Tipping Is Not Capitalism: Arguments For and Against Tipping

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“Following the custom in Japan, Sushi Yasuda’s service staff are fully compensated by their salary. Therefore gratuities are not accepted. Thank you,” says a bill at the Midtown Manhattan Japanese restaurant, which decided to do away with tipping this month.

Instead of leaving a gratuity at the end of the meal, Sushi Yasuda customers are now expected to pay a higher all-around bill, which includes a service fee.

Should other restaurants and bars follow suit? ​

Tipping Is Not Capitalism
By Steven A. Shaw, founder of eGullet and author of "Asian Dining Rules"

Sushi Yasuda, following the lead of most of the world's best restaurants, was right to do away with tipping.

I find that those who support capitalism -- and many who usually don't -- reflexively believe that tipping creates an incentive, controlled by the customer, for servers to provide better service. Were that true, there might be a market-based argument against doing away with it. But all the accumulated evidence and experience indicates that tipping disrupts rather than encourages healthy workplace incentives.

Managers should decide who gets paid more, not customers. This way servers won't have to resort to upselling or obsequious behavior.

The No. 1 activity the tipping system encourages is "upselling." Because most customers tip a standard percentage of the bill regardless of what happens during the dining experience, the most significant driver of a tip is the total cost of the meal. The more bottled water, coffee, alcohol, dessert and side dishes servers can sell, the more money they make. Neither servers nor customers actually enjoy this state of affairs, but the mythology of tipping as incentive is so firmly entrenched in American restaurant culture that most of us, regardless of our actual opinions, find it impossible to imagine a world without it.

Other bad behaviors encouraged by tipping include obsequiousness, which is one of the only activities other than upselling that studies show increases tips, along with servers who use their looks to win over customers. Many establishments encourage this practice, some more subtly than others. The restaurant chain Hooters is the most obvious about it, but every restaurant manager knows that when there are two equally skilled servers "on the floor," the more physically attractive and flirtatious one will generate more in tips.

Sushi Yasuda now explains on its receipts: “Following the custom in Japan, Sushi Yasuda’s service staff are fully compensated by their salary. Therefore gratuities are not accepted.” But this is not only the custom in Japan. It is the custom in other countries where I have experienced superior restaurant service, namely France and Singapore.

The best way to encourage quality service and a humane workplace is to follow the compensation structure of most successful, ethical corporations under the free-enterprise system: employees receive a living wage, as well as increased pay and career advancement when their superiors feel that they've earned it.

Tipping is not capitalism. It's a failed exception. And it's high time we end it.

http://www.nytimes.com/roomfordebate/2013/06/23/to-tip-or-not-to-tip/tipping-is-not-capitalism

 

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Arguments on Tipping- Tips Supplement Paltry Paychecks

Tips Supplement Paltry Paychecks
Ty Batirbek-Wenzel, a Web and graphic designer, is the author of “Behind Bars: The Straight-Up Tales of a Big City Bartender” and a new novel, “The Orchid Revolution.”

“Tip or Die.”

That was written in black permanent marker on a can that lived next to the cash register at the bar where I mixed drinks for over a decade.

The cash I earned tending bar, which involved 10-hour shifts on my feet and drunks vomiting on me, bought groceries, health care and peace of mind.

I've had to defend tipping more than a handful of times. I actually had to deal with an anti-tipping heckler while on book tour for my bartending memoir. I've had born-again Christians leave me pamphlets on finding God -- in lieu of a tip -- after drinking themselves into heaven.

Sure, I made decent money from tips; there was rarely a night that I didn't clear two or three hundred dollars. “You're making money hand-over-fist!” some would declare, as if I didn't deserve it. Care to look at my $30 weekly paycheck? Care to subsidize my health insurance? I didn't get any. Care to work over 10 hours a night on your feet and shuffle home at 5 in the morning? McDonald's workers had bigger paychecks, and I doubt they had to deal with people vomiting on them on a fairly regular basis.

