Thanks for bringing this up. While there are some legitimate reasons for tips in more expensive restaurants to be higher, a straight-percentage rule is really pretty dumb. The “ten times” differential is no exaggeration at all, and I’ve certainly had better service at some low-end restaurants.
Without getting into all the possible considerations, I will suggest, for adequate service, an absolute floor of $1 tip per staff trip to the table. In some diner situations, this may be over 50% of the actual bill; so be it.
You don’t even have to differentiate between classes of restaurants. If I have a $75 tab with water only, it might be $105 if I add a bottle of wine. The wait constantly refills our water glasses, but I refill the wine glasses myself. That cheap (for a restaurant) bottle of wine adds six bucks to the tip, and what if I’d wanted an expensive (for a restaurant) bottle of wine? Same exact service in either case.
It’s not about what the waiter “deserves”. It’s about what the customer can or will pay. That’s why tipping is a percentage of base price, and not a flat fee.
Same with commissions. The sales guy at Ethan Allan isn’t working much harder than the salesperson at Weekends Only, but gets paid 5 to 10 times as much on the same commission percentage because they’re selling premium products to people who can afford it.
You say it’s “not about” what they deserve–but in the case of tipping, each of us can try to make it more about that, and some are arguing that we should do just that.
But there are zero jobs where pay is based on what you actually deserve. I can appreciate the sentiment, but it’s a pretty tall order to upturn all of economics on its head for the sake of a small sector of the service industry.
And any attempt to “pay waitstaff what they deserve” will rightfully be seen as a spiteful attempt to cut the pay of highly tipped waiters rather than some sort of magnanimous boon for the ladies at Waffle House.
Think about it. People eat at Waffle House because it’s cheap. They aren’t going to start tipping Flo $50 a meal. And people at Delmonico’s or wherever the rich folks eat aren’t going to be happy about getting $5 tips either. A flat rate just won’t cut it.
So, in what sense do you think it’s possible to make it more fair? How do we even actually tip what the waiter deserves?
I don’t advocate a flat rate. As I said, there are good reasons that service at expensive restaurants should cost more. I just don’t think it should be a strict function of the check. And there should be an absolute floor, unrelated to the check.
It seems to me that your whole argument here puts the cart before the horse. If the principles of economics are being upturned here, it’s tipped professions that are doing it.
In basically every non-tipped area of employment, the employer has to factor employee income into the cost of doing business, and price the products or services accordingly.
When i leave my dentist’s office, i understand that the money paid by me and my insurance company covers the business overheads like rent, wages for employees like receptionists and hygienists, and income for the dentist himself. Similarly, when i pick my car up from the mechanic and pay my bill, i understand that this also covers the wages of the people who worked on my car, and that their take-home pay is not affected by my own whims or generosity. And even if i make a purchase at a place that pays its sales force on commission, like a car dealer or an upscale department store, there’s still no expectation that i will tack on a voluntary gratuity to cover the commission, because it’s already baked into the price of the merchandise.
Even in the not-for-profit sector, employers manage to calculate revenue and expenses without requiring tips. I work for the state of California, and my university students help to pay my salary through their tuition fees, which are added to state appropriations in order to fund the university system. There is no tip jar on my desk for students to make contributions.
In light of all this, it seems to me that a system requiring tipping is the aberration here, the system that requires some justification. And if no-one’s ever really paid what they “deserve,” then why not make professions like waiting tables work along the same economic model as almost every other job?
You say that you don’t think the debate over tipping percentage is a debate about what people “deserve.” I’m interested to know whether you think tipping should be considered an obligation in our society, something that everyone should do except in those very rare instances where the service is not simply mediocre, but measurably bad?
mhendo, I don’t think your points are in opposition in any way.
I agree with DrCube that tipping is largely a function of what people can afford to pay and what the commonly-accepted “normal” is.
And that imagining tipping 10x more at a fancy restaurant is really about fairness is a post-hoc rationalization.
