tipping, money, 20 dollar bill, US money, tip, change,
Personal Finance

Should We Outlaw Tipping?

Tipping is one of the more interesting human concepts. Ostensibly, it’s about providing a sense of gratitude or incentivizing client service. The line begins to fade when it comes to who should I tip and for what? It can differ dramatically by region and custom. In the United States, it’s customary to tip at restaurants, but not obligatory at McDonald’s. Restaurant owners can justify paying a lower wage to their wait staff, because they make it up on tips. But, often, the service staff includes dishwashers, cooks and other ‘unseen’ members of the team who are underpaid compared to their serving counterparts (or sometimes just receive a much smaller percentage of tips).

In 2015, The New York Times reported that Union Square Hospitality Group discontinued tipping at 13 restaurants and and simply raised prices on all food. This, according to the article, was in light of regulations for kitchen staff that didn’t allow them to benefit from being paid tips. According to CEO Danny Meyer, the Museum of Modern Art’s restaurant The Modern implemented this in November 2015 and set hourly wages for kitchen workers to $15.25 from $11.75. According to research from MIT’s Living Wage Calculator, that is still below the $16.14 minimum living wage for New York City for a single adult. Meyer is quoted as saying that in the 30 years that Meyer has been involved in restaurants, kitchen income has increased 25 percent while servers pay has gone up 200 percent.

Largely, tipping may be seen as the cost of convenience. It’s the reason the proliferation of Amazon or Blue Apron offers up ease without actually looking at the costs: both financial and unseen human labor. Side note: Every few months there seems to be a new report about Amazon factory workers who have to walk 18 miles a day or skip bathroom breaks to meet their quota.

Tipping opens the possibility of unlimited rewards, and I’ve seen articles about athletes who tip thousands of dollars to good servers, but ultimately it feels like a self-serving lottery. Instead of having a discussion about a living wage, we continue in a system of tipping.

Tip of the hat

I read Julian Baggini’s piece “To tip or not to tip?” in Aeon Magazine a few month’s ago and it’s definitely worth a longer look. There are vastly different customs ranging from country to country on tipping. It’s complicated and confusing for travelers to know when to tip and when not. The podcast Freakonomics had an episode questioning the very notion of tipping. Why not just add a 10–15% charge onto the goods or services?

Arguments for tipping hinge on this idea of good service, incentivizing the best workers to perform. Why shouldn’t the best server be rewarded for his efforts? But, the evidence shown (in the form of surveys) by Michael Lynn at Cornell suggests excellent service only raised tips about 1.5 percent.

I found this paragraph particularly interesting from Baggini’s Aeon essay,

“Cultural differences can also be partly explained by the ‘equity theory’ developed in 1963 by the workplace behavioral psychologist John Stacey Adams. This is the idea that we have been socialized to feel anxiety or distress when our relationships with others are inequitable. In Japan or Norway, giving tips highlights status differences, increasing the sense of inequality and heightening discomfort. In the UK and the US, hoxwever, tipping is seen as reducing the financial inequality between customer and staff, and so relieves tension.”

Baggani argues that the more personal the encounter between patron and server, the larger the tip, writing, “The bill covers the purely financial exchange but the tip, as a purely voluntary gesture, is a sign that the evening has been more than just a commercial transaction.”

Wrapping it all up

I think there is truth to this notion of reciprocity through tipping, but I think the elimination of tipping would allow a more transparent equitable system. It might mean that meals and taxis cost more money, but that may be an incentive to provide equal pay for equal work. The tipping system in place, currently in the US, feels arbitrarily and culturally enforced,. It doesn’t feel like a properly thoughtful system of payment. I think we should transition to a ‘bonus’ kind of system. If you have an absolutely amazing meal or taxi ride or any other service, feel free to give a little extra tip.

What do you think? Leave comments or thoughts below! Read more about why I started this website here.

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