Archive for April, 2006

The Tipping Point

Monday, April 24th, 2006

Mr. Poon got me thinking about something the other day. (I know: That’s the reason everyone goes to his site, for the thinking!) It was this post about tipping. And then, the next day I went to this little place for lunch. Everyone loves it, local institution, rave reviews, etc. They’re especially well known for the friendly staff and great service. In fact, there was even a note on the menu that they take pride in their service and appreciate “the customary 20% tip.”

Now, let’s leave aside the fact that my service that day was actually so bad I got my meal for free. That’s another story. And I guess I’ve even come to accept that 20% now really is “customary,” when it was just 15% not too long ago. (And in fact, I think a lot of people would still say 15% is the norm, and I was at a place last week that automatically adds 15% to late-night orders.) Okay. But even accepting 20% as the standard, where did that come from?

Who decided we suddenly had to pay 20% instead of 15%? What were the reasons for that? I’m not saying waiters and waitresses or delivery people don’t work hard, but are they — as a nationwide class — working 5% harder than they did just a few years ago? (My experience last week would indicate no.) If they were underpaid at 15%, why was that the standard for so long, and still the accepted rate in some places?

One obvious answer may be that food prices are up 5% (or more) recently. Even assuming that’s true, I don’t buy it as the sole reason. That’s because my sense is that the tippees expect a minimum amount even when the bill is small. For instance, if the bill is $7.50, a lot of tippees would be quite upset to only get $1.12 (15%) or $1.50 (20%). After all, they work the same whether I order the grill cheese special or the Grand Slam Hungry Man plate. But if the price rises 5%, to $7.88, they’re probably not going to be content to get a whopping $1.58 (20%). The math is confusing me, but my point is just that at the low end of the price spectrum, even 20% is a pretty measly amount, and the tip amount isn’t totally in sync with the bill, so I don’t think a 5% rise in food prices can account for an across-the-board jump from 15% to 20%. Moreover, surely there are places where prices have risen even more than 5%. Is the norm there even higher? Before you answer, ask if it’s higher because of rising prices and in line with the amount of increase. It may just be that you’re living some place where restauranteurs are gouging you and some social pressure makes you feel like a heel if you tip less than 25%.

Another obvious answer is that the “cost of living” has risen 5% (or more) recently. And, with the lack of change in the minimum wage, and assuming that employers aren’t making up the shortfall themselves, it falls to consumers to extend an ad hoc cost-of-living adjustment. Of course, rising food prices would be part of an increase in the cost of living. So maybe the answer is a combination of these two reasons. But why a jump from 15% to 20% with no stops in between? Wasn’t the rise in cost of living more gradual? I think we would notice if the price of everything jumped 5% overnight. Was the tip-dependent service industy willing to live on 15% tips when the rising cost of living would have dictated, say, 17% or 18% tips, or did they round up to 20% as soon as the cost of living “tipping point” was, say 17.5%?

I’m not trying to sound bitter or turn this into a rant. “I wish we tipped like Europeans do, wah, wah, wah…” If you like that system so much better, eat over there or cook at home. I’ve made my peace with the concept of tipping, and am generally a good tipper. (I’m not extravagant for no reason, but I tip the standard amount for standard service and reward better service with better tips.)

So this post isn’t meant to ask why we tip or whether we should. What I’m curious about is how we seem to have agreed on this increase from 15% to 20% and what the reason for it was. And how high will it go, because I don’t see the cost of living going down. Your tips are appreciated.

ALL-REQUEST: Honor Systems

Tuesday, April 18th, 2006

PG writes in to ask: “What do you think of ‘single sanction’ systems of punishment, particularly on undergraduate campuses? As a UVA student, I thought it was exceedingly stupid to have only one punishment — explusion — available that would be imposed on every student found guilty by the Honor Court, not least because this led to a ridiculous level of jury nullification. Few non-Honor-Court types were willing to wreck another student’s life by having him expelled, even if he clearly had lied, cheated or stolen.”

Ideally, the students would buy into the honor system. When that happens, the system becomes a reason for trusting your fellow students rather than suspecting them or surveilling them. I think an even bigger risk than jury nullification is failure to report honor violations. If an impartial jury won’t sanction a student, why would a roommate or friend who actually cared about the student turn him or her in?

But PG, how would you feel without the jury nullification? Imagine you went to a school that wasn’t afraid to use its honor system (like mine). What are your problems with it? I really do believe that either you have honor or you don’t. And, I just don’t have a lot of tolerance for cheaters.

Still, that can’t work for every school. In particular, as PG points out, it might work especially poorly for undergraduates. I know when I got to grad school and accepted the honor system, I had to forget all my good excuses for missing class. I was still hanging on to them for a while in undergrad. Plus, graduate schools or small private schools, where the students feel more kinship, might better be able to administer a fair system, as opposed to a large public university.

Consider the Bar as an analogy. There are all sorts of ways to violate the ethics rules governing lawyers, and many sanctions — fines/restitution, reprimands, suspension, disbarring. Who decides? Do you prefer a system where fellow students find guilt and also choose a punishment, potentially leading to arbitrary or disproportionate sanctions? A system where students adjudicate guilt and a committee of students, faculty, and administration fix the penalty? Should students be involved at all, at least at the undergrad level?

