So who is in the right...the restaurant or the customer?

[mhendo]

@Malthus

I guess I’m showing my age, but there seems to be a constant upwards pressure over time on what is “customary” for reasonable service. I always thought it was 15%, with more reserved for really exceptional service. Now I’m hearing that lots of folks routinely give 20%, and more for exceptional service.

When i worked as a waiter in Canada in the early 1990s, 12% was acceptable, and 15% was generally considered pretty damn good. If you got more than fifteen, it was a red-letter day.

There have been, however, some good reasons for upward creep in tipping percentages over the years. Former SDMB moderator manhattan was involved in the finance and investment industry, and a crucial part of his job was keeping track of changes in costs in various industries. Back in 2005, he gave a very reasonable explanation for the upward trend in tipping percentages.

I had made the following argument:

@mhendo

I do tend to agree with you on that issue, blowero. After all, restaurant prices go up, so, as you say, this increase should, by itself, result in a commensurate increase in the income of wait staff. Increasing the prices, and increasing the percentage over time, seems a little over the top. Will we some day arrive at a situation where the tip is expected to be 80% of the bill?

In response, manhattan said:

@manhattan

Ah. But over the last several years, food inflation has been less than inflation generally and the food-away-from-home index has been growing more slowly still – the result of enormous competition in the industry. So some percentage creep on the tip has been necessary to keep real server wages constant. We’re starting to see some indications that the restaurant cost index is now moving up more quickly than general inflation, primarlily as some of the quick serve and casual-dining chains finally give in and try to pass through higher protein costs. It’ll be interesting to see if the trend continues and what, if anything, will be the public’s reaction as regards a “standard” tip.

This seems quite reasonable to me. I would be interested to see what has happened to the food-away-from-home index in the five years since he wrote that post. One problem, it seems to me, is that tipping, like many other aspects of economics, seems to succumb to the ratchet" effect, where it will go up when relative restaurant costs decline, but will not go back down during times when relative restaurants prices increase.