Tipping Is Not a Reward—It’s an Insult

Yves here. Early on in my time in Oz, a taxi driver took offense at my tipping him. Mind you, Australia was and I assume still is a high minimum wage country, and a 10% tip would be seen as generous.

But we in the US have the problem of existing conditions. Restaurant economics, which are lousy to begin with, mean higher base wages for waitstaff, which I agree are 100% warranted, really will translate into higher prices. In keeping, in Australia back in the early 2000s, it was noteworthy how pricey restaurant and takeout meals were, even for their cheap and cheerful venues (then Thai).

Even worse, restaurant patrons apparently greatly value their ability to reward and punish service staff. New York City restauranteur Danny Meyer, of Union Square Cafe, Gramercy Tavern and later Shake Shack fame, set out to end tipping across his empire. Some customers resisted:

And Meyer ended it upon the Covid reopening. Note he had already lost some employees over the belief that they earned less. From the New York Times in 2020:

One of the country’s best-known restaurateurs, Danny Meyer, announced five years ago that his Union Square Hospitality Group would gradually eliminate tipping…

But on Monday, the company reversed course. Mr. Meyer told his staff that Union Square Hospitality would abandon what it calls its “Hospitality Included” policy as its restaurants reopen for outdoor dining, starting on Thursday with the flagship Union Square Cafe in the Flatiron district and extending to the nearby Gramercy Tavern in the coming weeks. (Some of the group’s other businesses are already open for takeout and delivery, and all will shift to tipped wages immediately.)

Mr. Meyer said in an interview that he still believes that tipping contributes to inequitable pay, wage instability and other problems, and that he is collaborating with the national One Fair Wage campaign to eliminate it. But as the restaurants begin rehiring today — about 95 percent of the staff has been laid off since March — he is unwilling to deny any extra compensation that might be available to employees in a time of economic crisis.

“We don’t know how often people will be eating out, we don’t know what they are going to be willing to pay,” he said. “We do know that guests want to tip generously right now.”

The Hospitality Included model, which eliminated tips in favor of a consistent hourly wage, was adopted over several years as New York State’s minimum wage rose to $15 per hour. The extra labor costs for the restaurant were reflected in menu prices, which increased by 15 to 20 percent. In theory at least, the customer’s actual cost per meal would be about the same.

Wilma Cespedes-Rivera, a bartender at Blue Smoke, a Union Square Hospitality restaurant in Lower Manhattan, has worked for the company for five years. She said that for servers, the change from tipping to Hospitality Included was painful, and many talented colleagues left for other jobs.

“People understood that the goal was a healthier balance,” she said, “but it wasn’t what we signed up for financially.”

A few months later, Eater had a long-form, well-researched story on why the no-tip movement failed. I urge you to read it in full. Some key bits:

By May 2016, data bore out the beginnings of a cultural shift. An American Express survey released that month found that of 503 randomly sampled restaurateurs, 18 percent said they had already adopted no-tipping policies, 29 percent said they planned to do the same, and 17 percent said they would consider implementing no-tipping if others did. The EndTipping subreddit, one of the more complete records of no-tipping establishments from the time, listed more than 200 restaurants that were, at one point or another, without gratuity. Although these comprised a sliver of the roughly 650,000 restaurants across the country, momentum appeared to be building.

Until, it seemed, the wheels came off. Most of the restaurants that participated in the Meyer-catalyzed no-tipping movement had, by 2018, returned to gratuity. Meyer, whose organization never fully recovered from the shift to what he called “Hospitality Included,” capitulated earlier this summer, announcing that he would bring back tipping to USHG. Thus tipping won, and decisively….

The anti-tipping cohort of the mid-2010s largely consisted of restaurants like Faun: moderately priced, casually upscale table-service spots that promised a mix of hospitality and affordability…

And in the case of Faun, Stockwell found himself explaining to guests why menu prices were higher than those at comparable restaurants. “Once you get people to understand that you’re gratuity-inclusive, there’s still the next level of this visceral connection with numbers on a menu,” he told me last summer. “When entrees are all up in the 30s versus in the 20s, it doesn’t matter if [customers] know that you are gratuity-inclusive.”…

Stockwell and Swickerath waited for other restaurateurs to follow suit. But several early adopters had already reversed course, including Craft, Fedora, and Momofuku Nishi (which has since closed entirely). “It was a miscalculation that this tide was growing,” Stockwell confided. Despite positive reviews, by winter 2017, Faun was struggling. Stockwell was unsure if the restaurant could survive the coming January, with its crowd-killing short days and frigid temperatures. He didn’t want to revert to tipping, but he felt his hands were tied. “So many times that you are operating as a business, you realize, ‘Okay, my politics and my ideals are one thing, but what’s the priority here?’”

Faun reintroduced tipping the first week of January 2018. According to Stockwell, the effect was striking. “Immediately, it made this whole thing possible,” he recalled. Although he and Swickerath would have preferred to remain tip-free for ethical reasons, he said that ultimately, “we couldn’t let the ship keep sinking.”

The article was hopeful that no-tipping might come back, but I don’t see any evidence of that.

By Sonali Kolhatkar, an award-winning multimedia journalist. She is the founder, host, and executive producer of “Rising Up With Sonali,” a weekly television and radio show that airs on Free Speech TV and Pacifica stations. Her forthcoming book is Rising Up: The Power of Narrative in Pursuing Racial Justice (City Lights Books, 2023). She is a writing fellow for the Economy for All project at the Independent Media Institute and the racial justice and civil liberties editor at Yes! Magazine. She serves as the co-director of the nonprofit solidarity organization the Afghan Women’s Mission and is a co-author of Bleeding Afghanistan. She also sits on the board of directors of Justice Action Center, an immigrant rights organization. Produced by Economy for All, a project of the Independent Media Institute

One of the things that new visitors to the United States learn—but often don’t understand—is that they are expected to tip nearly every service worker they encounter. The most obvious tipping expectation is at restaurants and bars, where they must gift an additional 18-25 percent of their total bill to their waitstaff or bartender.

Taxi and rideshare drivers also expect tips, as do hotel bellhops and cleaning staff, as well as hair stylists, and even babysitters. Delivery drivers, in the age of online shopping, expect tips—but only those delivering food via such services as DoorDash, and not, say, your Amazon package deliverer, and certainly not your local postal worker bringing you your daily dose of junk mail.

