Streams

A Modest Proposal: Ban Tipping

Tuesday, June 04, 2013

Freakonomics radio host Stephen Dubner discusses the recent episode that describes inequities in the way people tip.

Guests:

Stephen J. Dubner

The Morning Brief

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Comments [46]

Kevin T. from Walnut Creek, CA

This was the WORST radiolab I have ever heard, and clearly not a whole lot of thought was put into it. Do you realize how many jobs there are that exist ONLY because tipping exists? Even if you raise the price of food and raise the minimum wage, why would a restaurant have servers or delivery people? They're not needed positions to run a restaurant, and if you dole out wages how you propose, NO restaurant would ever pay for unneeded people. And maybe that would be good for you since it would limit your human social interactions you say you hate having but for many college students and other folks who NEED A JOB as unskilled labor because they cant find work in their field yet, waiting tables or delivering food is by far the most lucrative and hourly-flexible job anyone can have. Both of which are CRUCIAL for anyone who still needs time becoming skilled, finishing that degree, etc.

Oh and don't pretend like this podcast is to aid against discrimination among laborers. You didn't once suggest tipping should be stopped AFTER upping wages. You just gave every lister an excuse to ruin my ability to pay rent. What do you call that, Intellectual discrimination? HOW DARE YOU call yourself a bleeding heart liberal half way through the podcast and then come to this conclusion.

Jun. 08 2013 02:50 PM
G Pugh

A lot of people here seem to have trouble understanding the concept of 'averages'. The average doesn't apply specifically to you. You're just a single datapoint in a large population. Your anecdotal evidence does not trump a data average.

Jun. 06 2013 12:04 PM
RUCB_Alum from Central New Jersey

@Mr. Bad from NYC

Are you trying to be a d*mbass? I have 25+ years in IT. The fast foods part was a job I took during the recession of '78-'80 -- which if you don't remember - had unemployment over 10%.

Trying seeing what people say rather than what you want to see.

Jun. 05 2013 11:07 AM
Mr. Bad from NYC

@ Donald J. Sepanek from Bayonne, NJ

LOL, Don't hold your breath waiting on that info. Only true Scienticians like Mr. Dubner can make heads or tails of that vast data set, it's probably classified Super Top Secret. "Top Men", eyes only type stuff.

Jun. 04 2013 05:03 PM
Donald J. Sepanek from Bayonne, NJ

Where can I find this "tip research"? Where is it published?

Jun. 04 2013 04:23 PM
Mr. Bad from NYC

@ RUCB_Alum

160+ huh? Is that on a sliding scale? That still very good for a guy whose experience is primarily in "fast foods". So, RUCB, is that what they're calling McDonald's University now?

Jun. 04 2013 03:44 PM
Doug

Doesn't banning tipping but a burden on restaurant owners in the form of employee cost? I'm not saying it's a bad thing but I've heard restaurant business it tough and seen many go out of business because of small margins, wouldn't this be pretty hard to implement? It's easy enough to say "raise your prices" but what if the guy next door doesn't?
Now your $9 burger looks worse than his $6. And the cheap guy goes there so he can leave the $1 tip and be ahead $2

Jun. 04 2013 03:41 PM
Doug

Tipping is always going to exist, that's kind of the problem.

However I like the idea of eliminating it from people's judgement, such as preventing cheapskates from screwing waitresses by giving 10% instead of 20% that I find acceptable.

Jun. 04 2013 02:40 PM

@Anna

We are essentially on the same side of this issue but the averages do out. That's why average pay for Americans still rank in the following:

White male
Asian male
Black male
White female
Asian female
Black female
Latino female
Latino male

@jm...I wasn't offering a counter-factual. I was asking Anna a question - In her estimate, would she be tipped better if she were in all those preferred types. She doesn't think so.

I've had jobs -- from paperboy to bartender -- where service delivery mattered very much in how much you earned. Most of my food service experience is in fast foods where tips don't count.

If I had twenty more IQ points, I'd score 160+. How about you?

Jun. 04 2013 01:52 PM
Anna from Brooklyn

Sorry - I misspelled publicly. I don't know why I typed publically. My bad. It's not because of my race, I just type very phonetically when I get riled up.

