Tipping Is Ruining The Service Industry - and why its a good thing.

If you live in North America and have eaten at a bar or restaurant, then you've involved yourself in the world of tipping. Throughout the world, tipping is a small enough deal that most places don't even have strict laws based on the amount of tips a bartender or server receives. But in Canada and America, servers and bartenders are often paid less than minimum wage by law, with the expectation of tips being included. 

As a bartender for a full decade in 3 different countries, I can attest to the benefits and downsides of working in a tipping society. Lets start out with the pluses, then take a look at why, overall, its a bad thing. 

The Benefits of Tipping

Tipping, as most of you know, is an extra amount of money left at the end of a transaction for the person that helped you as a 'thank you' for good service. It's not uncommon to see bartenders and servers make 80-90% of their total wage from tips. This is usually paid in cash, every day. Making $100, $200, $300 or more each day is something that many teachers wish they could do, but its not for everyone. Tipping lets customers decide if the work that their servers have done is worth paying for, and I've heard many customers argue in the debate of tipping 'It's my right to tip.' And it is, if people aren't doing their jobs to the degree that they are paid, they shouldn't be doing that job.

A lot of service industry people love tipping as well. Who wouldn't love taking home hundreds of dollars a day. It often works out to $20, $30, or even $40+ per hour of work? Not bad for working 4-6 hours a shift at a job where lives aren't at risk. 

Not to mention that tips are often untaxed, not for lack of laws, but for difficulty in regulation. 

The unfortunate part of tipping is that its become too regular and too lax. People tip, or don't tip for a number of different reasons. Some arguing that servers should 'get a real job', while others state that servers and bartenders 'make too much money' as it is. Some people tip ridiculous amounts out of habit, while the vast majority of people tip a common 15-20%. 

If 15-20% seems like a high number to you, that's because it is. But its also not uncalled for. If you compare prices of different bars and restaurants from the US to those from other countries, you'll see that prices are also consistently lower by about the same amount (usually 10-15%). 

The Downside of Tipping

I've heard countless arguments on both sides about the benefits/negatives of tipping, and even though I usually make more money from working at a tipping establishment, I'd still choose to work at an establishment for a higher wage with no tips in comparison to working mostly for tips. Lets look at the arguments below. 

1) Tipping makes servers and bartenders work harder.

Lets say that tipped jobs make up 5% of the population in North America. Would you want a teacher for your children that is tipped by other parents, but not you? Would you want your nurses to work off tips? Accountant?
When I consider any other job working on tips rather than working for a fair wage, I immediately think of corruption that will happen in that industry. It happens in the bar industry all too often. Higher paying customers get served first, extra liquor and free drinks, all because they tip their servers a few dollars more than the next guy. This insults all workers by saying that Servers/Bartenders are ONLY working this hard because of the tips, and that EVERYONE ELSE isn't working as hard as they could because they are not being tipped. 

2) Tipping is the customers choice and always should be.

Again relating to the above point that doing a job for as little as $2.13/hour should be its own reward and that people should work extra hard to get more than that, tipping is often held over the heads of bartenders and servers to get them to jump through hoops in order to make the bare minimum. Yes, many people tip well which can make up for those that tip $0 regardless of the level of service, but those tipping 30% shouldn't need to make up for those tipping nothing. 

3) Servers do well with tipping, so why switch to a flat wage?

This is the argument for servers and many people in support of tipping, but they fail to think of the unsung heros of the restaurant - The Kitchen Staff. kitchen workers typically make more than minimum wage, but rarely much more. Even many trained chefs will make less than the part time server in the front that never refilled your diet coke. This is due to people undervaluing the work of all restaurant staff. And this isn't to say that restaurant owners are making tons of cash, even with paying staff minimal wages restaurants and bars will have 30% of their revenue going to staff wages. which brings me to the next point;

4) Why should customers be responsible for paying servers higher wages?

100% of the revenue for bars and restaurants comes from customers, so paying a higher wage will also come from customers. The margins (as discussed above) are pretty thin, so increasing wages to $15, $20 or more per hour wont come cheap. However, looking at the average % tipped should be able to increase wages in both the front and back of house. 

5) But I still want to tip/ I always tip more than that!

There are many customers that tip very well, and want to continue to do so. They say that a 20% increase in prices and no tipping would mean that they can't show their generosity to the staff. Nothing stops them from continuing to tip, but ensuring that staff is not subjected to the ebbs and flows of all the customers will mean that they are able to not worry about tips and focus on service. After all, they are still working to earn that much, but now its more about providing the experience for the customer as dictated by the establishment. If servers exceed this, feel free to continue to tip. If servers fail to meet it, feel free to speak to the management about it. 

Consistently earning a fair wage is something that everyone should be able to do. If a server at McDonalds can do twice the work of another server, they should earn more. If someone has a specialized or desired skill, they should be fairly compensated for it. Ideally, a wage based on skill will mean that people don't discriminate against their servers for looks, race, or gender.  

When looking at the root cause of people that are in favor if tipping it usually boils down to one of a few things;

1) Servers and bartenders are in favor because they earn more than they otherwise could or should. Similar effort jobs would result in a lower pay, plain and simple. 

2) People that don't tip don't want prices to increase. If people are 'gaming the system' by not tipping and letting others pick up the slack, then its ok to encourage those people to stop going out.

3) People that want to tip. Tipping is often treated as a status symbol or a way of manipulating those in bars and restaurants. The customer wanting to flirt with their server will tip big and leave their number. Customers even mentioning the tip will do so to hold some power over the service staff. Its treated like a threat just as often as a reward. 

Removing tipping as a mandatory part of the dining experience will help to loosen the awkwardness between staff and customers. It will let servers focus on doing a good job, and let employers focus on hiring a better quality of staff.