Forget those who are new to the U.S.—the expectations about when to tip and how much to tip are bewildering even for those of us who have lived here our whole lives. There are detailed guides now for the confused consumer, such as New York magazine’s explaining-and-shaming approach to tipping etiquette after the COVID-19 pandemic changed the rules of “polite society,” while exhorting readers to accept the status quo: “It’s just the rules; don’t complain.” Real Simple magazine recently issued a primer that billed itself as the “Ultimate Guide” for the confused tipper. “Tipping used to be about showing appreciation for good service,” lifestyle writer Julie Vadnal says in the Real Simple article. “[B]ut as the minimum wage has plateaued (the federal minimum wage has been $7.25 since 2009), workers have come to depend on it.” The federal government’s baseline wage for tipped workers is an unimaginably low $2.13 an hour.

What we need is an “Ultimate Guide” on how to make our economy fairer so that ordinary people are not subsidizing the salaries of low-wage workers—because that’s ultimately what tipping is. How—and why—do we tolerate it?

Think about the explicit requests for tips that are cropping up at walk-up cafes where the cashier taking your coffee order offers you a digital tablet to complete your cashless transaction and where you must choose a tip amount of anything between 10 and 22 percent in view of the worker. Sometimes the machine suggests even explicit dollar amounts—a $2 tip on a $4 coffee?—that obscures the tip percentage. If the worker you interacted with has been rude or cold, you can choose a low tip or no tip at all in retaliation. If they have been kind and you still tip frugally, you are the rude, cold one.

This quick interaction between customer and server is a veritable minefield of values, placing the onus of paying a worker directly on the person being served rather than on the worker’s employer.

It’s a sly calculation on the part of business owners to ensure compliant workers while gouging customers: A worker’s take-home pay could be diminished simply if they had a bad day and didn’t feel like smiling, while at the same time, the customer feels obligated to pay for their product, and then some. Tipping is just another way for businesses to pass their costs on to customers.

Worse, it encourages sexism and sexual harassment, especially for women workers who often lose out on tips if they snub sexual advances by male customers. According to One Fair Wage, nearly 7 out of 10 tipped workers are women.

The Economic Policy Institute (EPI) lays the blame for our national tipping culture on the 1966 amendments creating a so-called “tip credit” to the Fair Labor Standards Act. According to EPI, “The creation of the tip credit—the difference, paid for by customers’ tips, between the regular minimum wage and the sub-wage for tipped workers—fundamentally changed the practice of tipping.”

The National Restaurant Association, which is the major lobbying arm of an industry that disproportionately relies on tipped workers, has for years pressured lawmakers to keep the tip credit in place and enable the continued underpaying of workers. In a press release in November 2022, it denounced the successful Washington, D.C., vote to eliminate the tipped wage, claiming bizarrely that tipping is good for both workers and customers. The subtitle of the press release reads: “Current tipping system increases earning potential for tipped workers and allows operators to staff at levels needed for exceptional hospitality.”

According to a National Restaurant Association executive, the vote to eliminate tipped wages means that “some operators will reduce their workforce.” It’s the same logic that fiscal conservatives use to counter an increase in the federal minimum wage: raising salaries will mean people will be fired because employers won’t be able to afford to pay the higher wages. But EPI points out that “[p]aying tipped workers the regular minimum wage has had no discernable effect on leisure and hospitality employment growth in the seven states where tipped workers receive the full regular minimum wage.”

The lobbyist also condescendingly claims that “[t]he tipped income system often comes under fire because there is widespread misunderstanding about how it works.” Apparently, the rest of us ignoramuses don’t get that “[e]very tipped restaurant employee earns at least their state’s minimum wage” (emphasis in original) and that “[t]his amount is paid partly by the operator and partly by tips.”

In truth, employers, especially corporate chains, don’t always bother ensuring that their workers make at least the full minimum wage. Outback Steakhouse’s workers, for example, are suing their boss over this very issue. And, if it were true that tipped workers actually take home what is owed to them, there wouldn’t be a stark discrepancy in poverty levels between tipped workers and non-tipped workers. EPI points out that “in the states where tipped workers are paid the federal tipped minimum wage of $2.13 per hour… 18.5 percent of waiters, waitresses, and bartenders are in poverty.” But, “in the states where they are paid the regular minimum wage before tips… the poverty rate for waitstaff and bartenders is only 11.1 percent.”

Not only is the National Restaurant Association obscuring the fact that subminimum wages are beneficial to employer profit margins, but it has even deceived workers into subsidizing the cost of the lobbying that keeps wages suppressed. The New York Times recently revealed how the National Restaurant Association runs a company called ServSafe, widely used by new workers for mandatory training on things like food safety. But ServSafe is also the association’s fundraising arm.

In other words, workers are inadvertently paying to ensure their wages remain low. And the lobbying has been wildly successful.

For example, when Washington, D.C., voters passed Initiative 77 in 2018 to raise the tipped wage, the city council repealed it, instead passing a law raising awareness of the rights of tipped workers. But lawmakers never funded the law. Then, in November 2022, voters passed a similar measure, Initiative 82, with the support of nearly three-quarters of all voters (this was the vote that prompted the association’s aforementioned defensive press release). The D.C. city council has again tried to thwart the measure, delaying its implementation by a few months. Activists for 82 say they believe the restaurant industry’s lobbying has played a role.

Now, some New York lawmakers are getting ready to propose a similar bill that would phase out the subminimum wage for tipped workers in their state. And, there is strong public will to do so. A survey by Data for Progress found robust bipartisan support among likely voters to do away with a system requiring workers to depend on tips. The progressive organization One Fair Wage has several campaigns—including in New York, Washington, D.C., Michigan, Maine, Massachusetts, and Illinois—to eliminate the tipped wage system.

There are nations in the world where tipping is not only unusual, but considered downright rude. For example, according to one social media influencer of Japanese descent, tipping in Japan is frowned upon because it’s seen as “petty,” and akin to an insult. TikTok user Cyber Bunny compares a customer tipping a server in Japan to a parent giving a child an allowance.


