It's Time To Ban Tipping

It's unfair to fob wages off on unwary customers.
Publish date:
August 27, 2015
minimum wage, tipping, Tipping Practice

Another day, another story about a waiter posting a photo of a receipt with something rude written in the tip line. The Internet buzzes with lots of angry commentary about stiffing food service workers, lots of former and current restaurant employees rage about what it feels like to get stiffed on a tip, and we get caught up in another cycle of arguing about tipping — or defending decisions not to tip, as the case may be.

These are basically the wrong conversations, though. The question shouldn't be whether and how much to tip, but why we haven't banned tipping yet.

Before everyone gets up in arms, some things to know:

1) Yes, I have worked in food service.

2) I always tip over 20 percent.

3) Despite these two things, or perhaps because of them, tipping is a monumentally broken system that we should all be opposing — raging pinko commie queers like me, libertarians, conservatives, moderates, alien life forms, whatever.

Tipping is in theory a way to note that someone has provided particularly good service, but it's become a default. And while many people blame this on pushy service workers, they should really be blaming the system, because it's actually restaurants that are taking advantage of the tipping system by making customers pay the wages of their employees — and neatly avoiding associated taxes and liability. They can keep staff at or near the wait wage — which allows employers to pay subminimum wage as long as employees make up the difference up to minimum wage in tips, and is perfectly legal in most states — in the confidence that patrons will cover their operating expenses.

No other industry works this way. If I visit a bookstore, I don't automatically tack on 20 percent of my purchase to pay my bookseller's wages. I pay the listed price of the book, plus sales tax, in the confidence that the store owner uses sales to pay the wages of booksellers along with other overhead. When I go to the auto body shop, I don't toss the mechanic an extra couple hundred (have you paid for bodywork lately?!) to cover his wages. I trust that her employer compensates her for her professional skills and that the money to do so comes out of the obscene price I pay for fixing the door someone damaged in a parking lot.

Businesses are supposed to be run like this. Customers who need a service come to the business and pay for the service. The business owner collects this income and uses it to pay overhead (utilities, liability insurance, rent, and so forth) along with wages and benefits (when applicable, and more about that in a minute).

Food service is almost exclusively the only industry where this is not the case, where employers expect patrons to directly pay the wages of their employees — in fact, I once went to a restaurant where notes on the tables specifically said this (at which point I turned around and walked out).

Other service industries are picking up on this now too. The beauty industry in particular has normalized tipping for hairdressers, massage therapists, and other personal care providers — many of whom are radically underpaid for their work.

Relying on your customers to pay the wages of your employees is BS, and it's bad for employees and customers alike. It's also seriously shady in terms of taking responsibility for employment taxes — if you're paying a wait wage, that's a dramatically lower tax liability than if you're paying even minimum wage. (Which is one reason restaurants do it.) And you can damn well bet that when people are relying on tips to survive, their employers aren't providing them with paid time off, vacation time, paid sick leave (which is good for everyone, trust me), and health care.

During my travels in Japan, I was reminded by my host that tipping is Not The Done Thing, and it was very liberating for me as a customer wherever I want. Tipping there, in some contexts, is actually kind of offensive, because service people believe that they shouldn't be receiving special attention from customers for... doing their jobs. They get to focus on providing the best service possible without fretting over pay and whether they'll get enough extra income from tips to make a living wage, and I get to focus on enjoying my experience as a customer without stressing out over tipping.

I've been to restaurants here that have banned tipping, something that seems alien to many guests, but delightful to me. They've raised their prices slightly (it doesn't actually take much) to cover the costs of raising wages for their employees, and some also provide benefits to reduce economic stress too (in San Francisco, some restaurants actually add a surcharge amounting to a percentage of the bill to cover health care mandated under Healthy San Francisco). The experience has been better for all of us. My waiter doesn't need to obsequiously pander to me in the hopes of bringing in that tip — an experience I know firsthand as painfully humiliating and awkward — I get to enjoy my food, and restaurants get to enjoy a reputation for excellent service and pleasant dining experiences.

Minimum wages are going up, and there's a huge push to keep up that trend. Which is a really good thing, because no one should be paid less than needed to survive — we need to seriously question a world in which people have to work multiple jobs and slog to cover basic living expenses. Notably, fine dining restaurants have already started banning tips, and this could serve as a prompt for their lesser cousins to follow suit. For them, of course, there's an incentive to not make guests who are already paying an inflated markup for fancy food feel uncomfortable by being confronted by the humanity of their staff, but it also allows talented waitstaffs (yes, being a server is about more than just carrying a plate of food to a table) to do what they do best: Their work.

In the service industry, tipping is turning into a form of expected charity. We already know that charity models don't work in terms of financial and social sustainability, and that people benefit from financial independence through increases in minimum wages and better social services. Using charity to pay wages is nothing short of obscene.

Increases in prices for food also mean better benefits, which also results in better service, and when people are making fair wages and not worrying about how to pay for health care or what to do when they can't work for a few days, they're not relying on government services like Medicaid or the Supplementary Nutrition Assistance Program. Such benefits, notably, don't have to come through employers — when restaurants are actually taking responsibility for employment taxes and related costs, that creates more discretionary funding for governments to pay for things like a national health service, reducing burdens on employers and individuals alike.

A society emancipated from tips by virtue of paying employees well is one that's more fair and just for everyone, and it's notable that the U.S. stands out among Western nations as one of the few where tipping is still expected. In travels through various regions of the world, it took me a while to get used to the fact that receipts didn't have a "tip" line and servers looked worried and chased after me with the money I'd left for my tip, thinking that the innocent and confused American couldn't count or had trouble understanding how their currency worked.

Brought out sizzling in the pan. #sedoesjapan

A post shared by s.e. smith (@realsesmith) on

Didn't tip for those gyoza, still one of the best meals of my life.

It's time for the U.S. to join the rest of the world and throw in the towel on tipping. I'd rather pay more for my food and know that people are getting fair wages and treatment than feel obligated to toss money at a cringing waiter.


Images: Chris Potter/Stock Monkeys, Dave Dugdale (CC)