Jun. 04 2013 01:36 PM
Anna from Brooklyn

To RUCB_Alum :

Do I think that if I were white, buxom and 30 something I would make more tips?

Absolutely NOT!

One of the MOODIEST people on our staff is all of those: blonde, totally buxom and in her mid thirties. By this report, she's got a head start on everyone for the tips grab, yet she always brings her miserable drama to work EVERY SHIFT. I know I coax better and bigger tips, and several of her customers have migrated and brought their tips and money to MY nights! For ME! It's about connecting with people & doing your job, not race.

Maybe I've lived a charmed life, but I HATE being defined by my skin color for any reason. Yes, I've experienced racism on many levels.. personally and publically - but I am confident about my performance in my job. I am good, I am an asset to the bar and I make bank. I do not want to be pitied or part of any movement that feels that equalizing things across the board creates a sense of fairness, especially on skin color because there are TOO MANY other variables why someone isn't getting tipped. There are challenges in everything, and you bet I believe in winners and losers. Working as a server in NYC is a hard job, and I hope I'm not doing it forever, but it teaches you your strengths -- all of which I bring to work every time I go in. Yeah, I have my bad days too, but I will take on any buxom blonde 30-something behind any bar, ANY DAY.

Jun. 04 2013 01:33 PM
Anna from Brooklyn

To RUCB_Alum :

Do I think that if I were white, buxom and 30 something I would make more tips?

Absolutely NOT!

One of the MOODIEST people on our staff is all of those: blonde, totally buxom and in her mid thirties. By this report, she's got a head start on everyone for the tips grab, yet she always brings her miserable drama to work EVERY SHIFT. I know I coax better and bigger tips, and several of her customers have migrated and brought their tips and money to MY nights! For ME! It's about connecting with people & doing your job, not race.

Maybe I've lived a charmed life, but I HATE being defined by my skin color for any reason. Yes, I've experienced racism on many levels.. personally and publically - but I am confident about my performance in my job. I am good, I am an asset to the bar and I make bank. I do not want to be pitied or part of any movement that feels that equalizing things across the board creates a sense of fairness, especially on skin color because there are TOO MANY other variables why someone isn't getting tipped. There are challenges in everything, and you bet I believe in winners and losers. Working as a server in NYC is a hard job, and I hope I'm not doing it forever, but it teaches you your strengths -- all of which I bring to work every time I go in. Yeah, I have my bad days too, but I will take on any buxom blonde 30-something behind any bar, ANY DAY.

Jun. 04 2013 01:33 PM
jm

I can't imagine this issue will be resolved any time soon, given all the restaurant cuisine, price point, customer demographic/regional, business expense, etc variables. However, it's beneficial to highlight awareness of those who may not be paid the same as you are.

I waited tables long ago, and then again recently to take a break from my office jobs (it was agreed upon with the owner, so I didn't misrepresent my intentions). As far as foreigners, in the past I always treated them well knowing that they might not leave a tip, but hoping they'd read the guide books. Now there are really no excuses for foreign tourists' ignorance of American tipping customs.

On racism, I wonder if the discrepancy is more common among other regions and socioeconomic groups? I'd assume it wouldn't even occur to a New Yorker to tip less based on race, especially in the type of trendy environment Anna describes. Sadly I've lived in other areas of the country where racism is more common (even if it's on a subconscious level).

While doing away with tipping might not be the solution, perhaps it's worth examining alternative algorithms depending on the scale of the establishment, along with tax expectations and the other noteworthy prejudices that are unrelated to actual quality of service. For instance: what about the server with an above-average knowledge of wines who can recommend the perfect modestly-priced bottle, as opposed to the server who happens to be on the end of a business lunch transaction requiring little work of pairings, but is the recipient of an order with only the most expensive bottles for the purpose of showing off? Regardless of both servers' skills and the fact that neither's customers must tip by law, they're still going to be taxed by the IRS on the total of the bill (more so if the bill is paid by CC). Generally this works out, but if you put your heart and knowledge into a very positive customer experience or just a high bill and then cheated out of a tip, how is this legally justified? The hope that it "works out" in the majority of transactions isn't a tangible system, but one based on hope.

Also consider that many restaurant workers either lack employer-based health insurance, or don't make enough to afford individual policies. Hopefully the ACA will help, but in the meantime those who think they're "beating" the tip system or lower restaurant prices still pay...in the form of restaurant workers who must use the ER.

