On tipping

This article from the NY Times on tipping is very interesting.

It seems that in the US, 15-20% tips are becoming the norm. In contrast, tipping is not done in Japan and, in France, service charges are included on bills and so tipping is much less.

The article points out that tipping was an aristocratic practice in the Old World that only came over to the US in the late 19th century. The initial introduction of the practice caused some concern - and an Anti-Tipping Society was apparently founded. From 1909 to 1926, 6 states had - at various points - an anti-tipping law. However, it seems that the trend of tipping could not be held back and so they were all repealed and the social custom was established.

Quite understandably, restaurant staff in the US do depend on their tips to make a decent salary. The minimum wage for staff who receive tips is apparently only $2.13 in some states - since tips are expected to take them above the standard minimum wage. In such a situation, it would be wrong not to tip people - since the system is based on the idea that the wages of waiters will be dependent on the whims of the customers and how much change they happen to have in their pockets.

In order to move away from a situation of tipping, this will require higher wages for restaurant staff. Only then can the understandable guilt that some tippers face when being waited on by staff on much lower wages than themselves be tackled.

Tipping does seem to be more manifest in countries with greater inequality. Aristocratic Europe was unequal and so the rich gave some tips to servants and others in low-paid positions. As the US has the highest inequality in the developed world, it is thus not surprising that a lot of tipping takes place. In contrast, in Japan, which has some of the lowest pre-tax income inequality in the world, it is not the social custom to tip. Waiters get better and more regular wages.

There is another psychological angle to this. Not only do people give tips because it is the social norm or because they feel slightly guilty that someone else is waiting on them, but some people give tips because it gives them a sense of control. Polls have shown that 80% of Americans prefer the tipping system to a fixed service charge system. This is perhaps because it gives them the impression that they can control the quality of the service. To some degree, this may be true - but economists who have studied the point feel that the effect is small (Michael Lynn estimates there is a 2% correlation between tips and service).

This is partly because some people (who are either poor, don't have change or are misers) will tip a small amount however good or bad the service is - and because some people (who are feeling rich, generous or guilty) will tip well even if the service is poor. It is also because the waiter or waitress does not have sole control of the quality of service - they are dependent on what is going on in the kitchen and on other factors which they can not control.

I would like to move to a system more like that in Japan or in France - so that waiters get better salaries than in the UK or US - and also so that tipping an arbitrary percentage is not so much of a social norm. But it is difficult to see how we can 'move' (as a society) from here to there.

Logically, say, cleaning a restaurant and serving in it are both jobs that need to be done. It strikes me as odd that one should get tips while the other does not. Lots of other low-paid workers work in jobs where they can not get tips. It would be fairer to all if the general wage level in all low-paid jobs could be raised - rather than some of the low-paid benefitting from tips because of the sector they happen to work in.

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