Tipping has recently become a topic of much dispute. Over the last few years, a new trend has emerged for compensating service staff: replacing tips with higher hourly wages. While establishments, mainly restaurants, opting for this model believe that this transition will solve a number of issues within the industry, others are not so sure.
So, we’re giving you the facts from both sides of the coin (pun intended) so you can decide for yourself.
Why Tipping Should Be Abolished:
1. Income Inequality.
Tipping creates a wage gap between front of house (servers, bartenders) and back of the house (line cooks, chefs, dishwashers). By tipping your front of house staff, you are only compensating the people who take you order and deliver your food, not those who actually prepare it. If everyone was compensated by hourly pay, there would be less of a discrepancy in pay between the two, making it far fairer.
2. Everywhere else is raising minimum wage and servers are suffering.
The recent increase in national minimum wage standards is offering more money to retail and fast food industries but is not being translated to tipping-based restaurants. Servers are not being compensated equally to the other industries and their average pay is dropping below others.
3. Tipping costs the customer more.
On top of a $100 check, you are ‘obligated’ to add $20 for gratuity. This 20% increase on all food ordered at a restaurant ends up costing the customer more than it should. Some restaurants are compensating for this by increasing menu prices to be allocated to servers and bartenders in place of gratuity. In all, raising menu prices and abolishing gratuity is a fairer allocation of wages and can increase a server’s average pay.
4. Tipping is discriminatory.
Whether we want to admit it or not, we all have our biases. Studies show that people are more likely to tip higher if their server is attractive and/or the opposite gender as the customer. This reality also creates a discrepancy between servers and overall unequal tipping standard.
5. Tipping well excuses sexual harassment.
In the restaurant industry the server is put in an uncomfortable position to be kind and attentive in their guests in order to help boost their tips. This becomes a real issue when people use their money as a means of mistreating servers. Some people believe that if they compensate for their actions with money it rationalizes inappropriate behavior. Servers are then put in an uncomfortable position where they must choose between making good money and being objectified by their customers.
6. Most people don’t understand tipping.
Tipping is an odd mix of obligation and reward. People should want to tip their server or bartender but given the choice, without the social obligation, it seems reasonable to believe that most people wouldn’t do it. The 20% rule is a social standard lost in translation. The fact that tipping is driven by social pressure and not eagerness to repay someone for their attentiveness or entertainment value proves that it should be standardized by a higher hourly pay as opposed to an unwritten rule to live by.
Danny Meyer serves as a great example of the new trend away from tipping. He is at the forefront of this transition. Meyer, owner of Union Square Hospitality Group, recently introduced a no-tipping policy in his restaurants. His argument for doing this was to highlight the kitchen staff and bridge the gap between front and back of the house. By raising menu prices 25%, he aims to offer a fairer wage to his entire staff. Many of his peers commend him on this action, fearing that wait staff and guests will be perturbed by this sudden change. On average, he believes, the wage equality and the gratuity-less prices will increase revenue and appease the restaurant as a whole.
Why We Shouldn’t Abolish Tipping:
As a (biased) server, I have experienced both sides of this issue, having worked at restaurants that use gratuity and those that do not. While there is merit to both sides of the argument, I believe abolishing tipping would ruin the industry.
In most industries, employees are paid based on ability and effort, whether by commission, bonuses, or promotions. So why should the food and beverage industry be any different?
Being a good server or bartender requires extensive training, specialised skills and work ethic. Yes, I know that there are many out there who scoff at this idea, but those people have never run the gauntlet of real service. You must be organized, well-spoken, knowledgeable about menu and drinks, attentive, adaptable…the list goes on and on. As it now stands, the better you are, the more tips you’ll earn. Sure, there will be tables that tip poorly, but it’s a numbers game. More than any other job I’ve worked, the harder you work as a server, the more money you’re going to make, and it’s because of tipping.
Another important element to consider is incentive. It’s not a mystery that your server is kind to you because it’ll make them more money. If this merit-based compensation is stripped, the only incentive to provide quality service becomes not getting fired. It makes it easier for service employees to do just what’s necessary. Going above and beyond has no meaning if there is no reason to do it. It’s a cruel reality, but that’s how it is. No one wants to be bending over backwards for needy guests at 9:00 am on a Sunday morning if they don’t have to. The incentive of making more money for more effort will always trump mediocrity for a higher hourly pay.
The negative impacts of no tipping go beyond the customers, and in fact, cause the entire establishment to suffer. Not only will businesses lose revenue because of lost customers, but also from the lack of upselling. Since servers’ compensation is not based on the check total, there’s just no incentive (there’s that word again). If businesses can’t maintain a steady cash flow, then they can’t afford to pay servers. It’s a vicious cycle that isn’t being taken into account.
What About A Compromise?
This is definitely a complicated issue with pros and cons to both sides. Perhaps there is a place for both models: tipping and increased hourly pay.
When it comes to the dining experience in itself, if your server is good at their job, they will enhance the entire meal with suggestions, entertainment and attentiveness. For example, when it comes to a fine-dining establishment, your server is crucial to the success of your meal and should be compensated accordingly.
At a diner or any turn-and-burn establishment, it makes sense to pay employees with an hourly wage. The varieties of restaurants call for different forms of compensation and this must be taken into account.