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.