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Dec 22 2008

The problem of tipping

(As is my custom this time of year, I am taking some time off from writing new posts and instead reposting some old favorites (often edited and updated) for the benefit of those who missed them the first time around or have forgotten them. The POST SCRIPTS will be new. New posts will start again on Monday, January 5, 2009. Today’s post originally appeared in November 2005.)
I have been traveling a lot recently on work-related matters and this requires me to do things that I don’t routinely do, such as stay in hotels, take taxis, eat at restaurants, and take airplanes.

I generally dislike traveling because of the disruption that it causes in one’s life and the dreariness of packing and unpacking and sleeping in strange places where one does not have access to the familiarity and conveniences of home. But another reason that I dislike these kinds of trips is that they force me to repeatedly confront the phenomenon of tipping.

I hate the whole practice of tipping. One reason is structural in that tipping enables employers to avoid paying workers less than the minimum wage, let alone a living wage. People who work forty hours per week at the minimum wage of $5.15 per hour make about $11,000 a year (Note that in terms of inflation adjusted dollars, this is the lowest rate since 1955.) But there are exemptions from even this low rate for those jobs where there is an expectation that the employee can earn at least $30 per month in tips. Some jobs pay about half the federal minimum wage rate and employers can justify this practice by arguing that tips more than make up the difference between this and what is necessary to support themselves and their families. But note that all you need is to be able to get $360 per year in tips to be not protected by even the currently miserable minimum wage laws.

I feel that people should not have to depend upon the kindness of strangers (which is what tipping is) to earn a living wage. Anyone who works full time should be able to make enough to live on, which in the US means roughly doubling the current minimum wage, although there is strong regional variation.

I hate tipping because it seems like it is meant to force people to be nice to me. In general, I find people to be nice and polite and helpful without the need for extrinsic motivators for such behavior. I think that almost all people are like that and do not need to be paid to extend the common courtesies of life to one another. People smile, greet each other, assist each other if necessary, all because we feel a sense of empathy and oneness with those around us, not because we expect some reward.

But when I tip someone, I feel as if I am implying that that person performed that act of kindness or service because of the expectation of payment. And to me this cheapens that human interaction, transforming it into a commercial transaction. Unfortunately, I don’t know what to personally do about it. I tip people because I know they are not paid well and depend on tips to make ends meet. But if at all possible, I try to bury the tip so that it is not obviously an exchange of money between the person being tipped and me. In restaurants, I add it to the bill and pay by credit card so that no money directly changes hands between the server and me.

But in some cases, you cannot avoid a cash exchange so I try to avoid situations where the tip is the only money that exchanges hands, but instead is part of the overall cash payment. For taxis, for example, I can add it to the fare so that I am not due any change and so can act like I am paying just the fare. If that is unavoidable and I have to give a cash tip to a person that is not part of a payment for other goods and services, I try as much as possible to do it when the recipient is not there, like leaving it on a restaurant table when leaving, or leaving it in a hotel room when checking out.

But there are some situations, such as with porters and hotel doorpersons and bellhops, where the tip cannot be so disguised. I try as much as possible to avoid those situations by doing things myself as much as possible and if I cannot do so, tip as unobtrusively as I can.

We do not live in an egalitarian society. Society is stratified by class and wealth. But tips seem to rub everyone’s noses in that reality in a particularly revolting way. The jobs that depend on tips seem to me to encourage servility and an almost feudal sensibility, throwing us back to a former age where the ‘noble lords and ladies’ dispense largesse to a fawning and grateful peasantry. Fortunately I do not spend time in places where wealthy people hang out and where there is an expectation that you will be waited on hand and foot and treated obsequiously. I live largely in a world where people carry their own bags, do their own chores, and open their own doors, or do so for others simply out of politeness.

Perhaps I am overreacting to what is ‘normal’ practice, seeing a deep social problem where none exists. But then I wonder how I would feel if the university did not pay me a living wage but instead had tip jars in each classroom and I had to depend upon satisfied students to give tips after each class supplement my income. A colleague tells me that in the old days of the Greek philosopher-teachers, students would pay them for each class if they were satisfied, so this is not an unheard of practice. What would that do to the student-teacher relationship? I cannot imagine that it would be good. So why is it good for other relationships?

What I would really like is for everyone to be paid a living wage.

POST SCRIPT: Sand sculpture

I have always been impressed with the time and effort that some people put into such temporary things as sand sculptures. Here is one in Italy where tons of sand was used to create a huge nativity scene which includes approximately 200 figures and 100 animals.

2 comments

  1. 1
    Rian

    The problem of course is that as it is, minimum wages enshrine permanent unemployment by not allowing people to work for less; price floors exclude those who cannot get work at more than the floor price.

    Raising the minimum wage to a “living wage” will have as a side-effect the increase of the unemployment rate, increases in unemployment payouts, and either increased taxation or inflation to pay for those payouts. Even worse; if inflation is chosen as the mechanism to pay for this that wage increase will be nowhere near as useful as you’d think at actually helping people raise their real standard of living.

    In the end, you end up with a smaller workforce having dollars that are worth less, paying for the larger number that can’t get jobs at the higher rate.

    Higher wages as a result of market forces is a good thing because there won’t be structural unemployment that way – they’ll actually be making what employers are willing to pay for their services. If you mandate a floor for wages, if the employer isn’t willing to pay someone that floor, that person won’t be hired at all with the effects described above.

    I’d like everyone to be paid a living wage too, but I’d also like the living wage to not cause major unemployment and unduly burden those segments of society that would retain their employment under such a policy.

  2. 2
    Sara

    Yes I agree with you about being paid a living wage. As a former senior hotel Director, I am unhappy sometimes leaving tips in hotels, especially as part of a ‘add tip to credit card’ process, as often workers do not see this money, as the hotel group pockets it. I abhor service charges charges that are added to restaurant bills automatically and refuse to patronise such establishments. Good,interesting topic.

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