An Argument Against the Practice of Tipping
I truly never thought that when I started to do a little “quick”
research for this blog post that it would take me this long to actually put the
thing together and get something written up, but after seeing this College
Humor video I felt like it would be a good subject to talk about.
I started by posting the video to my facebook wall as well
as on our Facebook page and asked what other people thought about the subject.
I didn’t get the outpouring of comments that I would discover usually
accompanied any post about eliminating tipping but I did get a few of my
friends who work in the service industry to leave me some feedback as well as a
patron who could see the benefits of discarding the tradition of tipping.
EV: Interesting stuff. I don't care if ppl don't tip as bartending isn't my regular gig. Will I remember you and hold it against you? Yep. I also disagree with the Cornell study they reference. I get my biggest tips from ppl I take care of the most. While I try to treat everyone equal, Assholes-a-plenty can make this difficult on busy nights. Raising prices isn't an easy answer. Just gives the masses something different to complain about...my .02 cents.
CN: It's a novel concept, but one that would take years and lots of money to change. Small businesses (non-chain establishments) would be the first to feel it, so the backlash would be a pr nightmare. There's a restaurant in New York (?) that just banned tipping because they gave their employees a livable salary + benefits, but that causes the owners to increase the price of everything, which is a risk.
LB: Hmmmm. Interesting I am not sure how I feel about this. I feel one of draws of serving is the potential of earning more than minimum wage. Especially in a small town at least in my experience you take care of the people they take care of you. It's my part time gig, but I wouldn't do it for straight minimum wage.
AH: I think it makes sense! I know many times I may have under-tipped just because my friends and I would base it off of how many little bills we had in our wallets.
My biggest discovery through my research is that the tipping
war has become one between the consumer and the server, and the owner or
franchisee is almost always left out of the argument. Most responses went
something to this effect:
Server: “I work my butt off serving going above and beyond
my job description and I often receive $0 checks because my salary doesn’t
cover the amount I have to pay in taxes on the amount I make in tips. If you
can’t afford to tip, then stay home. If you don’t tip me well, expect bad
service…etc.”
Patron: “I don’t think that I should have to tip in addition
to what I’m paying for my meal. I put forth good money to enjoy the service of
eating out and being served is part of that service so I don’t think I should
have to tip more money than what I’m already paying. If servers don’t like
their jobs, than they should work harder, get a better education and move into
a job that pays better!”
This is just a basic compilation of some of the arguments on
both sides, but the crazy thing is that for some reason most of the Patrons are
arguing against the servers and the servers against the patrons. The fact of
the matter is that the FEDERAL minimum wage for tipped employees is set at
$2.13/hour…FEDERAL! As with other occupations, employers have to pay whatever
is higher, the Federal or State wage so you do have states, such as Minnesota,
that pay their tipped employees the same minimum wage that other entry level
employment positions get paid. And that kind of leads me into a response to one
of the largest arguments…
Restaurant owners couldn’t afford to pay greater wages to
their employees because than they would have to raise prices and most patrons
would not be able to afford to go out to eat!
I probably spent the greatest amount of time trying to
discredit this argument. Almost always, people would reference that the profit margin for most restaurants is a measly 2%, and although that may be true for
some restaurants, that figure is an average nationwide…which also includes all
of the restaurants that don’t make it. So one restaurant may be making a profit
margin of 40%, 6 others offset that by losing money and closing their doors,
and unfortunately it is true that restaurants close every day, it could be from
poor management, poor marketing or location, or even bad or not well trained
staff. It happens…in every business, not just the restaurant business.
But my main question here was, “how do restaurants handle
the change in minimum wage per state? How can it have such a huge impact on the
profit margin yet we still have restaurants in states the pay the minimum wage?
My obvious answer was that restaurants inflate their prices where they have to
pay their employees more, which makes sense considering that you need to offset
costs through the price of your products…but then I saw an Applebee’s
commercial and saw that their 2 for $20 menu was back…and I thought to myself,
well how the heck can a national brand like Applebee’s run a commercial like
that? Their restaurants are franchised so each owner, depending on their state
and the other expenses they face must be able to set their own prices, right?
If they can’t and the prices are set by corporate, how the heck do they
survive?
I guess the answer is that the 2% profit margin may just be
a bit of bullshit.
Sure the states that get to pay their employees less will
have a greater profit margin but the other states must still be doing alright
for themselves in order to keep their doors open and their employees employed.
Upon further research I discovered that the actual profit margin for most
restaurants (those that make it) is probably closer to the 10-12% figure, in
large part, thanks to lobbyists…
$0 Checks
I know it stinks when you bust your butt working for someone and then when your pay period ends you receive a check for $0 or you may even end up having to pay in. It has to suck, but it's not really an argument for why people need to tip more. I'm sorry, but everyone who works for a living has to pay taxes, it's just how things work, and when you get a $0 check, it doesn't mean that you worked for free...it means that you made so much money in tips that your measly wage that you are being paid by your employer has all gone to paying the taxes associated with the amount of money you made.
