Tipping points

I like that post. Here’s a quarter for your efforts. Don’t spend it all at once.

I think that there was some experiment recently reported that how well or badly a waiter or waitress waits has no effect at all on the size of the tip (in the US). I’m curious if that is true in low tipping countries (I would doubt it).
So many middle class americans have waited tables as youngsters, and I always wonder if that effects their propensity to tip routinely, as well. (Me, I never had a tipping job, but I tip generously, partly as a compensation for the fact that I don’t spend much, expecially on drinks)

Some of my friends who have worked as wait staff leave really big tips, but also very intentionally leave small or no tips if they think the service was really bad. It makes me uncomfortable when they do it, but then I never waited tables.

I like the idea that German waitstaff are keen on promoting equality (in a country that still has remnants of a feudal system). But the refusal to accept gratuity can also be taken as a gesture of independence: I earn enough money to get by without a tip, thanks. This has intimations of bourgeois self-sufficiency. So, working class egalitarians, or middle class aspirations?

About 110 years ago The International Journal of Ethics (now just Ethics) published a short paper by a non-academic woman, with a reply by Josiah Royce, both about tipping. The idea was that this was a new practice being introduced to the US from Europe, reflective of European class-condescension, and inconsistent with the democratic and egalitarian ethos of the US. Has the situation now reversed itself?

I like the idea that German waitstaff are keen on promoting equality (in a country that still has remnants of a feudal system).

Hmm? Can you name a country that doesn’t have remnants of a feudal system? The traces of the haciendas in the US southwest certainly qualify there.

Also, the Nazis more or less successfully eliminated the class system in Germany, so that aspect of the feudal system at least is gone.

I have lived in both tipping cultures and non-tipping cultures and when I ask people about tipping I get pretty straight forward answers. From both contexts they tell me that ‘in the US and Canada waiters are paid badly based on the expectation that customers tip, and so one should tip.’ Tipping is fair compensation for the service provided. In many European countries waiters are paid ‘normal’ wages, thus tipping is not obligatory.

Lots of fun side issues to think about on the margin or course. For example (maybe), tipping cultures give one more opportunities to feel like a big shot, adding to the experience of going out for some (i.e. many in the group that can afford to go to nice places). But the essentials are about fairness and a little more moral motivation on the margin to boot. No?

If you have ever worked as a waiter/waitress you know that tipping is a significant source of income. Servers often work for an hourly rate that is laughable, not even close to minimum wage. They are expected to make most of their money on tips. It’s not entirely like being paid on commission because you can expect to receive something no matter how bad you do. Most Americans are taught to tip at least 15%, even if the service was lousy. If the service was good, they bump it up to 20%. If you’re feeling the need to prove yourself, maybe you tip more than that. I wasn’t taught to use the tip as a way to judge the quality of the server, and I typically tip the same amount regardless. My friends who work in food service tend do tip on the higher end, and they make sure I do as well…

On a side note, one of my good friends is a bartender and she has her own theories about what sort of people tip well. From her experience, surgeons (among other high-end earners) are the stingiest. They can be cheaper than college students, believe it or not. Low-income workers tend to be the most generous. She thinks this is because the lower earning customers are more in tune with the fact that even the bartender needs to make a living. The more financially secure you are, the more you forget about the financial needs of others… but maybe that’s only true of Best Western patrons. Who knows.

I know that in the USA, tipped employees are not required to be paid minimum wage because the government includes the tips as part of their wage. Thus, about six years ago when I was a waitress, I made $2.13 an hour. For those who feel that tipping servers in the USA displays something other than acknowledgment of that measly wage and the server’s well-done work, dispel that thought immediately.

I suspect that people who are well-off who do not tip well behave that way because they have never had such work themselves and are unaware of how low the wages are.

As to why the wage system is as it is (either via the tax code or socially), that’s another question to which I do have an answer.

I look on the tip as an opportunity to engage the wait-staff as individuals rather than simply as agents of the company they work for. I appreciate small-time entrepreneurs and some of those I’ve known who work as waiters, especially those who do so as a profession or who work at high-end restaurants, regard themselves, to some degree, as independent agents.