Such a dynamic can develop here in the U.S. too, if we had a culture and set of laws that respected worker dignity. After all, money is power, and for a customer to wield power over a worker in such a direct manner ought to be considered unthinkable. Wages are not allowances, and workers are not children.

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  1. Louis Fyne

    Like America in general, tipping has too many entrenched interests, Americans hate the “pull off the Band-Aid at once approach” to change, and there is the (generally true) trope of the “dumb, innumerate American” who can’t figure out that a tipping-included $30 entree is the same as a no-tip $25.50 entree.

    The aspect of tipping that grinded my gears the most is that (in most kitchens) it is the busboys and line cooks who bust their butts the most.

    But busboys are “tipped’ by the waitstaff and (generally) line cooks do not get tips—which was why I was 100% pro-Danny Meyers (and slip the busboy a tip on top of the receipt tip).

    1. Questa Nota

      During my busboy years I appreciated the free meal, such as it was, far more than the $1-2 that I got as a share of the waiter’s tips. In my role, I saw what was left on the tables and they weren’t getting rich either. Sometimes a cook would make extra food for staff so that was a real treat. Camaraderie was a thing.

    2. John Wright

      There can be a tax difference when the tip is rolled into the price of the meal.

      Restaurant meals in CA are taxed, and it is approaching 10% (9.5%) in my area of Northern CA.

      A tip rolled into the prices has the customer paying sales tax on the tip itself, so a $10 tip costs the customer $11.

  2. Randall Flagg

    Tipping at restaurants and bars, taxis, etc., etc. Slide a 20. to the guys that just unloaded something huge and brought it in, up a set of stairs, whatever, I get that completely, at the moment it’s the norm.

    The thing that’s amazing to me is that now I go into I don’t know how many small convenience stores and at the check out counter there it is. A jar for tips. For ringing up a coffee and Lifesavers?

    And do you tip at the takeout counter just for a to go order? I mean I have and do, but just curious as to thoughts on it by others.

    1. Jackiebass

      I just got two take out fish fries las night. I didn’t leave a tip. The only one that did much was the cook. I assume they get a fair wage.Tipping has gotten out of control. I think the workers should be paid more and the prices should go up accordingly.I suspect workers like tipping because they can avoid paying income tax on most of their income. What they don’t understand is they are cheating themselves when it comes time to collect SS. The benefit is based on income so a lower income means a smaller benefit. I’m a firm believer a business should pay their workers enough so tipping is unnecessary.

      1. Lex

        They only avoid taxes on tips if the tip is in cash. There are ways to undercount cashless tip transactions but not eliminate the taxes.

    2. Yves Smith Post author

      In airports, I want to tip when I get coffee but there never is a tip jar. Admittedly some places don’t take cash. But I’ve asked or tried at some of the ones that do and the response often is that it’s not allowed in that airport (!!!!).

      1. Louis Fyne

        —But I’ve asked or tried at some of the ones that do and the response often is that it’s not allowed in that airport (!!!!).—

        If it is/was a Starbucks or other national chain, the location likely is licensed-franchised by Aramark (or another institutional food service provider). And HQ policy likely stopped the employees from putting out a tip jar at that airport.

        1. Yves Smith Post author

          I avoid Starbucks but one instance was “no other option” in PWM and they blamed the airport. However, ATL has many local or at most regional coffee/munchie providers in the airport and many (I don’t recall if all) forbid tips. Was not able to ascertain there if airport or not.

          Oh, LGA forbids tips to wheelchair pushers! The barmy theory is they might press passengers for tips, which I never never never had happen. They are afraid to get caught on the many cameras. So you have to tip them outside or in the entrance to bathrooms.

    3. Lexx

      As a former waitress, I never tip for take-out or to-go. There is no ‘hospitality’ involved except that which you brought with you. You placed the order, you picked it up and transported it home, and then you served yourself, bussed the table, and did the dishes. If dessert followed, you probably provided that too.

      Back in my day, cooks made three times the wage per hour that I did, so our employers took car of them. The waitstaff had to hustle out front for their wages in tips. I think minimum wage then was $2.15 an hour.

      Yesterday I went to Walgreens to buy our dog some Dramamine. At the cash register I had to answer twice whether I wanted to make a contribution to this and that, and did I want their credit card, and only then was I allowed to pay and leave with the Dramamine. This is really starting to burn my biscuits. I’m half expecting a mechanical arm to reach out, grab me by the leg and turn me upside down to shake every last dime out of my pockets in case I was holding out any cash they missed. Shopping for anything at all, no matter how small, has become a constant corporate shakedown. It reminds me of another experience though it’s been many years since I was in one… a casino. The casino is no longer a destination we choose; the casino has come to us and it wants everything we have.

      1. Louis Fyne

        I’ve seen checkout lines with ad hoc signs (probably made by the store manager) that said to the effect “please don’t be mad at the cashier for asking you to make a charity donation”

      2. Oh

        Why are these companies collecting for some charity or the other. If I want to give I’d rather give directly. I was asked the same when I was buying something at Macys’, this time for fighting breast cancer. I refused and told the cashier that maybe 50% goes to the real cause. He corrected me – he said “try 10%. The middlemen lop off most of the donations.

        Regarding Walgreens, it looks like they’re going broke. There are less and less items on their shelves and the check out people are not trained to use the register and don’t know how to tear off the instant savings coupon from a product when checking it out. And Walgreens collects data on you just like Kroger.

      3. lyman alpha blob

        Former waiter, and I generally do tip for takeout, although not at the rate I would for table service if the order is more than $20 or so. When I was a waiter, at some restaurants a portion of the front of house tips would make their way back to the kitchen staff. And while they did get paid more than waiters in hourly wage, they were taxed on all of it while waiters weren’t taxed on all their tips. I’d estimate waitrons probably took home 2-3 times what the line cooks made. So my rationale for takeout tipping is that hopefully some of it will make its way to the kitchen.

        That being said, I also generally pay in cash and much prefer dropping a few bucks into the tip jar than having a tablet thrust at me with a large suggested tip displayed on the screen while the counter person watches. But I’d still prefer a system where we pay people enough to live on without tipping required. Until that happens though, I will continue to tip since nobody’s getting rich doing restaurant work, and they’re often being raked over the coals. It’s hard physical work, often with no benefits.