I’m mainly spitballing here; I think different systems work better for different schools. UVA’s Honor Code got started when Mr. Jefferson’s Academical Village was more akin to the Wild West, and a student shot and killed a professor. Horrified and ashamed, the students started a self-administered honor code. Perhaps the single sanction is a holdover from the days of duels. But recent events at another prestigious school make me wonder if it isn’t a good thing when students take that kind of ownership and personal responsibility for the school’s good name, and are willing to disassociate themselves from any who sully it. Or perhaps I should just go have another mint julep on the veranda.

What’s Black and White and Red All Over?

Monday, April 10th, 2006

The answer is Communist Pandas! Or maybe they’re Trojan Pandas. Last week, my intrepid staff of interns sent me this story from “Newsweek” about an interesting development in Chinese-Taiwanese relations. Basically, China offered Taiwan two pandas. The Taiwanese people were quite excited about the opportunity, and two zoos fiercely competed for the honor of housing the animals.

Ah, but there was a catch! Under the governing endangered species treaty, pandas can only be lent, not given. Taiwan can’t afford to pay the necessary costs, but China was offering the pandas for free, on the theory that they were merely being moved within the same country. Accepting the pandas would be an admission that Taiwan is actually a province of China, as the mainland government insists. Sure, Taiwan could still assert its formal independence, but the panda gift would be a huge propaganda victory for the mainland.

So, after much hand-wringing, Taipei finally decided to decline the offer, with the face-saving explanation that Taiwanese officials had determined that the local habitat wouldn’t be good for the pandas. The Chinese papers are naturally shocked that Taiwan would have misinterpreted such a benign goodwill gesture. Meanwhile, the Taipei Times says “Enough about the pandas, already.”

I’ve written a little about Cross-Straits relations here and here. Taiwan’s pro-independence President Chen Shui-bian was caught in a tight spot on this one, and it might be the kind of thing to make both sides even more bitter. I expect more cross-straits tension as we get closer to the 2008 Olympics in the PRC. Stay tuned.

Random Thoughts

Tuesday, April 4th, 2006

1. I’m no economist, so I apologize in advance for a few of the econ-related items in this edition of the Random Thoughts clouding my brain. First, Slate had a piece up over the weekend about how much bang Washington lobbyists are getting for their bucks. The author notes the size of the federal budget ($2.5 trillion) and the total expenditures by lobbyists ($2 billion). Then, by assuming that lobbyists must be rational actors responding to incentives, he concludes that the government must be generally honest — because otherwise the lobbyists would spend more if they could get more return for their money.

I think this is flawed for at least a couple reasons. First, members of Congress aren’t spending out of their own pockets (yes, except for taxes, but overall, that’s negligible). So there’s no financial pinch to them if they give lobbyists a 1000-to-1 return. Second, a lot of that $2.5 trillion is going to get spent even without lobbyists, so many lobbyists may see their jobs as simply directing the federal fisc in their direction, for their clients’ benefit. If I’m going to buy a $20,000 car regardless, one dealer’s rebate of $1000 is going to trump a competitor’s offer of $750. The first dealer essentially spends $250 (the lobbying money) to get $19,000 (the federal program I was going to vote for anyway). It’s not hard to see how it might tkat “only” $2 billion to move $2.5 trillion. I’m not willing to conclude Congress is clean, when the evidence also supports the conclusion it’s just cheap.

2. Over at the Freakonomicon, two interesting posts. First, this one about a ballot initiative in Arizona that would establish a lottery for voters — a random voter would win $1 million, hopefully increasing voter turnout. I can think of some pros and cons to this one, but I still would kind of like to see what would happen if they did it. And, this post with a link to a really cool site called Worldmapper. That page is a collection of more than fifty neat maps displaying various data about the countries of the world. I wonder if anyone in Congress might try to make some hay out of this map showing immigration destinations.

3. A funny thing happened when I went home for lunch the other day. Just in front of my place, I passed an older fellow. He stopped me, and I assumed he was going to ask me for directions. But he identified himself as a reporter for the local paper and wondered if he could ask a few questions. I said “Sure.” He said, “Are you aware that the legislature is [doing whatever it's doing]” I said “Yes” because I am aware of that. He said, “What do you think about that?” I smiled and said, “I’d rather not comment, thanks,” and he walked on. Now I expect it to end up in some “Locals Don’t Know, Don’t Care About Legislative Agenda” story or something.

But it reminded me of the last time I was stopped on the street, a few weeks ago by a guy asking for money. He stopped me in a way that I couldn’t really keep on walking, and went into his spiel: “I just got out of jail tonight….” He was basically saying that he was too late to get into any of the shelters, which made me think (a) maybe you should have tried to stay another night, and (b) that’s total crap, because I know I’ve seen people lined up at the Salvation Army later than this (and the Salvation Army is between the jail and where he stopped me). Anyway, I told him I couldn’t help, and he moved on, but the whole time I was thinking, You’re accosting people on the street to ask for money, and your pitch starts out with “I just got out of jail”?! I’d recommend working on a new script before someone with a concealed-carry permit gets an expansive view of “self-defense.” Plus, it’s not exactly endearing. All in all, strange.

4. Prediction: Katie Couric will end up being worth all the money CBS is going to throw at her.

5. Congrats to Mr. Poon on getting married. It sounds like his wedding weekend was a lot better than the one Fitz went to last summer in Ohio. Still, I’m sure there was at least one old lady eager to give Poon advice for “the big night.”

I think that’s all I have now, but this post is subject to amendment in case anything else pops into my head.