I'm not happy with the amount taken out by the government each pay check that I receive either, but for my current jobs I'm paid a fair wage by my employer and when the taxes are taken out I still have enough to pay my bills so I keep my current positions. If I wouldn't make enough, then it would be time to find different employment, it's not rocket science...it's life.
I may be willing to bet that if servers actually claimed every tip that they made, they might have to pay in quite a bit more than their $2.13/hour pay check as well. Another perk of this type of employment is cash tips...and cash is pretty hard to tax if you don't claim it.
HOW THE HELL CAN
FEDERAL MINIMUM WAGE ONLY BE $2.13 FOR TIPPED EMPLOYEES?!
It turns out that way back in 1991 (which doesn’t seem that
far back to me), restaurant lobbyist convinced congress that there should be a
different minimum wage for tipped employees…how did they do this, why the same
way everything else is done in congress, by buying politicians votes. Who could
afford to pay to get something like that done?! Poor restaurant owners who were
trying to scrap by on the crumbs of a 2% profit margin…sound fishy to you?
Here’s the kicker…The Federal minimum wage was $3.80/hour in
1990 and was raised to $4,25 an hour starting April 1st, 1991. The Federal
minimum wage today is $7.25/hour with talks of an increase up to $10.10/hour…but
the tipped minimum wage has remained at $2.13 since 1991. Let’s say we get to
that $10.10 point by 2016, that would mean that in 15 years we have seen an
increase in the minimum wage for most employees of 137%...which may be wrong
since it’s been quite some time since I’ve had to use math…but in that same
time frame, the tipped minimum wage will not have changed at all.
The law states that if tipped employees do not make the
minimum wage when their salary and tips are combined than the employer must
make up the difference, which of course is a terrible system as you put it, once
again, back on the employee to bring this to their employer’s attention. If you
take the time to read some of the other links I provide at the end of this
post, and read the comments left by people in the service industry on those
posts, you’ll hear horror stories of how employers have even been known to skue
the amount employees made in tips in order to not have to pay them the
additional funds…you’ll also see that most tipped employees, despite what their
base salary is, make far more than most if not all entry level positions once
you figure in their tips.
SO WHY ARE WE ARGUING
OVER THIS?
When it comes right down to it, my personal belief is
centered on the fact that big business (restaurants) are geniuses. Not only
have they locked in their minimal ways of paying employees with the federal
government, they’ve turned over their responsibility of paying those employees
to the people who are using their service. If a server doesn’t make the amount
they think they deserve, they aren’t upset with their employer, they’re upset
with the customer.
And honestly, how could they be upset with their employer? I
don’t think I’ve ever taken a job without knowing what I’d be getting paid in
advance and the same goes for servers. They’re told what their base salary will
be and are aware of the fact that they are mostly paid by the consumer through
tips.
WHY WOULD
YOU WANT EMPLOYEES WHO WORK FOR TIPS?
I get that if you have employees work for tips, than you can
pay them less and consequently rake in more money yourself, but what are the
negatives associated with this practice?
Pilferage. First of all, count on pilferage. If you tell someone that
you’re going to pay them right next to nothing to do a job for you, but someone
else tells them that if they give them a little extra kick in their drink or
some additional food than they will tip them handsomely, than how do you
prevent them from taking from the person who’s giving them nothing and giving
to the person that has offered to give them extra?
The number one problem that restaurants deal with is pilferage, and as stated above, how could it not be? If employers went out of their way to pay their employees what they're worth, and outlawed the tipping practice than why would employees pilfer? If they knew that giving someone an extra shot of alcohol in their drink wasn't going to lead to more money for them, than why would they risk doing it? A better question may be, why haven't restaurants gone this way if pilferage costs them so much? I think a good reason may be that they save more money in employee costs than the costs associated with pilferage. The attempt to stop this in restaurants/bars is a prime example of having your cake and eating it too. More profits for the restaurants and less loss is definitely to their benefit, but apparently increasing the wage of their employees doesn't really cross their minds as they try to find a solution to this particular problem.
Off Days. What happens when you have a tired employee? Say
this employee has been a blockbuster for a couple of days and has made pretty
darn good money in tips, but last night they went out and just don’t feel like
working today. They may lower their performance simply because they don’t
really care to be there and know they’ve already made a lot of money for the
week.