        I always tipped cabbies generously too. They aren’t getting rich either, and it can be a dangerous job. A favorite thing to do was offer a flat rate to a cabbie for a quick ride if they turned off their meter, which they would always accept. If it would have been about a $10 ride on the meter, I’d offer them a little more than that. With the meter off, they were still making money from me while waiting for the dispatcher to call in a new fare, which would have otherwise been unpaid time. Had they turned on the meter, the dispatcher would have sent the next call to another cabbie. Cabbie gets to make some extra money, and I get a slightly cheaper ride than I would have otherwise, especially if some traffic shows up along the ride. Win win!

        Don’t even get me started about the cashiers begging for this or that contribution at corporate chains. It’s degrading for the cashiers who aren’t getting paid enough and the practice needs to be killed with fire. Perhaps by using those corporate hotshots who came up with the idea but don’t have to perform the begging themselves as fuel.

        1. Petter

          Former waiter here too. Got out before my thirties but had waiting on tables nightmares well into my fifties. What about you? Ever have them?

      4. maps

        As a current waiter, I can tell you that you should tip for take out. The raging trend in take-out fueled by apps has massively increased the stress and difficulty of working in a restaurant. For example, on Valentine’s Day, my restaurant did $7,000 of take-out on top of over 400 covers coming through for sit down. Even though we had turned off the apps, they still kept sending through orders, decimating our ticket times (to over an hour and 15). The take-out apps are frequently buggy and don’t shut-off when they are programmed to do so. The hosts are under paid and usually dealing with the take-out orders and keep the tips associated with it. While it might not feel like people are getting a “service” and should not therefore tip, you are still using the wait staff and slowing down the kitchen off-balancing the flow of the restaurant; when take-out orders are high, my tips go down because my ticket times go up. Take-out customers are frequently difficult and treat the wait staff poorly, and act entitled. It may not be liked or thought to be earned, but it is earned and now considered standard. Additionally, most tips are counted, those days of cash tips are over, as almost everything is payed for with a card now. Cash tips are a rarity.

        There are many things wrong with the restaurant industry, but the wave of take-out is absolutely frustrating and stressful for the entire restaurant. If you don’t feel that you need to tip for take-out, I respectfully ask that you cook for yourself and stop stiffing the workers. I can assure you that the last few years of restaurant work are unlike anything you ever formerly experienced, as the industry has changed massively. Not tipping for take-out is as bad as not tipping for service.

        1. Lexx

          Oooo, that had a lot grrrrr! in it, so I’ll reply.

          I can count on two hands the number of times in a year we dine out, often in a brew pub while we play gin. On one hand the number of times one of us fetches take-out. Why? I cook rather well. We eat out when I want someone else to cook and they’re better at those dishes than I am, involving ingredients I don’t keep in my kitchen and pantry and don’t want to.

          If the service is good and it almost always is, we tip generously in cash we place in their hands. Sometimes cash tips go sideways and we would feel bad if that waitperson thought we’d stiffed them.

          At the end of year I’ll start to buy gift cards (to grocery stores and restaurants) and gather twenties to use as tips to all UPS/FedEx/and especially, Amazon drivers, if they’ll stay still long enough for us catch them in the act and hand it to them. Like Old Saint Nick, those folks are gone in the blink of an eye!

          Any of your patrons walking in with gift cards? You’d think since the meal was already paid for they’d leave a nice cash tip. Pay it forward. Take care of people who take care of you.

          It’s a yogurt morning. Breakfast this morning is homemade yogurt, with spoon of low-sugar homemade jam, topped with fruit and homemade granola. I think the standards of service look different to those who do most things themselves, than to those who aren’t confident with tools except maybe their phones. One of reasons we avoid sit-down restaurants now are that ‘families’ have taken them over and they’re a bunch of heathens and I don’t just mean the kids.

          Also, we hate Square. Cash only.

        2. peter

          The thing I always wonder about is, do the restaurant staff ever get a tip from the apps?

          I usually tip for take out, often times too much 18-20% but from an economics standpoint tipping is wrong because it offsets costs onto the customer toward owner profit.

        3. Chris

          How much would a restaurant owner be willing pay per hour to compensate for a server’s lost tips? For me, as former server, that would be the critical question. From my experience working in over a dozen restaurants over 25 years, servers usually work fewer than 8 hours a shift. Typically, in a dinner house, they work roughly a 6-hour shift. If a restaurant owner pays them $15 an hour, that comes to $90 a shift sans tips. Now it’s not unusual for servers to average $1,200 or more in sales in a successful dinner house. If the server averages 15% in tips, that comes to $180, apart from his/her hourly wage. In most cases, at the end of their shift, the server will tip out a total of around 20% to bussers and back-of-the-house workers. $180 minus $36 leaves a total earnings of $144 (again, apart from hourly wage). Given the scenario I just described, I’d rather stick with tips.

          1. maps

            In my area, we get a $13.50 minimum wage, and at my restaurant we tip out bar 10%, wait assist 15%, and the restaurant automatically subtracts 3.1%. All of the restaurants here that do a “living wage” can’t keep waiters even though they give a higher minimum, $18-22 p/h and usually do a 21% service charge on the bill, and then split it between foh and boh so the servers end up with 7%. The restaurant that my partner works does the service charge, but they also have a tip line, and she regularly does $3000 in sales. The owners illegally force the servers to pool tips and when the servers tried to get it changed, they threatened to take the tip option away. Without tips, no one will work foh at a restaurant.

      5. Mildred Montana

        I’ve got a soft spot in my heart for delivery drivers. On the rare occasions I have something delivered, I tip them generously. Even though there’s not much personal interaction, I can’t help but think of their vehicle expenses.

      6. Yves Smith Post author

        A big scam is, particularly for food donations at grocers, they take your $ and buy their own inventory to provide to the charity. The only one I trusted and ever gave to was D’Agostino, a NYC family owned chain that does a 2 week “round up to nearest dollar” IIRC in Feb. They give the $ to a food service I support, CityMeals on Wheels. I believe some D’Ag managers also volunteer time to CityMeals (I perhaps naively believe not coerced, D’Ag seems like an old-fashioned somewhat paternalistic employer. Employees in stores didn’t seem beaten down as you see some other places, and no corporate cheer a la Starbucks).