I adjust the tip to suit the service. If the service is bad enough to disrupt the meal I leave no tip. If the waiter has to deal with something unusual, like recently when I was with a particularly difficult date, I tip more.

Waiters I’ve talked to say that they hate serving larger groups because they generally get short changed on the tip. That’s why many restaurants include the tip in the bill for groups over a certain size.

As a first pass, I’ll go with Henry’s explanation: the next time you’re out for dinner in NYC, try and listen in as the eight office mates at the next table attempt to divide up the bill and add in the tip. It will likely get bid up well beyond 15%. But I’m not sure that settles it.

I’ve read the comments on Marginal Revolution, and two stand out. The first gives the information that it used to be in Europe that people tipped, and not in the more egalitarian United States. This was in the nineteenth century. It reversed as Americans started aping Europeans. The second was by someone who hated tipping because it created a master-servant relationship between himself and the waitstaff. He would rather relate to them as fellow wage slaves, and pay solely to the restaurant.

I’m pretty sure that tipping is a function of a less egalitarian society, and my suspicion is supported by these two comments. Tipping is another one of a large number of shoddy things that crept into American culture, after World War II.

From the abstract of a meta-analysis of the empirical tipping/service quality literature:

“The relationship between tip size and evaluations of the service was assessed in a meta-analysis of seven published and six unpublished studies involving 2547 dining parties at 20 different restaurants. Consistent with theories about equity motivation and the economic functions of tipping, there was a positive and statistically significant relationship between tip size and service evaluations. However, that relationship was much smaller than is generally supposed. The confounding effects of customer mood and patronage frequency as well as the reverse-causality effects of server favoritism toward big tippers were all examined and shown to be insufficient explanations for the correlation between tipping and service evaluations. These findings suggest that tippers are concerned about equitable economic relationships with servers, but that equity effects may be too weak for tip size to serve as a valid measure of server performance or for tipping to serve as an effective incentive for delivering good service. “

The obvious point here is that wait-staff are except from the minimum wage and have some tips imputed to them. (For this reason, even when paying by credit card, I always leave “Zero” tip on the card, and leave cash on the table.)

Wait, why do you do that? I don’t follow.

Servers must report their tips as income to be taxed. If a tip is left on a credit card, it’s taxed because it’s reported to the IRS by the employer–it must be claimed. Cash tips cannot be verified by the government, and so often are not claimed at their full value when self-reported by servers.

There was an active anti-tipping movement in the U.S. in the early 20th century. James Surowiecki mentioned it in an article about tipping in the New Yorker:

William R. Scott, in his 1916 polemic “The Itching Palm,” described the tip as the price that “one American is willing to pay to induce another American to acknowledge inferiority”; Gunton’s Magazine labelled the custom “offensively un-American,” arguing that workers here should seek honest wages “instead of fawning for favors.” The anti-tipping campaigns were so effective that six states actually banned the practice.

It’s simply traditional, at least in America, that people in service occupations should be poorly paid and at the mercy of their clientele. It might well be a legacy of our history of continual immigration, specifically including centuries of slavery, and if so it wouldn’t be coincidental that those in such jobs tend to be young or non-white.

A few years ago, during a strike of grocery workers in Southern California, conservative commenters at Kevin Drum’s place insisted that certain sorts of jobs ought to be poorly paid, at best transitory employment, and certainly should not entail medical or retirement benefits. This may help explain why teaching and nursing, once nearly exclusively women’s work, remain underpaid.

In this context, Thatcher’s notorious comment that “A man who, beyond the age of 26, finds himself on a bus can count himself as a failure” may be apposite.

We’ll be able to do without tipping when we have national health care and general respect for the dignity of labor. Until then, it will remain a private gesture of solidarity.

I imagine this sort of thing is only likely to increase, to more countries, the amount of tipping expected as normal will increase, and more industries/jobs will include tipping as something socially required of customers. Why? Well its great for the business – it both allows them to effectively have some element flexible charging, so that they can sell to more people (by having a lower absolute minimum price) while still effectively charging a significantly higher price to those willing to pay the extra.

