Should America Tip ?

Great Debates
1

There have been a few threads of late concerning tipping, mainly in America so I hope this is not overkill. I was thinking about the tipping situation last night while I was working out and I now have a theory.

TIPPERS ARE HURTING THE AMERICAN ECONOMY!

And here is why I think this ( a lot of this may be wrong but I know you will all keep me right )
In Britain wage rates can go up but they are not allowed to go down. In America they have a minimum wage which I think it must be illegal to pay under, except for the waiter (I will use waiter to refer to males and females) situation where tips are part of the salary and expected to make their wages up to minimum or more.

So what if everyone in America agreed on a date to just stop tipping? The restaurant owners would have to increase what they pay to the minimum wage and when Americans decided that they would like to start tipping again (as a real gratuity and not as par for the course) then the owners would not be able to sink the wage rate.

Restaurant would never be busier that the first few weeks of the ‘Tip-off’. Patrons could eat for less and know at the same time they were helping waiters into the bargain. It would be the patrons job to ask each waiter how much they are getting paid and report any owners who don’t conform to the appropriate authorities.

Self-esteem in general would go up, patrons would not worry during the meal how much to tip. Waiters would get a boost when they do get tips because they will know it is for a job well done rather than a gimmick to play on the conscience of patrons to provide them with a living wage. Owners profits would increase as the waiters feel the need to up their game for the bonus then patrons will enjoy the increased service and frequent more often resulting in a cash boost for the owner to make up for increasing waiters wages and therefore boosting the economy in general.

Now I am not an economist or anything so I hoping that some of us will be able to project what would happen should America enter the Tip-off. The only thing I am really sure of is that waiters would definitely feel the pinch straight away, and that is why I suggest that during the Tip-off patrons could informally tip outside the restaurant in such a way as it would be nothing to do with the owner.

This is my first debate topic, there are current threads in THE PIT and I think IMHO, the former is the place to call people from “cheap” to “wimps for tipping lacklustre service” and the latter is the place to say “ yes I do tip. ” or “ I don’t think we should feel we have to tip “. The topic here is –

  1. Is tipping hurting the American economy ?

  2. What would happen if America stopped tipping ?

  3. Is tipping maintaining the status-quo and hurting waiters in the long run?

2

Nope. The costs of labor are built into the cost of the meal. Increased labor cost means, generally speaking, increased meal cost.

3

But increased patronage in a competitive market could also have the opposite effect, If everyone went to the slightly cheaper place others would have to go cheaper also.

4

Hence, the global domination of Taco Bell and the complete absence of snooty French bistros.

5

I really think that tipping should just be included into the price of the meal. That way all arguements end. The wait staff gets paid a decent wage and no one has to worry about tipping. The only people I can see that will be hurt from this are the Dunkin Donuts people. They’ll have to put their little tip cups away. :slight_smile:

6

A point to consider here:
When I was waiting tables in the early nineties I averaged $14 - $18 an hour in tips. I was compensated by the cafe where I worked at a rate of $2.50/hr.
So in order for me to make the same amount of money my empoyer would had to have ponied up a 500%+ increase in my wages.

Servers, (waiters and waitresses etc.), are often used to perform other duties besides the actual waiting of tables, (sidework), at the same less than minimum wage rate of pay that they make while actually waiting tables. This labor would have to be done at an increased cost to the employer. At least two to three times as expensive if they get a minimum wage employee to do it.

The cost of the meal would most likely go up because in addition to the increase in wages, there would be a corresponding increase in the taxes that an employer would have to pay on behalf of his employees.
Servers wages would probably drop over all. No help there.

Asking a stranger how much money they make is rude.

I suspect that this “worrying” isn’t a signifigant dmpener to self esteem.

LOL.
Servers always think that they’ve earned the money they are tipped. I’ve NEVER heard one say anything even remotely like tipping is “gimmick to play on the conscience of patrons.”

First, for reasons I’ve pointed out above, (increased tax burden and increased wage burden, etc.), owners’ profits would not increase but decrease.
Second, servers already see themselves as working for the guest, (customer), as the guests provide the vast majority of their income. (Servers’ paychecks often just cover their taxes.)
Third, if all restaurants increased their level of service the same amount relatively, then relative market shares would not be affected by the event. So restaurants wouldn’t benefit in an increase in business. They have to do more in relation to the competition otherwise the status quo is maintained.

You should think about this point. Why did this occur to you? Stop tipping, but keep tipping.

No. It is a set of customes that seem to benefit most everyone involved, xpt the IRS.

Server positions would be filled by the same people who fill McD’s jobs. Professionals would find some other profession.

I’ve not seen any reason to think that tipping is hurting servers.

7

The waitstaff would make a worse wage than currently. Food costs would increase. Guests lose, servers lose, employers lose.