        1. Kurtismayfield

          Yes, and then they all use the money that you donate as a tax deduction. It drives me nuts that they are asking me to give money so they get taxed less.

  3. John R Moffett

    It is an insidious way of making your prices look better than they are, while also making your employees grovel for half or more of their wages. A very American flavor of hospitality capitalism.

    1. Chris

      Working as a server, I never groveled for my tips. And I would be very surprised if my boss could pay me as much as I earned in tips–let’s say $30 (or more) an hour.

  4. Jack

    This article reminds me of the historian Walter McDougall’s statement that, “From the beginning, America has been a nation of hustlers.” Most Americans can’t accept anyone standing in their way to make an extra buck. Or, that anyone would receive anything that they do not receive as well. I think tipping falls into that paradigm, in that most patrons like the feeling of power by being able to hold a tip over a servers head, and the server has the ability to possibly put some extra money in their pocket. Heaven forbid that we have a society where everyone gets a fair wage and we work together for the betterment of our society as a whole.

    1. jobs

      Agreed. Ultimately, US tipping is a cultural problem, not an economic one. That is why it’s so hard to change.

    2. earthling

      Not disagreeing with your point, but I don’t accept that we are a nation of hustlers, or began that way. Historian McDougall perhaps didn’t spent much time studying Midwest farmers, or teachers, or nurses, or cops, or WW soldiers, etc. There have always been land speculators, promoters, hustlers, but they have NEVER amounted to “most Americans” and certainly not in the first couple centuries of the US.

      Sick of this normalization of grifting we have today, but to suggest it’s always been that way is just plain seeing the past in a mirror distorted by today’s thinking.

  5. JohnnyGL

    I found yves’s example of the restaurant led initiative to get rid of tipping admirable, but we as customers and workers always assume the owners are up to no good, even when they’re trying to do the right thing. That’s life in a low-trust society.

    We’re just going to have to do this legislatively. People do generally follow laws. Get rid of tipped min wage at state level and tipping culture will slowly die out.

    Here is true-blue MA, shortages of low wage workers are really pushing up market wages.

  6. The Rev Kev

    Dug a bit into the history of tipping in the US and it seems to have started in the middle of the 19th century. There seems to be some sort of consensus that ‘its spread was linked to the racial oppression of the post-Civil War Reconstruction period.’ Whether that is true or not I have no idea but a thought did occur to me. Perhaps after WW2 with a booming economy, tips could be justified. Workers would actually be getting a living wage and the tip on top of that was a sort of thank you. But now half a century later that living wage is now a joke and the minimum wage went into the freezer under Obama. So that tip is now a vital part of those worker’s wages that actually make it a living wage. And now you have an imbalance between customers and workers over tips/wages when the real problem is the fact that livable wages went down the gurgler-


    1. Cetra Ess

      I have a feeling the history of tipping aligns to cultural stigmas around money. Decades ago I accidentally discovered tipping in the UK was culturally taboo – my tip laid all night on the bar, untouched by anyone, which in itself is somewhat impressive – a long line of people in various states of sobriety passed it but not even thieves would take the unclaimed free beer money. I returned to my table and was informed by my hosts this would happen, also that in the UK you tip in a roundabout way, by offering the server a half pint, and this is discreetly deducted from your bill. I was also told this is because the Brits are squeamish and embarassed by money, it’s considered something to be ashamed of or hidden, not shown in the open, even discussed in indirect ways (e.g. “there’s the matter of settling accounts”).

      So what happened to this baggage, where did it disappear to, when puritanical Brits invaded the US, how did they go from having this squeamishness around money to becoming something akin to Ferengis?

      1. eg

        It wasn’t just Brits, though, who conducted the American invasion — there were Scots-Irish, Germans, Dutch and a smattering of other Europeans in the van as well, eh?

  7. digi_owl

    Again and again these days i find myself thinking that USA is the nation where obsolete customs go to ruminate.

  8. DJG, Reality Czar

    I am still getting a strong whiff that tipping in the U.S. derives from slavery and from “proper treatment” of servants. It is one more bad power dynamic enshrined in U.S. culture.

    The article surprised me in stating that tipping is now 18 to 25 percent. Not so long ago, tips hovered round 15 percent. As always at restaurants, the customer is forced to shoulder the owner’s responsibilities.

    I note that the restaurateur mentioned entrées of $30 plus. We are talking a certain kind of restaurant here, where pay could be better than minimum wage. I am losing sympathy, if I ever had it, for “luxury” restaurateurs and their travails. And as for coffeehouse chains and their inability to pay–let’s just shut them down, eh? Starbucks caffè macchiato is already a crime against common sense.

    It occurs to me that tipping in restaurants is maintained by restaurateurs so as to force the staff to be submissive. It solves a financial problem for owners and an HR problem–less insubordination, I s’pose. It is part of the forced cheerfulness of U.S. dining, which isn’t always hospitable or, for that matter, tasty. Here in the Undisclosed Region of Italy, no waiter or waitress introduces him/herself. It would be absurd.

    On the other hand, if tipping can be dismantled, the one group who should still get tips is housekeepers at motels / hotels. It is a horrible job (if you ever get a chance to listen to them). Yet they know full well who is in each room and are keeping an eye on you.

    1. Louis Fyne

      —The article surprised me in stating that tipping is now 18 to 25 percent. Not so long ago, tips hovered round 15 percent.—

      IMO, the article is flat out wrong on that part.

      Historically, it’s 15% on the pre-tax bill for good service. >20% of the pre-tax bill for excellent service.

      I guess that I didn’t receive the memo when the rules changed.

      “Taxi and rideshare drivers also expect tips”

      talk to any Uber or taxi driver, and they’ll tell you—–younger (say under 30) riders never tip.

      1. Michael

        “”Historically, it’s 15% on the pre-tax bill for good service””
        My FIL would never tip on alcohol either. Markup is 500% on basic wine!

        But I never hear the elephant in the room roar: Commercial rents are too damn high! Pay NNN and inflation in services and taxes is rampant on top of rent escalators.

        1. maps

          The mark-up is large, but restaurants get wine that you generally have no access to and everything you have ever bought anywhere is marked up from cost.

