Some people think so. But then I ran across this article: This simple tipping trick could save you over $400 a year. Before you click the link, guess what the “simple trick” is.
It’s the stunning insight of “tip less”. In order to justify two dozen paragraphs, a video, and a fancy info-graphic, though, they have to justify it with some cheesy detailed rigamarole about how instead of shifting the decimal point in your bill one to the left and doubling it to get 20%, you should know the sales tax rate in the state, look at the tax on your bill, and use that to calculate the tip.
The second group uses the information provided to them on their bill to double the tax (8.875 percent in a place like New York City) and arrive at a tip close to 18 percent. In a state like Maryland where tax is 6 percent, they triple the tax instead.
It’s math, therefore it is correct. Never mind that you’re simply stiffing the staff a few bucks and then inventing a secret formula to rationalize it.
And then they have a bar graph to illustrate how much you’d save by tipping less, and went out to Times Square to interview people and ask if they were supportive of their “trick”. I hope the nerd who slapped that stupidity together feels really dirty right now.
Their earthshaking conclusion: less money tipped is more money saved
. No shit, Sherlock. I am forced to conclude that CNBC is simply stupid, not liberal at all.
Tipping pretax has always been the standard advice.
Putting aside the ethics – their own numbers explicitly give $4 saved for a $100 bill before tax. Just getting that $400 saved involves spending $10,000 on restaurants per year without taking tip into account, and again using their own numbers this works out to $12,176 in restaurant bills. This is staggeringly out of touch.
It only gets more so when they try to justify it by pointing out the growing shares of millennials without savings. Somehow I suspect that group also doesn’t spend twelve grand a year in restaurants.
This is completely whack.
In So. Many. Ways.
First, let’s just get it out of the way: They’re asking people to be evil fucks. Yes, being an evil fuck and not giving people money you owe them saves you money, as long as you don’t get sued for it later and have to pay what you owe plus legal fees plus penalties! But wait! There’s good news for evildoers: As there’s no lawsuit for insufficient tipping, you can decide to tip like an evil fuck and save yourself money now without fear you’ll ever be forced to pay it back later. FREE MONEEZZZ! And all it takes to get it is a willingness to be evil!
Second, they really thought that it never occurred to evil people that tipping less is an option?
Third, they’re arguing that saving 10% of what you tip will add up to $400 over the course of a year?
That means expected tips at 20% are $4000 in order to save you that $400 by tipping $3600 at 18%. That means that, wait for it, the money you spend dining out totals five times the original $4k, and that is …. $20,000.
TWENTY FUCKING THOUSAND DOLLARS. After tax most families aren’t clearing $50k. Housing and utilities easily eats up 40% of what’s left, for many people it eats up 60-80% of what’s left. You can literally put one member of your family through a private university on what CNBC thinks you spend on take out food each year.
WHAT THE FREUD IS WRONG WITH YOU, CNBC?
You spend $24k eating out every year and you
CNBC is in no way liberal. If it had an official editorial position on labor, it would be “wages are theft”. If they want to know why millennials aren’t saving, it’s because people like them keep trying to find new ways to pay people less and less.
This is why I’m a Leftist and not a cowardly, simpering, “liberal,”
@Knabb:
I noticed that they said that, but it’s funny because using their own method – shifting from 3 * 6% (going off Maryland tax) or 2 * 8.875 % (ny tax), they’re supposedly advocating going from 20% tip to an 18% (or one that rounds to 18%).
This is a shift of 2%. So for every $100 you actually save $2, not $4.
Also I should mention that the $20k I mentioned above is before tax and before tip. In Oregon with no sales tax, that means your total eating out would be $23,600. In NY with an 8.875% tax the total would be $25,375.
Of course, no reasonable person spend that much on anything like a median income. In fact the median household spending on dining out per year is actually $3,100. (It’s not clear if this is inclusive of taxes and tips or not, but if it’s a survey the values that they got from people are probably already post-tax/post-tip). Moreover, a good amount of that might be things like fast food drive through, where tipping isn’t expected and usually not done. If $3,100 was your pre-tax, pre-tip amount and none of your food was purchased at the drive through, you’d actually save $62, not $400. To save $400 you’d have to spend the same amount on your own household as 6.5 median households combined. Assuming that $3,100 was post-tax, post-tip, it would require spending equivalent to even more households.
I conclude that in addition to being evil, CNBC writers are idiots.
Crip: “You can literally put one member of your family through a private university on what CNBC thinks you spend on take out food each year.”
$20k is not likely enough for a year at a public college. It’s about the average semester of private college tuition.
Not to say it isn’t a stupid amount of money to spend on food, just that university is much more expensive than you seem to think.
Thanks, numerobis!
I looked it up and you’re totally right about private colleges – average tuition+fees is 35-36k.
Average out-of-state tuition+fees at a state school is in line with what I was thinking – 21k. In state tuition+fees is apparently averaging just below 10k.
Thirty years ago, I was taught that a proper tip was 15%. When did it change?