Getting rid of tipping would be bad business. Prices at restaurants would rise if the burden of paying servers were turned over to the house. And then there is the question of motivation. Think it's hard to find your waitress now? Think your waiter was a little surly? Wait until their income is no longer linked to their performance at your table.

Of course, if all restaurants offered a living wage -- say, at least $25 per hour with health care and other benefits -- then this could be a game-changer. Until then, though, those five- and 10-dollar bills left on tables and bars across the country are paying for rent, doctor visits and child care. Without tipping in this current environment, I fear that we would be just a stone's throw away from inflicting the same kind of poverty on servers that is endured by the employees at Wal-Mart, to give just one example.

Tipping counters the actions of powerful restaurant lobbies that spare no expense in driving down wages to near poverty levels.

So until salaries are generous, tip or die.

http://www.nytimes.com/roomfordebat...r-not-to-tip/tips-supplement-paltry-paychecks

 

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Arguments on Tipping- Cash Incentives Motivate Workers

Cash Incentives Motivate Workers
Kelly Fitzpatrick, a chef at a catering company in Brooklyn, is a graduate of the Cornell University School of Hotel Administration and the Culinary Institute of America and has worked in restaurants from New York to Alaska.

In an industry of people-pleasing hourly workers, the act of tipping in restaurants must endure for the sake of both server and customer. Tipping is a way to motivate employees and distinguish good service, and it gives guests a sense of control over their experiences.

As someone who has worked numerous jobs in the service industry -- starting out as a grocery cashier in high school and later working as a bartender, server and now chef -- I have held positions that rely on tips as the primary source of income as well as salaried jobs. One thing is clear to me: tipping motivates people who work long, busy hours catering to the needs of others. It's the best way to ensure optimal service, and the practice is perfectly suited to the pace and culture of the restaurant industry.

Tipping gives servers immediate feedback, which many believe to be an essential aspect of employee retention and happiness. It's like a regular performance review -- with a monetary component -- that does not require an office or a formal meeting with a boss. Additionally, this fast cash element helps those of us not yet set in our careers to fill holes in our wallets left open while pursuing other entrepreneurial, academic or artistic ambitions. If this opportunity for fast cash disappears, the supply and variety of restaurant workers might well diminish as workers move toward more predictable jobs with better hours and fixed salaries.

While I am a strong supporter of tipping, I welcome a discussion that considers providing certain benefits like health insurance to servers in lieu of tips. The change at Sushi Yasuda will serve as a case study to determine the long-term financial feasibility of providing health benefits and the impact on customer service. As long as the jury is out, please: tip like you mean it.

http://www.nytimes.com/roomfordebat...r-not-to-tip/cash-incentives-motivate-workers

 

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Arguments on Tipping- Raise Base Wages

Raise Base Wages
Saru Jayaraman, co-director of the Restaurant Opportunities Centers United and director of the Food Labor Research Center at the University of California, Berkeley, is the author of "Behind The Kitchen Door"

Much of the conversation in the news about whether restaurants should allow tipping misses a crucial point: regardless of a restaurant's compensation policy, all restaurant workers should receive a stable base wage that allows them to feed themselves and their families.

With over 10 million workers, the restaurant industry is one of the largest- and fastest-growing sectors of the United States economy. But it also provides the lowest paying jobs. This is largely because the federal minimum wage for all workers is $7.25, and $2.13 for tipped workers. These low wages are even difficult to sustain; my organization has lobbied consistently to keep them in place.

Most of the workers who earn the tipped minimum wage in New York and across the country are not employed by fine dining establishments like Sushi Yasuda. Seventy percent of those earning tips in America are women working at places like Denny’s and Red Lobster. Servers have three times the poverty rate and use food stamps at double the rate of the rest of the U.S. work force. In other words, the people who serve us meals cannot afford meals themselves. New research shows that over half of all tipped workers living in poverty are people of color, including blacks and Latinos -- pivotal voters in the 2012 elections.

