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How Tipping Culture Affects Employees and Customers



How do you feel about tipping? The answer to that question is most likely dependent on two major factors.

  1. Do you live in the US or Canada?
  2. Have you ever had a service industry job?

When it comes to tipping, the US is unique in the way it pays many service industry employees. Instead of a tip being something on top of their regular salary, it is something that must supplement a decreased salary. Basically, they make much less than they should, because it’s expected that tips will make up the difference. Is it fair?

Gratuity

In the United States and Canada, tipping may not be required, but it is unquestionably expected. 15-20% of the bill (before tax) for normal to good service, higher if the service is exceptional. It’s even gotten to the point where tipping less than 15%, even for bad service, is considered a social no-no.

Some restaurants will calculate the gratuity into your bill, taking the option out of your hands, but you are still definitely paying it.

In other countries, employees are paid more substantial wages making tipping a completely different animal. It’s something you can do if you want to show special appreciation. In fact, in Japan, tipping is considered an insult.



Potential Change

New York State has proposed getting rid of the tipped wage and making it mandatory to pay all employees the state minimum wage. The idea being, the employees won’t have to be so reliant on tips, and won’t have to worry about not making as much as other minimum wage jobs.

Unsurprisingly there has been quite a bit of pushback to this idea both from those whom you’d expect, and those you might not.

Obviously, employers aren’t thrilled about the idea because they would have to pick up the difference. It would completely upend their pay structure and almost certainly force them to raise their prices to make up the additional cost.

That brings us to the customers, who aren’t jazzed about the plan either. They are the ones who will have to pay the higher prices. Effectively, they will still be supplementing the employee’s wages. They just won’t have a choice anymore.

Finally, we have the employees themselves, who fear that such a plan would cause people to tip less. It’s a valid fear. Especially if the customer feels like they already did their part by paying markedly increased prices.

On the flip side of all this, is the idea that tipping will return to its original function. It will encourage employees to give the best service they can in hopes of getting additional compensation. Moreover, it’s unlikely the social pressure to tip will fade away entirely. In a lot of ways, being a good tipper is a show of status.

On the flip side of that same argument, there is the idea that service employees (in this instance, mostly women) are forced to be willing to put up with behavior they should not have to put up with, in the hopes of getting a good tip. If you take the tipped wage out of the equation, the theory is it gives those workers a fair bit of agency back.

What Do You Think?

Do you tip to show appreciation, or out of obligation? Do you think service professionals should get minimum wage like everyone else, and take some of the onus off of customers, or do you think changing things would be more trouble than it’s worth? Are your tipping practices dependent on service or do you give at least 15% no matter what?

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