I admit I've benefitted from my slim figure, and my overall physical appearance isn't beastly. Of course, that might be cancelled out by the higher tips of men in general. I also don't have giant breasts; I'm almost amused by the fact that arbitrarily-placed fatty deposits on my torso would determine the amount in my bank account. Some evo-psych nut might argue that larger breasts give the impression of more milk for potential offspring, but it's not as if I'd be feeding the customer directly from my breast!

Jun. 04 2013 01:09 PM
Mr. Bad from NYC

@ RUCB_Alum

"Do you think you would earn more in tips if you were a buxom, white, blonde in her thirties"

What if you had +20 IQ points, could you have come up with a more inane counter factual?

It's not about averages unless you control for all variables. Who is it that is going out to dinner? or to get drinks? Who has the disposable income to do it and whom do THEY identify with, personally? How broad of a cross section of service employees did they survey... you have no idea, probably just upscale places where tourists come and go.

Personal preference isn't always race based ya'know? The problem isn't tipping, obviously, it's racism in our society and lack of economic opportunity. Nobody wants to wait tables their whole life, it isn't a "career" choice except in NYC or maybe LA, and very few people make that choice.

It's where you end up when you can't get a better job or when you're transitioning to a better position. A happy, forward looking NYU drama student p/t waitress will have more energy to put forward than a 35 year old single mother struggling to get by and working a double. Do these "qualitative" factors have any bearing on the results or are they completely ignored? I think the latter.

Jun. 04 2013 12:29 PM

@Anna from Brooklyn

I think the station handle the segment well. And Dubner's explanation of 'preference' and its more insidious side was enlightening.

True or false - Do you think you would earn more in tips if you were a buxom, white, blonde in her thirties?

It's not about a particular counter-example but about averages. Though, I wouldn't mind to hear you interviewed on the air. You sound like a pistol.

Jun. 04 2013 12:15 PM
Joe from Brooklyn

As a frequent world traveler I find that yes, in general restaurant service is better in NYC than say France (no French waiter will ever put a check on your table while you are still eating or even finishing your coffee...), because of course servers are motivated to get customers in and out quickly (sometimes too quickly for my taste), as well as sell more food drinks in order to increase tip amount. However, there is a cultural aspect to this as well. In France, a longer mealtime is part of daily life and encouraged, as it is the cultural norm to take a longer lunch, or dinner for that matter. In Japan the service is incredibly high and part of the social fabric. and anything less than that for them would be unacceptable.

Jun. 04 2013 12:14 PM
Martin Chuzzlewit from Manhattan

Anna-

That's the spirit!
Please come and work at a restaurant near me ..... you're hired!!!!

Jun. 04 2013 12:14 PM
Anna from Brooklyn

OH MY GOD.. this discussion is making me sick. THis reporter should have done better research and worked at least a MONTH in a restaurant or bar before he came on here spouting his "facts" and statistics for a proposal of banning tips. He is so removed and has NO CLUE about industries that have tipping. I don't think I've ever seen anyone come into my bar and have a problem with my brown skin serving them their favorite drink. He is selling New Yorkers short, sell minorities short. I'm black, I make awesome tips, and I don't need anymore WNYC generated pity for my race or skin color based on the stats of some singular "expert". There are different results in different places and I make good money because I am super good at what I do. I like my job and my customers and they adore me and come back every night I'm working. Oh, and by the way: the best tippers are people who work in the industry, PERIOD, rich or poor be damned. I had to turn the radio off during this report.

Jun. 04 2013 12:05 PM
Mr. Bad from NYC

So fat people, ugly people and minorities make less $ in tips compared to attractive white men and women. Is this news? Is there ANY industry or line of work where this in NOT true?

In other mind-blowing science news the earth is round (oblate spheroid) and sky is (as perceived by the human eye) blue.

Jun. 04 2013 12:04 PM
becky from nyc

Correction! Tips are taxed!
Waiters oft times have to pay to wait on cheapskates. The food & beverage sales in establishments I've known are tallied per wait person. Their taxes are tabulated on consideration that they earned 15% in tips from these sales.

Also would like to have heard more about this scientific survey on the tip scale demographic please.
Thank you Brian as always, look forward to your thoughtful & fun program.