And I agree with you that tipping basically should be abandoned as a concept (or at least, the normal tip should be 0%). Though as requested by the OP, we shouldn’t be going there.
I waited tables in the mid-60s, and one thing that people aren’t mentioning is the amount of tips reported to the government. Many of the people I worked with reported only 25% of the tips on the form we filled out, so 75% of their tips were under the table, so to speak. Of course nothing was computerized back then, so perhaps that can’t happen today.
It was a small, sit-down restaurant and bar. Half-pound hamburgers were $1.50, which was shocking to me. French dips were $1.30. For fun, about ten years after I started teaching in a public school, I went on one of those inflation calculator websites and found that I made more as a waitress than as a teacher, even with my limited minimum wage.
They still did that when I worked at Pizza Hut at the turn of this century, 2000-2001. The manager specifically told new hires to “claim enough tips to get you to minimum wage and pocket the rest”. There was a convenient button in the time card software to do that automatically for you, even. I think it’s harder now that everybody tips with a card instead of cash, though.
The same sort of thing happened when i waited tables.
And it’s another good reason to get rid of tipping. While no-one really loves paying taxes, we have decided, as a society, that taxes are the method by which we fund many of the collective goods that we take for granted. And any group that can easily avoid paying taxes on its income is leaving more of a burden for the rest to shoulder.
There are waitstaff and bartenders and other tipped workers who make good incomes, and they should pay their fair share of income tax just like the rest of us.
I agree with those who say that tipping as a % of the overall bill is nonsensical. If a patron orders a $1,000 bottle of wine, then the waiter gets a $150 tip for…what? For bringing over the bottle and un-corking it? Meanwhile the staff at the greasy-spoon diners might be working much harder serving a family of five but get only $8.
I thought a little insight might help here. My wife used to make 2.13 an hour as the lead waitress at a very high end restaurant in The Woodlands Texas. She generally worked about 15 hours a day. She was required to pay the wages of the hosts and the bussers, and the bar tenders, although the bar staff got paid 8.00 an hour. This payout was based on the percentage of the total bill of the patron. This added up to nearly 11 percent.
So if you tipped her 10 percent, she paid to wait on you.
There is a law that requires employers paying tip wage to bring your pay up to federal minimum wage if you don’t make enough, but this does not happen in reality because restaurants don’t budget for this. She worked at 5 different places and I worked at three restaurants, this didn’t happen for me as well.
She also had managerial duties since she was lead waitress.
You get a paycheck that says VOID on it because the amount is 0.00. The last restaurant I worked at I added my hours to my tips that I was required to report and found out I was making $4.13 an hour, I brought it up to the wait staff manager and he said he would look into it. The next day I was fired.
It was my third job at the time so I was ok to let it go but a lot of other people don’t have that ability.
You generally have to report it now, it’s all on credit cards and the computer does that for you. It’s super sweet to find out at the end of the year you made 12k and owe the IRS 700 dollars because although you never got a paycheck you could cash, they didn’t provide enough of a wage to offset your required federal income tax contributions for the year. A third of the waiters I worked with at the last waiting job I got fired from were in the rears with Uncle Sam.
I have no doubt that this sort of shit happens. Barbara Ehrenreich made a similar observation in her book Nickel and Dimed, in which she undertook a series of minimum wage jobs to see if she could get by. It’s a fucked up situation.
But if this keeps happening, it’s because employees don’t go to the authorities.
If you had kept track of your underpayment, using a diary along with your pay stubs to record the occasions when you did not make federal minimum wage, and after a while reported your employer to the feds, they would have been in some real hot water.
In theory, tips are gratuitous gifts and not income but we have decided that we can bend the rules a little bit because, obviously, it is part of the waitress’s compensation.
Similarly we treat the carried interest portion of a hedge fund manager’s portion of gains on the hedge fund as compensation (and therefore ordinary income) rather than pretend he is getting capital gains because … oh wait, we DON’T do that, we give the hedge fund managers a break because they really need it.