Tips fluctuate from shift to shift, but rent and bills are constant. All restaurants should provide workers with a stable base wage that allows them to meet their basic needs, whether or not tips are accepted. Fortunately, there is good news on the horizon for restaurant workers. The Fair Minimum Wage Act of 2013 would guarantee non-tipped workers a minimum wage of $10.10 and tipped workers a minimum wage of at least $7. The bill would go a long way toward ensuring that all workers -- from Sushi Yasuda to IHOP -- would have a secure base wage to feed their families, as they feed us daily.

http://www.nytimes.com/roomfordebat...not-to-tip/tips-or-not-raise-the-minimum-wage

 

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Arguments on Tipping- It’s as American as Apple Pie

It’s as American as Apple Pie
Len Penzo, an electrical engineer, is the owner of the personal finance blog Len Penzo dot Com

In the United States, diners have been tipping their servers for more than a century. It's a time-honored practice that’s as American as, well, baseball and apple pie.

Tipping was originally intended as an incentive for rewarding and encouraging servers to provide exemplary service. Unfortunately, that now seems to be the exception rather than the rule, thanks to restaurateurs who have unilaterally stripped that valuable power from their customers.

For example, one of my biggest pet peeves with respect to tipping is the “mandatory gratuity” (talk about an oxymoron) that most sit-down restaurants routinely tack onto bills for large parties.

On the other side of the spectrum, and just as irritating, are restaurants like Sushi Yasuda that institute a no-tipping policy.

In both cases, otherwise well-meaning restaurant owners have meddled with the dynamic between diners and servers, thereby disrupting an extremely reliable control mechanism that customers depend on to help minimize the risk of an unsavory dining experience.

When properly administered, tips provide accurate performance feedback to the server, which is why restaurants that implement a mandatory-gratuity or no-tipping policy – regardless of the level of service – end up doing everyone a big disservice.

Think about it. Why would any server go out of his way to give excellent service when he knows he’ll be getting the same pay regardless of whether he busts his hump or takes it relatively easy by doing just enough to meet the minimum standards?

One of Sushi Yasuda’s co-owners said that the restaurant had decided to go with a no-tipping policy because that’s how it’s done in Japan.

The trouble is, this isn’t Japan, folks; it’s America. Like it or not, when it comes to dining out, tipping is the custom here – and for good reason.

http://www.nytimes.com/roomfordebat...ot-to-tip/tipping-is-as-american-as-apple-pie

 

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Arguments on Tipping- It’s Not Necessary in a Co-op Environment

It’s Not Necessary in a Co-op Environment
Erin O’Bryant is the president of the board of directors at Black Star Co-op Pub & Brewery in Austin, Tex.

Historically, restaurants and bars have foisted the proper remuneration of their employees onto the consumer. This practice shifts the worker’s focus from providing good customer service and having pride in one’s work to doing whatever it takes to earn a decent living. At best, the hope of a good tip motivates workers to provide quality customer service. At worst, tips can be demeaning to workers and can serve as a crutch for employers to continue exploiting their staff.

By eschewing tips and paying workers a living wage with benefits, our co-op pub and brewery supports the people who keep it running.

At Black Star Co-op Pub and Brewery, we do not accept tips. We pay our workers a living wage with benefits. This policy works for us for a couple of reasons. One, we do not have table service. Had our business plan included table service, we would have needed to employ a larger staff. We could not have afforded to pay our workers a living wage and make a profit without having significantly raised our prices. Two, we’re a cooperatively owned business with over 3,000 member-owners. Proper worker treatment is one of the core values we developed with our member-owners; not every business has that level of built-in support.

In the beginning, people thought we were crazy to shirk the time-honored practice of accepting tips, but it was a concept we felt strongly about and wanted to try. We believe in owning and working for an establishment that supports the people who keep the organization running. Do patrons still want to tip our workers? Sure, because it’s ingrained in our society. We politely decline the tip and explain our fair remuneration practices, and then we encourage patrons to consider using that tip money to buy their table another round of beer!

http://www.nytimes.com/roomfordebat...tipping-isnt-necessary-in-a-co-op-environment