Jun. 04 2013 12:03 PM
Amy from Manhattan

How much I tip depends mostly on how well I'm doing economically, & since I'm a freelancer, that varies. I base my tip on 15% or 20%, round to the nearest 50 cents, & add more if the server went beyond basic service. (If I'm not doing well enough to tip 15%, I'm not likely to be eating out in the 1st place!) I *hope* my perception of how good the service was isn't influence by the kinds of factors Mr. Dubner listed.

Jun. 04 2013 12:00 PM

What's the difference between tipping and end-of-year bonuses? What if the Wall St houses adjusted salaries DOWN to take bonuses into account? How many quants would put up with that?

What is difference between tipping and a 'performance' bonus?

Jun. 04 2013 11:58 AM
Brian from Hell's Kitchen

Great topic. I am a career server, now restaurant owner. The idea that tips are un-taxed is out of date. Any tips that are on credit cards are taxed, which is a huge percentage of tips. The IRS has cracked down on cash tips in some places, too.

That said, I wish we didn't tip in our society.There is no correlation between tipping and quality of service.

Re: minimum wage,my servers make $5/hr minimum wage, but over $30/hr overall. Why should they get the extra $5 at all?

Jun. 04 2013 11:57 AM
Mr. Bad from NYC

No correlation between quality of service and tips? How is that measured? How would you measure it? Way to completely gloss over the most important data point. People "self select" when reporting satisfaction with service, it's a fact and you can't control for it. This is just more stupid pop science pushing PC and political biases.

Jun. 04 2013 11:57 AM
REM

I used to waitress at a breakfast place. Tips were fine during the morning rush, but if you were unlucky enough to have to stay through the slow afternoon shift, as I often was since my manager wasn't particularly fond of me, then the average hourly income for the whole shift was lowered significantly. It was a summer job I could get by on, but not much else. Also, customers had zero appreciation of the fact that we were required to tip out to the bartender, hostess and the guy at the front door.

Jun. 04 2013 11:57 AM
Victor Swenson from Summit NJ

Heres a great tip...Don't bet on the horses.

Give me a break. Doesn't this guy have something better to study. Really big breasted women get bigger tips. did her get his doctorate studying this.....

Jun. 04 2013 11:56 AM
MichaelB from Morningside Heights

Yes, I was just about to mention ... what if you get lousy service? What if your waiter or waitress is hostile or condescending? Or if you have to constantly be looking for him or her?

Jun. 04 2013 11:55 AM
Adam

I think that it is part of our American identity that we keep parts of our economy entirely arbitrary and chaotic...

Jun. 04 2013 11:54 AM
Anna from Brooklyn

These are generalities. I am an African American server on a staff of all white, young actress types at a trendy lounge here in NYC and I have my regulars. I make just as much if not more than they so for SO MANY REASONS that are NOT based upon my skin color. I hustle, I am good about anticipating my customers needs, I am fast, funny, cute and my work ethic is FIERCE. I GET NEW YORKERS, and that's why I do well here. I am so SICK of WNYC always reporting about how blacks are victims all the time. Why don't you report on people like me?

Jun. 04 2013 11:54 AM
Sally from Sussex, NJ

What about continuing tipping but giving customers a tool that will allow them to really consider how much they want to tip and why, as well as let the server know what is expected of them. A little piece of paper to allow the customer to calculate a tip based on the following suggested parameters: speed of service, friendliness, drink refills, etc. The customer still has the choice to tip however he or she wants, but if the customer has a prompt to really think about WHY he or she is tipping an amount, he or she may be more likely to make a more objective, fair decision based on merit ratehr than bust size.

Jun. 04 2013 11:54 AM
Truth & Beauty from Brooklyn

I do not think that tips should be included in restaurant tabs. Tipping is a way to show appreciation for good service. Giving tips for poor service is of no advantage to anyone.

Restaurants should just raise the wages of servers to at least the minimum wage.

Jun. 04 2013 11:54 AM
Edward from glen cove, ny

owning a restaurant, if I had to pay my staff what they make in tips, I would have to charge about 20 bucks for a tap beer, about 35 for a hamburger.