      2. Keith Newman

        During Covid the restaurants I liked shut down, some permanently. The waiters and cooks found jobs elsewhere. While I don’t eat out often I do like to do so occasionally. To encourage restaurant staff to stay I began giving 20-25% tips (15% pre-Covid). I have continued with the more generous tips now that everything has reopened and Covid is largely being ignored.

    2. Yves Smith Post author

      Not just slavery. Also indentured servitude. My Mayflower ancestors (7 or 11 out of the 110 who survived the 7 very well documented with church records and grave markers) were either indentured servants to pay for their passage or ship crew. No Puritans. I believe many of the Irish who came later were also indentured servants, reinforcing their second class/then not white status.

        1. JBird4049

          It was not just skin color, but nationality and culture as well. WASPs White Anglo Saxon Prostestant. The English, French, Scandinavians, and Germans were White. The mainly Catholic and Orthodox Christian Slavs, Spanish, Italians, and Greeks were not. The conquered and colonized, Catholic and Gaelic Irish were barely considered human by large numbers of the English. Perhaps, maybe slightly above Black Africans. White chimpanzees was one of the labels.

          This is probably the reason why so many Irish were starve to death. This is also why those No Irish Need Apply or No Dogs or Irish Allowed signs existed. Makes me wonder how my Bostonian ancestors handle it. Feels kinda funny thinking that I might have difficulty being thought of as being white and much of my family definitely would not have been considered so. And most of us are truly pale.

          The status of being White starting expanding in the late 19th century over decades to include the various nationalities going in order from west to east and north to south. The Irish sometime in the early 20th century, then the Slavs, Greeks, and finally Italians in the early 60s. Hispanics from the Rio Grande southward have slowly been included starting by the 70s maybe. Argentinians and Chileans probably in the 1940s or 50s.

          It’s whacked. It’s crazy. It isn’t logical, but it is fascinating.

      1. eg

        This “feature” of the American colonial adventure is examined thoroughly in Nancy Isenberg’s White Trash: The 400-Year Untold History of Class in America

    3. hunkerdown

      Tipping conditions servility, Skinner-style. It is a capitalistic approach to reproducing “manners” culture by deputizing patrons as temporary masters. Graeber wrote about the origins of manners culture and the notion of service having educational value in itself; I embarrassingly still have yet to read Bullshit Jobs where I hope he will have made the connection.

  9. Lex

    I’ve never lived off of tips but I spent plenty of time adjacent to tip dependent workers in the restaurant and bar industry. In some cases workers can do far better than a paycheck with tips, but it’s so variable and unpredictable. I tip pretty heavily in many cases only as an act of solidarity with the modern working class. I know first hand how shitty their jobs are and how underpaid everyone from the dishwasher to the waitstaff to even the manager is.

    But I also refuse to treat servers like servants. The tip will only be adjusted down in the event of extremely poor service, which is rare if you treat the server like a human. I’d be happy to live in a tipless society because it is dehumanizing for those reliant on tips. That’s on top of working in an industry that rarely provides benefits like health insurance or retirement, gives schedules that are in constant flux, makes income dependent on business revenue (you may need to make rent but if the restaurant is slow you’ll get cut), and a handful of other Dickensian business practices.

  10. Carolinian

    There’s a new documentary on the Horn and Hardart Automats and various former New Yorkers like Mel Brooks talk about how much they loved it while growing up poor–one big attraction being no tipping. I do think tipping can be a system where, to paraphrase the old Soviet Union, the wait staff pretend to be friendly and we pretend to be grateful. In other words pro forma.

    And for the upper crust a system that favors restaurant owners and chefs rather than the galley slaves is attractive. When the District of Columbia–one of our richest areas–wanted to pass a local minimum wage they made sure it only applied to big businesses like Walmart and not to small businesses like the restaurants where they like to schmooze.

    1. Wukchumni

      One thing you’d see in the old country back in the day was occasionally women attendants outside of a man’s place of business, where it was seemingly the one place you got hounded for ad hoc tips, the other tipping system across Europe already figured into the bill, only amateurish Americans left a Pfennig more.

      Much as i’d like to get rid of the tipping part, its getting even more out of control.

      The outfitter we use on our Colorado River kayak trips informed that a mandatory 10% tip is now padded onto the regular cost, and frankly have no issue with that as we were used to tipping that much for the hard work the outfitter does, but now they’re using the tip as a cudgel of sorts for both keeping those that drive the vans and trailers employed and a not so hidden inflationary measure.

      A $!00 gig a few years ago thats now $150, and so it goes in the new economy where you watch prices go up in a couple years that would’ve taken 20 years in the past.

  11. JE McKellar

    I work at a restaurant, and receive most of my pay in tips. There are a few practical issues that get left out i articles like this:

    1. Tips are like a sales commission or piece-rate: Restaurants get really busy for a only a few hours a day, so most of the work has to be done quickly in those few hours. Those times can be stressful, so it only makes sense for workers to get paid for doing more work. Otherwise there would be no reason to work the hard shifts or work extra hard during the rush. The cooks are under the same sort of stress, but they get their hours doing prep or cleanup, while servers are sent home as soon as the business stops.

    2. Tipping didn’t come from slavery, but from the triangle-relationship between host, guest, and servants. Read any Jane Austen or P.G. Wodehouse, and you’ll see tips mentioned here and there. Basically, the host hires servants and negotiates a wage with them, and then the host invites guests to stay at their house. The guests then have to ask the servants to run errands or for anything else they may need. The servants don’t work for the guests, they work for the host, so tipping covers that third leg of the relationship triangle.
    In modern US restaurants, this translates into the conflict between the business owners and the patrons over what actually shows up on the bill. If the owners had their way, every slice of lemon, every cracker, every napkin would be rung up. Tipped servers will generally give away for free anything they reasonably can, and will fight for a comp or void with the managers before the patron ever sees a bill. Get rid of tipping, the servers will only be paid by the owners, and only the owner’s interests will be fought for.