It also reduces the businesses risk – on slow days/times they lose less money if they have too many wait staff turn up, as the cost of them when not serving is fairly neglible. If they have to pay a ‘fair’ wage whether the staff were busy or idle then they would tend to be a lot more careful about the hours and numbers of waiters. Of course this would also likely have a tendency to reduce the quality of service, as well as probably overall reducing the total wage bill (comparing with wages + tips).

The American “service culture” requires waiters to be friendly, perky, constantly to hand, etc

What, elsewhere in the world, servers are expected to be hostile, depressive and unavailable? Maybe there’s something to be said for the American model . . .

constant, scripted insincere attention from waiters

Servers are people who wait on your table in exchange for money. Their job requires them to be nice to you, and be attentive to your needs, regardless of whether they get paid through tips or solely through wages. Sincerity, however, is the one thing you cannot hire people to give you.

Tipping perpetuates master-servant relationships. But make that point in the US, and you’ll too often get irate former and current waitrons accusing you of wanting them to starve.

Except that it’s a modern incarnation of master-servant, with no real historical precedent: the subconscious rule is that you tip those who are ‘beneath’ you, thus reinforcing that hierarchy. If anyone tips their lawyer or accountant, I’d like to know.

I almost wonder if the encouragement of teenagers into menial service jobs (harry b @3) is designed to get young Americans acclimatised to environments where they are paid shittily and must perform for their tips.

Lastly, as someone who worked behind a bar in Britain, I’m acclimatised to find the American practice of extortion particularly abhorrent: don’t tip big on the first drink, and you’ll be kept waiting for the next one. There’s a brutal honesty to the power dynamic, which is quite the reverse of the food service model, but I still don’t like it.

Matt at 16: the place where 12% service was included in the bill was England, about 10 years ago (not quite as exciting as Russia, I’m afraid) – I think there may some Americanisation going on there now regarding tipping, at least in London, but still, in many parts of the country, it’s blissfully tipping-free (and I imagine restaurants have to pay their staff an actual wage).

constant, scripted insincere attention from waiters

…Their job requires them to be nice to you, and be attentive to your needs… Sincerity, however, is the one thing you cannot hire people to give you.

If you pay enough they’ll fake it convincingly, but this completely misses the point of comment 38, which is to do with the theatrical or ritual scripting of the whole thing: in the US it’s common to have ‘greeters’ in shops; every foreigner who’s been to the US or its overseas chains (like TGI Fridays) knows the whole “Hi, I’m Mandy and I’ll be your server” patter. These things grate on foreigners because they’re false-flag communications:* they look like conversations but they aren’t** – instead they’re obviously rehearsed, and required by employers as surrogates (in the sense of ritual stand-in objects) for actual service. It’s what Stephen Fry calls a “discrete horror of detailing” (although he was talking about hotel rooms, where toilet paper folded into triangles, or chocolate mints left on the pillow, are sold to the customer in lieu of attention).

* the redcap/skycap example is particularly cruel to foreigners traveling in the US: they look so much like they’re laid on by the airport to help people – they even have official uniforms – but they’re actually exactly like the short-order porters on the streets of Cairo.
** Visiting foreigners should resist the temptation to ask “are you a bot?” It just never works.

If it ever carried master/servant connotations, those have nearly all disappeared over the decades.

That’s a matter of opinion, particularly with the late expansion of situations where the need to tip is strongly implied.

I do wonder whether travellers to the US are placed in a double-bind: those forewarned that it’s a ‘tip everyone, just to be safe’ culture contribute to the tip culture, ensuring that those who are not quickly face the scorn reserved to the shoddy tipper.

instead they’re obviously rehearsed, and required by employers as surrogates (in the sense of ritual stand-in objects) for actual service.

I’ll note the scary innovation of bill questionnaires that ask customers if their waitron has fulfilled the requirements of the corporate greeting script.

I will say, though, that the skycap is often a tip-worthy resource: the guy who had a quiet word with the United check-in manager at La Guardia and ensured we made our flights more than deserved his $20.