No one I know turns up a nose at 15%, but I was taught that less than 15% was rude, and therefore if you felt like you got good service you need to tip more than that
I don’t actually have a problem with routinely tipping 18%, my problem is more that the attitude of the article is, “Hey, did you know that if you don’t pay people you get MORE MONEEZZZ?!?!??!!!?!?!?!?” combined with the obvious bullshit of “Save $400 with this one easy trick!” which requires you to spend $20k going out to eat and/or shaving even more off your tips than 2 percentage points.
The whole thing is fucked. If you need to save money & you’re spending even US$5k/ year going out to eat you can easily save that $400 by simply eating more food at home without shorting your tips at all.
Then there’s the point that it’s to save $400 a year. Assume, for a second, that it doesn’t require spending on obscene amount on restaurant meals, or being a soulless vampire turnip: Do I actually care about saving $400 over the course of a year? Does that $1.095 per day make an appreciable difference to my retirement savings, readiness for a medical emergency, or financial security? No, it does not. I do not care.
Even if I look at it like that zero sum calculating turnip, I’m probably better off spending it on reducing the likelihood of being mugged for rent money by the dish washer at the end of the month.
Re: Gregory @ #9…
When I was growing up, the “standard” was 10%. Now I know that restaurant workers are notoriously underpaid, but meals are way more expensive than they were 60 years ago, so doubling the tipping rate on–what? 5 times the biil?–looks like a pretty significant boost to somebody.
I’ve also wondered how much tipping should depend on local laws. In places with a higher minimum wage, and in particular places that don’t allow tipped employees to be paid less than non-tipped, is it acceptable to tip less than where the only tipped wage law is the rediculious $2.13 federal minimum?
@1 / denaturesd, @12 / whheydt:
I was taught 15% pretax – for reference, I’m 49, grew up in rural southern Maryland, and left the country in ’94. Since then, it does seem that the average recommendation’s gone up, which is fair enough. It’d be interesting to see where and when all those standards have changed.
It does seem that since I’ve left tipping for other services has become standard – in particular, housekeeping at hotels. I’d never heard of that until a few years ago. It’s becoming a real pain in the butt both to know whom I’m supposed to tip and somehow to get enough small bills to do so in a week. Can’t get fives out of an ATM, can rarely get them at big hotel front desks, and you can’t add housekeeping tips to your hotel bill.
#13 epawtows,
I can tell you that in California (LA), where there is no non-tipped/tipped distinction nonsense and everyone earns at least state minimum wage, it is still not (socially) acceptable to leave less. I always leave about 20%, and from people I know, the ones that work(ed) in restaurants leave more tips and are more considerate with other restaurant employees than people who have never had the experience.
I’ve even had to do the old “sneak back to the table to leave more tip” move when someone was visiting because they weren’t from here, and since they were buying I couldn’t just tell them to leave that much, but in fairness everyone who visits me from elsewhere (not in the US) is surprised that it’s customary to tip that amount.
Actually, a liberal person (in the awkward American sense of left-leaning) should be against tips altogether. Tips are used to justify low wages. They promote unhealthy competition among staff over them. Here in Portugal, where they are nowhere near universal but are still quite common, they rarely are accounted for, i.e. they don’t go into the staff’s social security or income tax and don’t contribute to their retirement. Tips are the epitome of an unregulated labour market.
That said, where tips are expected, and necessary for people to make a living, as they seem to be in the US, then this more or less covert advice to tip less as a way of saving money is pretty nasty.
Most of us on the left are against tips altogether. It’s why we tend to think the entire concept of a tipped wage under minimum wage is total bullshit. It’s just that not tipping while the current system is in place is basically the exact worst way to oppose tipping.
There is no “liberal media”. The mainstream media spectrum runs from “rapacious corporate media” to “raving neo-fascist media”.
The only reason anyone thinks CNBC is liberal is because the Overton window has moved so far to the right that anyone who rejects genocide is a considered a centrist.
From what I gather, up until the 1920s the process of tipping at restaurants in America was considered undemocratic, un-American and a flagrant attempt to buy better service than other people get with bribes. It was only because restaurants began to suffer during the Great Depression that unscrupulous owners started asking the staff to accept tips from wealthy patrons in place of the wages they were unable to pay, and a whole new culture of noxious capitalist exploitation was born.
It would be interesting to investigate whether immigrant-run restaurants – of which there are generally an awful lot, given that providing exotic food is something most immigrants can do, and there’s a market for it – tend to do things better with regard to paying staff properly than US ones steeped in this toxic culture.
I suppose if you went out to eat for lunch at work and stiffed the wait staff 2 bucks in tips you could save up around $400 but you would probably not want to go to the same restaurant all the time.
uncle frogy
Can’t help thinking replacing the word ‘tipping’ with the phrase ‘sending children up chimneys’ shows the flaw in that logic.
