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Mar 6, 2013 05:15 AM

Tipping in the USA

Comments on another thread brought to mind this question which I have often had on a return from travel abroad and never answered to my satisfaction.

Why can restaurants in other "civilized" countries employ service personnel of good quality, in many cases for years, in a no tip or low tip scenario but here in our fair land the restaurant owners have convinced us that it is not possible?

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  1. I have long hated tipping. I DO tip, but because it's the norm and expected here in Canada. But I've always hated the fact that I need to pay more than I purchased in order to supplement the restaurant owners payroll. A tip should be just that, a VOLUNTARY bonus on top of the bill if service was exceptional, if even that.
    Wait staff should be paid full minimum-wage, or whatever the wages are deemed should be for wait staff, with no expectation that they will be getting more.
    And as opposed to lower tips, poor service would be treated just like poor service in any other environment, via complaints and reprimands.
    I've never understood why wait staff is treated differently.

    1. Because the wait staff is paid over there. Do you think in other "civilized" countries that restos could employ staff at below minimum wages with no tips? Here in the US, the minimum wage for waitstaff is lower than the normal minimum wage based on the expectation that they will receive tips to raise income to at least the minimum wage. Most European countries also provide (or at least many used to) basic healthcare and social services which minimum wage resto jobs in the US don't have (but that is an entirely different discussion not appropriate for CH). If the US resto industry went the way of Europe, prices would be raised to reflect the higher wages and tips would become nominal. You as a diner pay it either way. In theory in the US you can reward/punish good/bad service. In other places, wait staff may be perceived to be more professional as they are paid decent wages and do not rely on tips. Benefits and flaws in both models.

      1 Reply
      1. re: Bkeats

        Canada has the same tipping policies as the US, but we also have the health care and social services of most European countries. So that can't be the explanation.

        Not that I have any ideas that are better than your suggestion. :)

      2. The wage scale for servers 'over there' are very different than the US. In the US, most servers get less than $3.00 per hour and in some states, they only get tips, no wage at all.

        4 Replies
        1. re: treb

          Treb, actually that is part of the point of the question. Why if "they" can survive and profit while offering livable wages can the same not be done in the US?

          1. re: Bacchus101

            Part of the problem is that restaurants can not afford or don't want to pay a full hourly rate. Next, I believe is that waitstaff probably do better on tips vs full wages, especially when it comes to tax filing time. Lastly, incentive to stay and work at an establishment, if you get a fixed wage you may not stick around whereas if you receive great tips, you'll show up and work hard.

            1. re: treb

              I understand that this is the US mentality regarding serving. That if you make individuals directly responsible for their salary (aka their performance will result in tips) - but honestly, I don't buy that career servers are staying in the industry because of tips. At this point I would need to see more than just annecodatal stories or assumptions.

          2. re: treb

            Well that's not totally correct. There are a few states that don't have state minimum wage laws, but they would still be subject to the federal minimum wage law. So essentially, restaurants are subject to the maximum of the state and federal minimum wage where they are operating or risk criminal or civil legal action at either the state or federal level.

            Moreover, when you are talking about a tipped employee making less than $3 under the minimum wage law, you are missing the point about a tip credit. The states that do have a tip credit, as does the federal minimum wage law, force the employer to make sure that the employee makes the minimum wage. The tip credit just allows the employer to credit tips towards meeting the minimum wage goal.

            Moreover, there are a number of states that don't have a tip credit, including California where the minimum wage is $8. San Francisco has an even higher local minimum wage, with no tip credit, at $10.55. The result is that servers at successful restaurants who benefit from a bounty of tips on top of the high minimum wage may make substantially more money than junior kitchen staff, like dishwashers, who may make little more than the minimum wage while working way harder than many of the servers. Anyway, here is the minimum wage chart from the DoL:

            Besides that, there are so many other cultural differences between the US and Europe when it comes to labor. One glaring one is the ability to fire an employee, something that obviously differs by state in the US and by country in Europe. A friend of mine was hired by an Italian financial company after a career as an analyst for a major Wall Street firm. She remarked that while that WS firm could have fired her in a split second if it wanted, it would be an extremely uphill battle for her Italian employers to do so. Is that good or bad? Some of the current economic problems in Southern European countries may suggest that European labor practices are not necessarily a no-brainer good thing.

          3. I believe the level of service provided at restaurants will be around what customers expect, if the laws and conventions in the US were to change to "service charge already included". The reason why I say that, which is contrary to the belief of many people, is because competition doesn't just disappear under such a system. In fact, poor quality of service will become a significant competitive disadvantage, since people who previously may have been able to choose not to tip will now just rather go to a restaurant with a reputation for good service instead. It will force the life or death of the restaurant, not just the individual waiter, to be dependent on the overall quality of service provided by the restaurant.

            So with this belief, I don't think the current US tipping system really exists for the benefits of the customer. However, I believe that the tipping system subtly impacts the economy in that the ceiling is removed for money flowing into the economy when people dine out--especially rich people who might tip a ton, and not just on service but on expensive alcoholic beverages. Whereas under the no-tipping system the up-side of revenue is fixed, under the tipping system it's not. I don't know economics enough to say whether this system is better or not; it's just obvious to me that that's the impact of tipping. It can be significant in a country with high income disparity.

            Like I said, I don't believe it really benefits the customer.

            2 Replies
            1. re: Dio Seijuro

              I grew up in the US, but haven't lived there for years. I currently live in a country with arguably some of the worst restaurant service practices. Tipping is expected, but at 10% and servers do not rely entirely on tips to compensate their wages.

              But - in an environment where midrange restaurants have poor to mediocre service - the restaurants that do make the effort to have really high quality service are known and prized for it. There it is not uncommon to see people tip above 10%. On the other hand, if you don't care about service (for that night or in general) - then there's everywhere else and the places are usually cheaper.

              Sometimes having excellent service at a meal really contributes to the overall experience and is worth the cost. Sometimes it doesn't matter, and if you have to physically chase down the server to get your bill - oh well.

              1. re: Dio Seijuro

                Some extremely interesting thoughts and well thought out considerations. I agree that tipping does not foster good service in that it, in many cases, has become an expectation of the server regardless of service provided and it is also a post service event, thus not effecting your level of service at that particular meal. Benefits to the restaurant owner(low wages) and to the "less than adequate" server(higher income), very infrequently does this translate to the benefit of the customer.

              2. The OP poses an interesting spin to the regular comparisons between America and many other parts of the world in terms of tipping practice.

                Clearly the reason for the high tip rate in America is due to the very low wage rate. By comparison, in most countries I visit and the one where I live, minimum wage is minimum wage. Those countries have a variety of tipping practices, varying from no tip to moderate discretionary tip.

                However, the OP poses the question why American restaurant owners have convinced Americans that it is not possible to change. I'd certainly be interested in seeing responses to that question.

                Prior to the UK introducing a national minimum wage, many companies in the low paid sectors claimed that this would drive them out of business as they would no longer be able to compete. Of course, that proved to be absolute nonsense. If all companies are required to pay the same minimum wage, then there remains the same competition. We now have a growing campaign for employers to pay a "living wage" above minimum wage - it is gaining strength.

                I'd suggest, therefore, that Americans who might wish to alter tipping practice in their country should look to their legislators, rather than their business owners. As someone who was always active in my trade union before I retired, I can say with complete confidence that I have never met an employer who was in favour of paying wages higher than they were obliged to pay.

                Of course, it may just be that Americans think that their current system is a "good thing". Forgive me if I disagree.