Company Image. This kind of goes along with the last item,
but what kind of employees do you want representing your business? How
demanding can you be of an employee you only pay $2.13 to do their job? It is a
staple in the customer service business that the customer pays your wages, not
just for tipped employees but for anyone in customer service at all. People get
to decide where to spend their money and if your service isn’t good they will
go somewhere else and spend their money. If they go somewhere else, that
translates into less money for the owners of the operation and also less hours
for the employees and possible closure of the establishment.
If you want to have employees that represent what you want
your business to stand for than you have to compensate them for the job. If you
rely on someone else to compensate them (through tips), than expect them to
portray the image that gets them paid the most, which more than likely won’t be
the standards that you set.
Have you seen the movie "Waiting?" Quite frankly it is a disgusting portrayal of the restaurant business and many of the people I have known who have worked in the industry have said that it's actually a pretty accurate movie for some of the places they have worked. If you haven't seen it, it may be worth a watch just so you can see why they say, don't mess with people who prepare your food. When people work for the customer and the customer pisses them off, it isn't a good thing. These things may happen no matter the wage set for servers because we've all seen how terrible some people treat others but maybe we could have better behaved patrons and servers if owners paid their employees more and management was given more of a green light to refuse service to patrons who lack respect for restaurant employees.
CONCLUSION
We all get an opinion on everything, that’s what makes this
country so great and in the same sense, tough to live in! But when it comes to
tipping I think we really need to consider what it is, a way for employers to
get away with paying their employees less which translates into higher profit
margins for the company. A better bottom line, regardless of other arguments.
The restaurant industry is a multi-billion dollar industry which employs a
giant portion of working individuals, but like many industries it is just
another business with the same risks/reward possibilities that others face but
are protected towards better profits because of a loop hole which allows them
not to pay a livable wage to their employees. They’re smart, though, turning
the debate away from them and towards the consumer/server relationship.
I hope in the future we see a change in this system and
employees are paid what they are worth by their employer. I, personally love to
tip for great service because I like to reward people who do their job above
the call of duty, but when you consider the markup on food and drinks at all
restaurants, you start to question why you’re paying double for the single
service you’re receiving. The best thing that restaurants do is when they
automatically add on a certain percentage tip for larger groups. Servers and
patrons alike see it as a way to ensure that the server doesn’t get “stiffed”
by the patrons, but really it’s just a way for the employer to ensure that the
employee is getting paid by the patron, not them. The industry has done one
hell of a job pulling the wool over all of our eyes, and hopefully someday we
can do something about it.
WHY AM I QUALIFIED TO
MAKE THESE ARGUMENTS?
For one, I’m a writer who adds another heading after his
conclusion heading, so I must be better at something other than writing, right?
But more importantly I had a serious three month stand in
the industry. For the most part I washed dishes but one day I was given my big
break to attempt serving!
I got to serve exactly one table.
At that table I took their drink and food orders right away
as they came in knowing what they’d like as they were regulars. There were five
patrons who all ordered a pop as well as a water and then their food order. I
filled the glasses with the appropriate beverages, loaded them on my tray,
brought them over to their table, and then proceeded to spill the entire tray
on all them.
They were absolutely soaked but fantastic about the whole
situation. I was obviously very embarrassed and apologetic but they were
unreal. They said that it wasn’t a big deal at all, and allowed me to continue
to serve them the rest of the time, all while sitting there in their soaking
wet clothes! They even left me a really good tip, I remember because it was the
first and last table that I ever got to serve. After that it was back to
washing dishes until I decided the restaurant business wasn’t for me.
But that’s not really where my restaurant story ends. I
actually, somewhere along the line, started to love to deal with people and for
a long time felt like running a restaurant would be something I would be
interested in so when I had exhausted most other majors in college (I think I
had gone through about 6) I decided to get my degree in what used to be known
as Hotel & Restaurant Management which has now taken on a broader scope to
include the entire service industry and is now known as Hospitality Management.
I have yet to re-enter the restaurant business but have strongly
been once again contemplating it and felt like the issue of tipping may be
something that would be worth doing some research on. The links below will lead
you to several other great articles and facts about tipping and the restaurant
business in general so I hope you check them out! But I started this blog with
a video and I’d also like to end it with one. This is a TED Talk given in
Canada from an individual who has worked in the Restaurant industry his entire
life and has some fantastic information and suggestions about tipping. If you
don’t check out the other links, at least give this video a watch. It’ll cost
you 20 minutes of your life but the gratuity is already included!
Searching for the Life Lesson?
How about, don’t judge a book by its cover? When
we talk about tipping it becomes too cut and dry of a topic, there aren’t
tippers and non-tippers and those are the sides, both are really fighting
against the establishment…they just don’t realize it a lot of the time.
A Few More Articles for Your Reading Enjoyment.
(Make sure to read all of the comments to really get a feel for how the battle has become one between Servers and Patrons rather than against the Restaurant Owners)