[I habitually tip car mechanics, though for a different reason: my father usually had friends in the trade look at the car and charge a ‘tradesman’s price’, and he’d stick a tenner on top. In my part of the world, that was a mutual assumption: you discount for your mates. That stuck with me, but it’s more superstition these days, to ward off the evil spirits of bad repair jobs.]

Zeroing out the tip line on the credit card receipt and leaving cash can also increase the server’s take, since some restaurants will deduct a percentage to cover the transaction fees associated with credit cards. You pay the same either way, but it goes to the server, not the credit card company or the management.

As for the tax evasion angle, I think that restaurants are expected to withhold a set amount from the paycheck based on an assumed level of tipping. They don’t necessarily rely upon reporting of actual tips.

I work as an independent consultant and am paid directly by my customers. I see little difference between my situation and that of a waiter working for tips except that I generally have a specific contract regarding the conditions of the transaction rather than an implied contract.

Um, that makes all the difference, and it’s the status that precedes the contractual relationship. Do you receive tips? Regularly? Is it expected of your work?

Look at the basic social dynamics of the relationship: the person who serves you food; the person who cuts your hair; the person who carries your bags; the person who drives you somewhere. As opposed to the person who prepares your taxes, or the person who takes your blood pressure.

Who would have done such things 150 years ago?

Having worked in restaurants for many years when in grad school, (last gig was only about 6 years ago), let me say:
Let’s see — Master/servant relationship? Depends entirely on the customers. It can be very much like that.
Sincerity and scripting? Sucks for the server as much as the customer, but most chain restaurants hire ‘shoppers’, people who come in and check to see that all of these things are done. The reality in my experience is that really good servers do care that the customer is having a good time and enjoying their meal. And if the customers are jerks, then a good server will suck it up, smile, and rely on the script (and then go into the walk-in fridge and scream)
Most states allow restaurants to pay under $3/hour to servers. They then figure in 8.5% of sales (including tax) as tips. If the server does not average minimum wage over the week, the restaurant must pay minimum wage. This hardly ever happens in practice.
As above, 8.5% of sales are reported as wages. Restaurants have different policies on what happens to tips. But the last place I worked was pretty normal. Servers tip the bar between 5-10% of their bar sales, and their bussers 10-20% of their tips. And kitchen staff also get tipped out. So, say you sell $1000 of food and bev, and $200 is bar stuff. Start with 15% (which most good servers consider a bare minimum, if they work in a big city). Of your $150 in tips, $20 goes to the bar, because you cannot piss off the bartender — slow drinks are the kiss of death, and bad tippers get their orders moved to the end of the queue. So you have $130 left. Did your busser bust her ass clearing, filling waters, and keeping you informed about the tables when you were begging the kitchen to get your damned food right? The busser gets $30. Down to $100. In the kitchen, there’s an expediter, who exists solely to make sure the plates are set right, orders correct, and that the food goes out quickly if you can’t get to it. A dollar an hour per expediter/food runner — say two on a weekend night — $12, rounded up to $15, because you do want your food out. There you are, with $85. Paying tax on the whole thing. Still, if service is crap? I tip well under 15%

Do people normally count the tax when figuring out the tip? for a long time I always did, but then had some friends who insisted this was wrong. After that I sometimes did and sometimes didn’t, partly determined radomly and partly by whether I’d have enough money for a coffee in the morning w/o going to the bank machine first and things like that. But, since it was mentioned above, I’d be interested to know whether people normally include the tax when figuring in the tips. (The only job I’ve had that got tips was at a very nice coffee shop/bakery with one of those tip jars back when it was still sort of new. Since I’m hopeless at remembering people’s names I did worse than some- remembering what people drank didn’t seem to help as much as being able to call them by name.)

Quo Vadis, the phrase “implied contract” has a legal meaning. If we have an implied contract, you provide services and I refuse to pay, then you can take me to court and make me pay. Giving tips is customary but not mandatory, same as dropping coins into street performer’s hat or giving spare change to a homeless; it’s definitely not an implied contract.