Rethinking the whole tipping thing

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I decided I had enough when I received my bill at one of my favorite Ann Arbor restaurants.

There was the total, and the familiar line for a gratuity — but then something underneath that I had never seen before. “Optional: leave something extra for your hard-working kitchen staff.”

I may not be quoting exactly, but it definitely read “Optional.”

Like Mr. Pink in Reservoir Dogs, I equivocated on the “optional” tip until I rationalized that someone else had bought my dinner, and I was only paying for coffee and dessert.

So this time, I could afford to be generous.

But leaving the restaurant, I had second thoughts.

“Optional” tip for the kitchen staff means that the server’s tip must be mandatory, right?

And I started to rethink this whole tipping thing, especially returning from a recent trip.

It starts with the shuttle from long-term parking to the airport.

The driver gets a couple of bucks for putting my bags in the back of his van and returning them to me.

Then the shuttle driver at the airport, to the rental car office — same thing. Arriving at the hotel, I toss my keys to the valet, another tip.

Tips for the bartenders and restaurant servers.

At the end of the stay, a tip for the housekeeper, and more for the valets. Then reverse the shuttle sequence until I finally get back in my own car.

Don’t get me wrong; these people work hard and deserve to get paid a decent wage.

But why do I tip the shuttle driver, but not the woman who checks me out?

Why should I leave tips for the hotel valets and housekeepers, but not the front desk staff?

It’s gotten to the point where the hospitality industry even prints envelopes to leave in my hotel room for me to tip the housekeeper: why don’t they just pay her more and charge me, rather than expect me to pay part of her salary, like almost every other service I pay for in the course of my day?

This from a guy who has worked many years as a tipped employee and enjoyed walking away at the end of the night with a wad of bills.

That is why servers enjoy the status quo. Their employers also love tips because they can get away paying servers sub-minimum wage, as low as $2.13 per hour for the federal rate. (Twenty-four states have raised that minimum and seven have gotten rid of a two-tiered system entirely.)

But the whole system is fraught with employment law issues, equity concerns and cultural biases. Let me give a personal example.

When I worked as a waiter in a high-end restaurant, I declared all my tips as income, as the law requires. My employer took out the usual payroll taxes and I ended up (in one memorable pay period) with a seventeen cent paycheck.In other words, my customers paid my salary directly except for 17 cents paid by the employer.

It is not a system that incentivizes honest tip reporting. One server was quoted in an article, defending the status quo, as saying “I made $60,000 in tips last year, reported $40,000 — and had a before-tax income of $80,000! That’s why I quit my teaching job.”
Servers’ wages are also inequitable compared to other staff, and it leads to resentment.

There is no reason they should receive so much more than the cooks, the host, the bussers, and those who clean the restaurant at the end of the night.

This is the stark reality, even though many restaurants encourage some degree of sharing or pooling tips.

To summarize so far: tipping permits employers to not pay a living wage, creates inequity among restaurant staff, and tempts widespread tax fraud. What then is so great about the practice?

Not much, says Saru Jayaraman, co-founder and co-director of the Restaurant Opportunities Center United (ROC United) and director of the Food Labor Research Center at the University of California, Berkeley.

She told the New York Times that most restaurant workers are mired in poverty, disproportionately women and minorities who work in family restaurants and chains.

Worse, the restaurant industry is a hotbed of sexual harassment — not just from staff, but by customers who enjoy the power they hold over you as you work for your tip. (Jayaraman quotes a waitress who told the Texas Senate, “‘Senators, what would it be like for you if your income depended on the happiness of the people you serve? Because my income depends on the people I serve, I have to put up with a guy groping by butt every day so I can feed my four year old son every day.’”)

For those to argue that it rewards good service, Brian Palmer for Slate magazine cites evidence that tipping “does not incentivize hard work.

“The factors that correlate most strongly to tip size have virtually nothing to do with the quality of service. Credit card tips are larger than cash tips. Large parties with sizable bills leave disproportionately small tips. We tip servers more if they tell us their names, touch us on the arm, or draw smiley faces on our checks.”

According to Huffington Post, Cornell professor Michael Lynn also found that waitresses with “larger breasts, smaller body sizes and blond hair” tend to earn more tips — and that “white servers are tipped more than black servers for the same quality service, and regardless of the race of the customer.”

The National Restaurant Association (yes, they also use the acronym NRA) maintains that the sky would fall if tipping were abolished.

They believe that customers would refuse to patronize such restaurants, because of sticker shock at high prices, and that service would suffer. But some who have tried the experiment find the opposite is true.

Former restaurant owner Jay Porter told Slate that everything improved after he enforced a mandatory 18 percent service charge — the food, the service, the pay, the customer satisfaction.

In contrast, an analysis done by the think-tank Cato Institute reports that owners of “two pricey San Francisco restaurants, Bar Agricole and Trou Normand, instituted a 10-month trial of a no-tipping policy, higher base wage, and higher menu prices to finance a new living wage, but “returned to tippingin 2016 because server morale crashed and turnover skyrocketed to 70 percent during the trial period.

Why? The company had lowered servers’ de facto hourly wage from a range of $35–$45 to $20–$35.”

There you have it. Despite all the documented problems with tipping, change won’t occur as long as servers and restauranteurs are in cahoots, to allow servers’ wages to be paid by customers, over and above the restaurant tab. (Some would argue we’re further than ever from change, because despite ever-rising restaurant prices, the industry standard has somehow gone from 15 to 20 percent over the past few decades.)

Customers are also to blame for this uneasy alliance.

Many prefer tipping because it gives them the illusion of control over paying for the service they actually received. But their own level of service cannot possibly be influenced by a tip that is paid at the very end of the experience; and a poor tip doesn’t make a server any better the next time, it just gives them a reason to complain to their fellow workers about the jerks on Table 48.

From personal experience, the opposite isn’t true, either. I am a very generous tipper, and I receive consistently mediocre and untrained service from anonymous servers, whose jobs nonetheless turn over faster than a turnstile in a New York City subway station.
And after this article is published, I don’t suspect it will get any better!

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Nick Roumel is a principal with Nacht & Roumel, PC, a firm in Ann Arbor specializing in employment and civil right litigation. He also has many years of varied restaurant and catering experience, has taught Greek cooking classes, and wrote a food/restaurant column for “Current” magazine in Ann Arbor. Follow him at @nickroumel.

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