    3. Tipped servers can make a decent living, and that living is granted to them by the kindness of their patrons. It’s a bit of pro-social gift economy in a world run by crushing economic exploitation. I used to teach college, but my pay as an adjunct didn’t cover my student loans, but my tipped income did. The real proof is in the restaurants themselves: the line cooks work harder and in worse conditions than the servers, and they make a pittance for it, because every dime on their paycheck has to be wrung from the fingers of the tight-fisted business owner, who’s also struggling to keep the business from going under. Owners want a piece of the tip pool to help pay the cooks, but inevitably that money will go to pay rising rent, swipe fees, and debt service.

    I don’t know how restaurants work in other countries, but I assume a living minimum wage and a less predatory FIRE sector make tips unnecessary.

    1. Karen’s hubby

      The crucial question you didn’t address is does tipping increase the quality of service?
      I would say overall no.
      When you work in a restaurant, first thing you learn is identify people who don’t tip well. You get a flair for it. We know Europeans don’t tip well so sometimes no one wants to take their table, forget about the service. Same with regular customers who don’t tip or are difficult, maybe read some Anthony Bourdain, what he says is not fiction about the nasty stuff in the kitchen. Then those who do too much to earn a tip ruining the experience for many restaurant goers. Not everyone appreciate the servers being so friendly making themselves the center of the event.

  12. Mildred Montana

    >”Even worse, restaurant patrons apparently greatly value their ability to reward and punish service staff. New York City restauranteur Danny Meyer, of Union Square Cafe, Gramercy Tavern and later Shake Shack fame, set out to end tipping across his empire. Some customers resisted…”

    I would be one of the resisters. I worked in the service industry thirty years ago (pre-internet). I took the trouble, prior to my shift, to find out what events were happening in town and where things like popular venues, restaurants, hotels, etc. were located. For my extra effort I was usually rewarded with a generous tip. So why should another employee who just showed up and went through the motions (“Duh, sorry, can’t help ya there.” have earned as much as I did?

    Things have changed of course with the advent of phones. People can usually get the answers to their questions from Google. But the server can still go the extra mile by being friendly and curious. “Hi folks, where ya from?” or some such. A simple inquiry like that can often go in interesting directions and lead to a pleasant time for the customers. The server who cares about his or her customers should be paid commensurately. It’s called the “service” industry for a reason.

    1. Revenant

      From a European perspective, I don’t want the waiter to be my friend, and I should very much hope he doesn’t want to be mine. I don’t want to know his name or hear his opinions unless they are about the menu or the wine list and I sought them. We may exchange some words of wit or kindness as small talk along the way but I just want him to orchestrate the meal efficiently and with dignity and not in servile anxiety. The American concept of “service” is ghastly – and never a patch on the untipped Japanese version. The problem in America is that serving others is a job and not a way of living.

      1. Respect is a two-way street

        Hear, hear. All of your points re: the intercourse between diner and waiter are well taken. Of course, one must be polite to staff. However, I’m afraid Mildred’s server who says ‘Hi folks, where ya from?’ would immediately put my needle in the red, as a totally unacceptable level of informality. ‘Folks’? And for someone I’ve never met before who is working a job where I am the customer to call me ‘ya’ is just wrong, IMNSHO.

        Of course, from a European perspective, most North Americans have difficulty (or simply can’t be bothered) in adjusting their register to a situationally appropriate pitch. Some visitors find this ‘friendly’, even ‘charming’. But when, for example, I have to show ID somewhere in the US or Canada and the person looking at it — younger than my grandson, and again a complete stranger to me — takes the liberty of addressing me by my first name, well, that is simply not on.

        I have to say, though, that your last sentence is problematic for me, or at least ambiguous. I don’t think anyone should have to live a life where serving others is their way of living. That conjures up images of forelock-tugging. On the other hand, Chairman Mao did say ‘Serve the people’ so I suppose there is that other interpretation to be considered.

        1. Revenant

          It was meant in a Maoist way. Or simple an old school Christian “life of service [to others / God]” way. Hell (and so presumably Heaven) is other people.

  13. skk

    In California ( and 2 or 3 other states), the minimum untipped wage for tipped workers is 15.50, the state minimum wage level, not that much lower hourly rate allowed by law in other states. IMO, most people here, quite rightly disregard that and tip anyway thus raising their hourly rate somewhat above minimum wage. Phasing out tipping wouldn’t be so helpful to Cali wait stuff – they’d need to think this out carefully.

    Mind you, it makes me think about tipping at much higher rates when I’m in states like Alabama, Georgia, the Carolinas, Texas. Here’s the list:

    1. JBird4049

      Yes, two dollars and change in a job that gets tips, with the owners often shorting the employees on their tips. There is no where in the United States that this is a living wage. It has been true for decades.

  14. Bill

    I am not American and I do not agree with the expectation to give a tip, as you say with the Australian taxi driver. A tip should never be part of someone’s wages as the employer should be paying sufficient wages for a person to work and live on. The price of the food or drink on the menu should be the price I pay total- no extra. Having working as a bar man it is nice to get a tip as it shows that someone appreciated your efforts, but having watched other bar staff going out of their way to get tips was insulting. I think it is insulting to the customer to con someone into a place with below cost prices with the expectation that the customer is obliged to give the staff a tip to make up for the price lies on the menu.

  15. Zephyrum

    My daughter is a server at a popular joint in the big city and says she wouldn’t work in a place without tips. She is very serious about her work, makes a lot of money in tips because the patrons appreciate this, and has many coworkers who don’t try hard and don’t get anywhere near the same level of tips.

    The advantage of tips is they provide immediate feedback on the quality of her efforts. In theory she could work for a flat hourly wage, and eventually get recognized for her efforts by the boss, but the feedback path would be so slow she wouldn’t have the motivation to invest so much energy in each customer. And once given a higher wage, she would probably slack off because there would be no consequence.

    There is a big difference in the customer experience when the workers are intensively trying to do a great job, rather than just do an ordinary job. At peak times this takes a huge amount of effort. Without tips, what is the incentive to invest the extra energy, when your coworkers are just kind of coasting and getting the same rewards? Seems like a prescription for the least common denominator.

