-ers, and smart waitrons will.

          I worked as a waitron in an earlier version of my life in three different establishments one was a chain, and one was a fine(r) dining establishment. At that time (mid 70s) 12-15% was considered standard in California. The third was a ‘tweener sort of place — a coffee shop with pretensions. In all three places we were expected to split our tips with the bus-ers. The split was 15- 20% of our tips. If I had a bus-er working closely with me for a large party, I generally gave that person an additional cut if I got a good tip. Similarly, if I’d tied up the kitchen with a large order and the line cooks took care of me I made sure they got a cut, too.

          Not surprisingly, the tips were best at the fine(r) restaurant and worst at the chain joint. I was rarely if ever stiffed at the fine(r) restaurant, and frequently stiffed at the chain joint — it catered to a younger clientele (Farrell’s, if anyone remembers that place).

          1. I had no idea that credit card tips got this treatment. That’s rather awful. If they aren’t going to give cash payers a discount, how can they take the processing fee out of the tips? It hardly seems fair to anyone. And it seems quite dishonest. And then to get audited to boot!!! Cheese and crackers. Maybe I agree with O’Hare now.

          2. A very close friend of mine worked in a chain restaurant, and if you counted tips as income, the managers made less than the more advanced waiters. It’s no excuse for them stealing, I’m just saying.

            Plus, you know who gets treated even worse? The people who grow and pick the food.

      2. in texas and colorado, the two places i am most familiar with, standard tipping has been 15-20% for at least 30 years. at a family reunion i attended today i asked several of the older guests about their recollections about tipping and they all agreed that in the 50s and 60s 10% represented a standard tip but it had moved to 15% by the mid 70s. your continued assertion that the tip percentage has increased over the past decade doesn’t correspond to what’s been happening in this part of the country. i don’t know if that reflects a regional variation or if you’re not really paying attention to what is customary but either way it rings false.

  11. I used to tip 15% until I heard about an acquaintance who received a dime tip after serving a party that ran up a $130 tab (this was 40 years ago too). Since then I’ve tipped at a flat rate: 20%.

  12. Enlightened Oregon again: no tip credit against wages for servers, they get the same minimum wage as anyone else, $8.95/hr, indexed to inflation. Helps them buy guy, where a helpful pump jockey has a job dispensing it. Oddly, both gas and restaurant food are no more expensive, and are in fact generally cheaper, than in neighbor states. Naturally, economists here are all humble because they’ve had to admit that all their rhetoric on wages is nothing but propaganda for the wealthy. (you’re right, I made that last bit up, but the rest is all true.)

  13. I don’t see how tipping restrictively or not tipping at all is going to fix the underlying problem (which is a hole in the minimum wage laws, lack of unionization, better labor laws, or a combination thereof). You don’t get to tip 20% in France or Italy because French and Italians are more stingy with tips but because they have stricter labor laws that don’t allow or effectively counteract such exploitative practices.

    In the meantime, your restaurant staff has rent to pay and to feed themselves (and quite possibly, their children). So I doubt that unilaterally restricting your tipping is doing much (aside from the fact that you are unlikely to get enough people to do it to make it an impact); it will not address the practical disenfranchisement of low-income workers (who may have the vote, but seem to have their interests routinely ignored by many of their representatives in Congress [1]) that allows them to be exploited. Yes, tipping is essentially a social VAT currently, but I’m not seeing not paying it as a solution.

    (Disclaimer: I did work as a waitress during college once, so I’m not entirely unbiased.)

    [1] It does not help that much of the American electorate tends to believe that poverty is generally one’s own fault, including the poor themselves (in John Steinbeck’s words, they see themselves as “temporarily embarrassed millionaires” rather than as exploited, including in modern times a rather expansive definition of “middle class” that seems to include everybody who’s not actually living under a bridge, including what before would have been called the working class).

    1. This actually raises an interesting question related to the person who mentioned how, in his Scandinavian country, there are fewer people working as servers and the service is different: how much are the European countries which are vastly different than ours similar to one another in this regard? In other words, are France and Sweden similar in how few people work in these jobs. If not, why?

      The reason I ask this is that I wonder if some of it might be cultural. The costs of things can’t be completely removed from any discussion, but if there’s a history of not eating out, or having restaurants work a certain way, or something else, perhaps it IS possible for the trade off between service sector jobs and the prices in restaurants to not be so extreme.

      1. I don’t have any hard statistical data, I’m afraid. My anecdotal experience (constrained by the fact that with two little kids, my husband and I are somewhat limited in our options for going out unless we can arrange for a babysitter) is that there doesn’t seem to be much of a difference in how often people go out (taking into account that eating out is not a financial concern for most of our friends, colleagues, and ourselves, and thus may not be representative of the general population), though there are definitely cultural differences.

        We do tend to pay more compared to the United States (and we’re happy to), so I suspect that on average, there would be less eating out.

  14. It’s the tip jars on counters (also mentioned by O’Hare) that I find annoying. Now they are appearing even at concession stands in movie theaters where it is hard to imagine the price of popcorn does not cover wages of the managers much less the staff behind the counter. But worst, just for me personally no doubt, is being expected to pay a tip when I just want to buy my granddaughter an ice cream cone.

  15. I wonder why we tip the waiter who brings the food, but not the kitchen staff who made it? It’s not an easy job, or a well-compensated one, either. Frankly, I rarely go to a restaurant for the service. I go for the food.

    Tip jars on counters are a great place to leave the change that you don’t really want to carry around anyway.

    1. some people do tip the cooks. i have done that on occasions when the quality of the food was well above what i had expected it to be or when a special request was handled with particular artistry.

  16. If you want to protest the existing set-up of waiter compensation, don’t with-hold tips – that just makes people question your motives, and it hurts the waiter first and foremost. Instead, lobby for laws eliminating the exemption that waitstaff have from minimum wage.

    1. See above: that’s what Oregon does, and we have great food places, and we don’t have to go into them smelling of gasoline because we no more have to pump our own gas than we would go into the kitchen of the restaurant and ladle out our own soup.

  17. It is my understanding that, in the United States, when one pays with a credit card, the management of a restaurant will keep a percentage of the table server’s tip equal to the percentage which the restaurant is charged by the credit card company for the privilege of accepting the card. That’s in addition whatever base amount they are stealing from the employee. So, when I am paying with a card, which is most of the time, my usual tip is 22.5%. I suppose I could pay the bill with the card and then tip in cash, but like many Americans I am often not carrying cash.

    I agree that the whole situation is ridiculous, and it would be much better if the law required that all workers be paid appropriately and treated with respect and I didn’t have to do math and worry that I will make an error and look like an ass. However, U.S. labor law allows and encourages the mistreatment of workers so I choose to leave relatively large tips.

  18. 49 comments and no Reservoir Dogs reference, or did I miss it?

    The Internet isn’t what it used to be.

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