8

You’re not giving credit to what going out to eat is about. You’re applying a framework from a product industry to a service industry.
Going out to eat isn’t about getting food. It’s about being served.
It’s also about a sense of status. I mean if you are going out on a date especially for an anniversary or prom or a second or third date you don’t think, “What’s the cheapest place I can take my someone special and get a nice meal?”
Rather, restaurants, in these instances, are chosen based on perceptions of quality. Most of us people are willing to pay more for better- even if the “better” is only in the eye of the beholder.

9

With the way waiters treat customers today…I can’t imagine what it’d be like without the tip incentive. This from a former waiter.

10

I agree. Servers and former servers are either your best or worst guests. If you know your stuff, servers are the best guests you can have. If you’re incompetent, there’s no hiding it from a server as guest.

11

Yes food costs would increase but that would be offset by not having to tip. Amd how would a wait staff make worse wages than now? I thought the whole point of tipping is because they make less than minumum wage now.

12

No, you have that precisely backwards. The whole point of allowing employers to pay waitstaff less than minimum wage is that their income is expected to be supplemented by tips.

Seriously, tipping in America goes back way beyond the implementation of the minimum wage in the 1930s.

13

All right, then what if we were to add a service charge of 15% to 20% to all meals in a sit down restaurant. We could then do away with tipping and the wait staff is properly paid.

14

Tipping is important. It serves two purposes (1) rewards those who really do well with an incentive to continue their outstanding service and (2) weeds out those who don’t provide good service.

I don’t feel an obligation to tip. I tip because the service warrants it. You have to be really bad to not get a tip, though. Even the worst get my 4 cent “to make a point” tip. When I get service that is over and above what my wife and I were expecting, we make sure to give them a good tip because we want to encourage them to continue providing that kind of class service. Without that extra incentive, it would be pot luck serving, and bad would win out since there would be no incentive to go above and beyond. If all you get is $5.50 an hour, why be the best on the floor when you only have to be slightly better than the worst on the floor and you all make the same amount of money? This is a case where capitalism works. The best make the most, and that is the way it should be. Only the worst waiters would benefit from such a change, and the best would be severely punished.

A very bad idea.

15

Why add the service charge, when everyone can pay a lower base charge, and then tip based on the qualities of the server?

You seem to have a desire to prop up bad servers, and strip good servers of their incomes. Were you one of the bad ones? I’m not sure where this comes from. The good servers would lose under this scenario. Their base pay would not match their pay with current tips. If it did, the cost of the restaurant would reach the point that business would dry up and they would all lose their jobs.

16

When I waited tables, mumble years ago, I found it a point of pride to earn better than 20% on tips. Why should I lose that extra tip incme which my ability brought me?

No doubt a mediocre waiter, who typically earns less than 15%, would be thrilled at the prospect.

  • Rick
17

You do know that employers pay half of certain taxes for employees, don’t you?
Oddly enough, many servers don’t claim the entirety of their cash tips to the IRS*.
Employers only have to pay taxes for employees in relation to what they are claiming on their taxes. If the employer paid the wages then there would be documented wages that would necessarily be taxed.

They would make worse wages because most employers wouldn’t be willing to pay competent waitstaff the $15 - $25 /hr + that they are making now.

Also, there’d be an increase in other labor from other laborers who work at cheaper rates to make up for the reticence of employers to have $20/hr employees roll silverware and other sidework duties when they can have $7/hr employees do it just as well.
This is an increase that might not be immediately apparent to someone unfamiliar with the way the system works now.
In short, because of taxes and the sidework system, the costs of a meal would necessarily be increased more than what would have been tipped.

I think that paying servers less than minimum wage is because they make tips not the other way around.

Good servers in good restaurants make well above minimum wage, often several times it.

*****[I **always** claimed exactly what I earned for tax pruposes]

18

One of the problems with the tipping system, though, is people who don’t tip. I used to have a roommate who was a server at a family restaurant. One night, she had a party of twenty come in and stay for a couple of hours. She didn’t serve many other tables. The restaurant didn’t have a policy to add 15% to large parties. She got $1.00.

If people are going to be that ignorant, and they are, the system needs some work.

But I have NO idea how to fix it.

Julie

19

No, never have been a waiter, thank Og. I was just throwing these ideas around to play devil’s advocate. I had been following the Pit thread on Black Knight and just wanted to discuss this topic without the vileness of the Pit.

20

Just don’t get people’s objections.

You don’t have to eliminate tipping, or include it in the bill.

You pay the workers a living, or minimum, wage, and allow the diners to tip for good service. They’d just tip less than the current 17.5 - 20%. The diner pays roughly the same, the worker is guaranteed a proper wage. The restaurateur won’t necessarily lose anything, since the minor price rises will go straight to the workers’ salaries, like before.

That’s how it works in many other countries, and it’s fine.