  16. Bsn

    I have 2 comments. 1: my impression is that tipping in general started in Medieval times times, Europe. There weren’t restos per se, but drinking establishments that would have a few nibbles: bread, some meat, etc. People would put some coin in a can and shake it to get the attention of the patron and “To Insure Promptness”.
    Secondly, as a street musician for many years, the best “tip” I got was on the Via Maggio bridge in Firenze. Late (2:00 a.m.) I was playing on the bridge, practicing actually. A man stood in the distance for quite a while, dressed to the nines (where did that expression come from?). So I slowly morphed into “songs”. The man slowly approached and as he walked by, didn’t say anything, just slipped a bunch of Lira into my pocket – about $75 dollars worth – for what it’s worth.

  17. CanCyn

    I always enjoyed eating out at a nice restaurant but more and more find myself reluctant to be waited on by people who can’t afford the food and drink that they’re serving me. I never do facials or spa treatments anymore for the same reason. My hair dresser owns the business and I know she does well. I don’t tip her but do buy her a lovely bottle of wine for Christmas. This feeling of exploiting low wage workers started pre-pandemic and has only become more solidified these past few years and virtually no restaurant dining. Seems to me that minimum wage still isn’t enough of a wage to preclude all tipping. Do these no tip places have health care and pension plans for their employees? I think in most fine dining establishments, the waitstaff earn far more in tips than minimum wage, it is no wonder they don’t want to work in no tip restaurants. In my youth I had a roommate who worked in fine dining. She lived off her tips, the restaurant bookkeeper would call her to remind her to cash her pay cheques!
    Last point, beware the central tip jar. We used to go to a little Vietnamese place where you paid at a desk near the door on your way out, there was a tip jar there. A friend’s son knew someone who worked there. The owners just kept the tip jar money, it wasn’t shared out to any of the staff!
    Bottom line for me – It is wrong for people anywhere to be earning less than a living wage and my current solution is to try as much as possible not to support those businesses. And I am becoming more and more of a hermit because of that avoidance.

  18. Karen's hubby

    I have been a bartender for the last 8 years and still am.
    The idea that bartenders are not well paid is not always true.
    If you work in a nice place, you can make a lot of money.
    I dont know where they find this data that minimum wage is $7, here in SoCal no one I know works for less then $25 per hour plus tips.
    Add to this food, which I dont have to spend money on as I eat at the work place.
    I work in a rather high end place I would say and I used to regularly make $140k to $160k a year pre-covid tips included , last year was the best ever I cleared $230k and it has never been better.
    This year looks similar if not better than the last so far.
    My coworkers make also the same more or less and we have difficulty finding people to work, by this I mean people who will not quit after 3 to 6 months.
    I could write a book on tips but in my opinion it is but a way to scam the customers by appealing to their sense of vanity and shame in the same way as luxury brands do.
    I am a direct beneficiary of this but when I hear that the profession can barely get by, it makes me laugh.
    Like all other professions 20% of the people get 80% of the income.

  19. Dick Swenson

    Are “bonuses” given to sales people and to the generally over paid C-suite executives consider “tips?”

  20. willem

    I once had an interesting conversation with friend in Taipei, Taiwan, where tipping service people is not the cultural norm. His perspective was that tipping unfairly placed the onus for enforcing good service on the customer, rather than on the worker’s management, whose job it rightfully is.

  21. Tinky

    I worked as waiter for a number of years (in the ’80s), and made a comfortable living off of tips. In my view, the elimination of tips would necessarily result in lower quality service from many servers, who would understandably lose at least some of their incentive to provide exceptional service.

    1. Wukchumni

      When I was in NZ & Aussie with a strict no tipping culture in the 1980’s it wasn’t as if I received crummy service in restaurants, but then again tipping had never existed there.

  22. Don

    Much of this conversation is at odds with my industry background. For what it’s worth, my experience is that servers in mid- to high end, well-run places with good food, like Karen’s Hubby above, can make pretty big bucks in tips — more than $200,000 per year, say $250,000 all in (often much more than the risk-taking chef-owners of stand-alone independent establishments make) is far from unheard of. Granted, these people, are generally attractive, fit, well turned out, gracious, smart and well educated. Before you roll your eyes over the social implications of attractiveness, reflect on the importance of these attributes in any chosen occupation — tall, fit, attractive people (male or female) significantly out-earn those who are not, whatever they do and wherever they might work. And these are not easy jobs: Good servers spend time and money staying fit, dressing and prepping for their shifts, and they work their butts off — it’s a hard job, and many just can’t handle it.

    1. El Slobbo

      In this way it makes sense to see waitressing as a sales position, on commission. To make $200,000 a year, assuming you work 200 days a year that comes out to $1,000 per shift. Assuming average tips of 20%, this means you’re selling $5,000 of food and drinks every shift, consistently.
      There is a significant niche for beautiful young, charismatic people in this kind of position. But I would say it’s far beyond the reach of the median wage worker in this industry.

      1. Don

        I think that most employees work more than 200 days per year, but that’s a quibble — I completely agree with you; $200,000 is way more than the average server earns.

        I was making an observation based on industry experience, not taking a position on tipping, and I most definitely was not suggesting that a server making $200,000+ per year is overpaid.

  23. witters

    I think US tipping makes the commercial relationship involved a (supposed) matter of personal morality, thereby covering up that thing Marx managed to notice, but many (who claim to have read him) never do.

  24. PE Bird

    If the public is accustomed to paying X+10-20% and the 10-20% goes away, you think prices won’t increase to fill the “savings”?

    The restaurants will take the 10-20% and give the workers 5%.

  25. MichaelSF

    FWIW, my father lived in Las Vegas (shudder!) and once mentioned to me that the local IRS office could make a very good estimate of tip income once they knew what the job was and at what casino/hotel/restaurant the wage earner worked, so not reporting significant amounts of tips could be somewhat fraught with peril.

    One summer when I was at university I worked with a gentleman who’d retired from a career as a florist in NYC. I remember him telling me that he had to tip everyone — no tip to the doorman/super meant you couldn’t get in to deliver the flowers. I think there was also a tip to the cop/parking control officer so he could double park/avoid feeding the meter to make a delivery. According to him, everyone had their hand out and it could be risky if you ignored it.

  26. ian

    One thing I have struggled to understand (and a pet peeve): the ‘suggested tips’ when you ring up a credit card. Add to this the use of decoy amounts – they want 15%, so 15, 20, 25 and 30% is suggested. It seems like this awful trend has just exploded in the last couple of years.

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