Hmm. Here the NBC channel is MSNBC, and in “Microsoft NBC”. Well, that and its actually owned by Comcast (which isn’t exactly loved), and has been known for shows like Morning Joe, which is “conservative talk”. But, seriously, just the association with Microsoft, a company run by someone that had the audacity to ignore his own humble origins, and that he built, if not always honestly, his whole business from having almost nothing, to claim, “We need really rich people like me, otherwise you don’t get big innovations!”, because, sure Bill, you started out with millions, and grew the company from there, and where not at all lucky to have started out during the tech boom of personal computing, and that has nothing at all to do with why Europe hasn’t seen the same boom from “innovations”, or been one of the sharks that has turned it, since then, into a copyright/patent filled swamp of litigation and greed… Nope, I can’t see a damn reason why any branch of NBC would push right wing BS, or nonsense justifications for stealing out of the pockets of workers. Not at all…
But, they are definitely “Democrat” – i.e., one of the sharks, who mostly tries to be liberal, until it effects their pocket book, and suddenly “liberal” becomes inconvenient for them.
CNBC and MSNBC are quite different channels.
Yeah, the insane amount of money you’d have to spend on eating out in order to “save” 400 bucks was the first thing that struck me. I mean we’re really not poor and we love eating out, but with a family of four we hardly spend 10% of that money on eating out, but “save 40 bucks in a year by being a miserly asshole” just doesn’t have the same ring to it, does it?
This “trick” of quickly using numbers that are either ridiculously high or that just look high ( I remember one of these “millenials waste money” articles that gave you the annual amount that people spend on “food, clothing and social life” which boiled down to about 8 bucks a day…) is pretty common and relies on people being bad at numbers.
+++
mond
Can’t help thinking replacing the word “cheese” with “depleted uranium” in the sentence “Cheese sandwiches are delicious” shows the flaw in that logic.
Seriously, serving drinks and meals is not in and on itself a dangerous job that will kill the people doing it. Nobody is against people working as waiters like they are against children sweeping chimneys.
But what happens if you decide that you refuse to tip in order to protest this fucked up system? Right, the waitstaff lose money. The restaurant owner isn’t feeling shit. But if 2 out of 10 people don’t tip the server loses 15-20% of their income. This may make waiting an unsustainable job after a while, but it does not magically feed the waiter’s kids or create a better job. You’re talking about a country with about no social safety net where people will still have to wait tables, or are you one of those Libertarian fools who think that well, ion the long run the market will fix the problem because all the waiters have frozen to death and now employers must offer higher wages?
Sorry to be pedantic but where did I say that I was against people working as waiters?
The comparison was with the practice of tipping not waiting tables
The origins of modern day tipping in the show that it is pure exploitation of labor by business owners who are only too happy to allow dinners et al subsidise poor wages. The market won’t fix it so the gov’t should ($15 per hour). Otherwise we can have this conversation for the next 90 years and nothing will change change.
CNBC is not MSNBC. You can’t repeat that enough. CNBC is something that even Fox rolls its eyes at.
I have a horrible thought that this will simply become “double the sales tax”. Nobody (especially a person who gloms on to “tips” like this) is going to remember things like “triple it in Maryland”. They’ll just wave their hands and pay less. I can’t do arithmetic in my head anyway. I can barely do the 20%. I’m not going to fiddle around with cheap nonsense involving backing out the sales tax and doubling it and adding it back in. Just round up till it looks reasonable.
mond, tipping doesn’t kill people either.
This works perfectly for me! Just went to lunch. It was $20 for the meal (splurged – it is Seattle Restaurant Week) and $2 for tax. Easy math $4 tip.
For civilisation to flourish there must be equitable exchange. Each person needs to specialise so that all the goods and services exist. But that means each person has gaps in what they produce that are expected to be fulfilled. Thats what makes it safe to specialise.
This trick for saving on tips is unilaterally renegging after the fact. A dastardly manipulation favoured by con artists like the current US president. You did your bit and can’t take it back. Now I decide what you get in return. Ha ha ha ha ha.
This is why I use adblock when visiting major news sites.
Oh, sure, people rolling in dough enough to spend 25K eating at restaurants could save themselves an entire $400 a year! But let’s look at the flip side of that, shall we?
Let’s suppose a given server at a given restaurant has ten customers per day who decide to try to follow this advice. Say they each decrease their tip by just $1 because they don’t want to be totally cold hearted. That’s $10 less she’s earning per day, $50 less per week, $2600 per year. If only three people per day heed this advice, she’s making $780 less at year’s end, or approximately a full month’s rent plus utilities on a 3 bedroom house shared with roommates, depending upon where on resides. This for an occupation which in some states is exempt from minimum wage– in NC, for example, one is allowed to pay one’s servers a mere $2.63/hr because it is expected that tipping will bring their wage up to minimum, and we wouldn’t want anyone in the service industry making more than half a living wage, would we?
So this money saving trick is, essentially, advice for incredibly well off people to give restaurant servers, who are already some of the lowest paid workers in the US, a few hundred or even a couple thousand a year pay cut while spending a year’s worth of mortgage payments on restaurant food that they’ll have to serve you with a smile or you’ll cut even more of their pay.
Both “channels” are owned by the same company. Which kind of makes one wonder why its only MSNBC that seems to “loose” people when they say/report something that the parent company doesn’t like… Its bad enough if I was 100% right, but.. if MSNBC is the “token liberal” of the channels that NBCUniversal owns, then isn’t that worse?