Jun. 04 2013 11:54 AM
Truth & Beauty from Brooklyn

Notwithstanding the below-poverty-level wages of restaurant servers, tipping is, above all, a way to show one's appreciation for a job more than well done.

I work in an office - a position for which tipping is basically unheard of - yet I have occasionally been very well tipped by assorted individuals if I go above and beyond in assisting them in various ways (relating to office work). Although I feel awkward accepting such tips, it is a substantial way to say thank you.

In the "me me me me me" era in which people are more focused on themselves and their electronic toys, it is refreshing that some people do take the time to say thank you. If they feel that in certain circumstances it is appropriate to say "thank you" in cash, then so be it.

Jun. 04 2013 11:52 AM
Sheldon from Brooklyn

I never got the impression that blacks got less than whites in general.

There are so many other variables: Attractiveness (bummer), PROFESSIONALISM, Empathy, attentiveness, charisma...

Jun. 04 2013 11:51 AM
Wally from NJ

This is completely idiotic. I have been an upscale waiter for a long time in NJ, and servers get paid 2.18 per hour, so all of our income is from tips. If restaurant owners had to pay us a wage that was equivalent to what we make in tips, they would go out of business.

Jun. 04 2013 11:51 AM
Nat from NYC

In Japan there is no tipping, and at the same time stores and restaurants always have plenty of staff and service is excellent. I asked my cousin who lives there how they do it. His reply: they don't put 20 percent of their federal budget toward defense spending. So there's more money in everyone's pockets, and they use that "extra" money to ensure that those in service jobs are paid a decent wage.

A living wage for all -- that's what we need to do.

Jun. 04 2013 11:51 AM
Amy from Manhattan

Tipping should be banned only if people in jobs where tipping applies are paid enough to make a decent living without tips. And they should.

Jun. 04 2013 11:50 AM
Peg

Do waiting personnel discriminate against and give poor service to diners from other countries who they 'assume' will be poor tippers?

Jun. 04 2013 11:50 AM
Anonymous from Manhattan

DAMN, racism in tipping??? Sad about this world or is it just in this Country?

Jun. 04 2013 11:49 AM
Sheldon from Brooklyn

I usually tip 20% of the entire bill at a sit down restaurant.

My problem is, the now ubiquitous counter tip jar at pick up/take out restaurants. I even saw a tip jar at a bodega once.

There is a tip jar at Manna's in Harlem - a buffet restaurant. Yes, one is expected to tip for the pleasure of serving themselves?

Jun. 04 2013 11:46 AM

@jf from reality

"Tipping can be banned if minimum wage is the same as it was in 1965 $1.35 in 1965 adjusted for inflation = about $23/hr"

Say what? More like $10.... Go check...http://www.usinflationcalculator.com/

Your numbers may be right when compared to the amount of goods and services commanded by the wages - wages to GDP ratio - but is definitely not accurate re: inflation.

Jun. 04 2013 11:41 AM
hk from manhattan

I love the idea of banning tipping because I feel like it just allows employers to pay such low wages to servers. The employers should be responsible for providing decent wages, or shouldn't be up to the goodwill of the consumer which is so unfair to servers. I used to waitress and too much is our of your control; if the kitchen is to busy, if the table next to theirs is too loud, if they are just in a bad mood, there are so many reasons people don't tip don't tip well and a servers income shouldn't be dependent on that. The employer just increases their profit margins at the lowest earners expense.

Jun. 04 2013 11:28 AM

So what rate of pay is 'fair' for waitpersons? I think the tendency to tip white servers higher than minority servers is a reflection of the supposed value of that person. Hogwash, I know, but a barometer of how our minorities are regarded. Does the same differential hold for housekeeping/cleaning services? Do the Polish ladies get bigger tips than the Latino ladies?

As a 50-something, I have lived through the increase in tipping rates from 15 to 20%. I tip 20% when dining out but only on the food and non-alcoholic drinks. I do not tip on alcohol - the mark-up is considerable and do not feel it is reasonable to tip on that and I never tip on the sales tax. Thus a $200 total bill would probably only get a $29-$30 tip. Probably makes me seem like something of a cheapskate but I'm old enough not to give a flip!

I tip a flat $2 on pick-ups and $5 on deliveries.

I HAVE noticed that tip amounts that I put on the debit card are OFTEN not included in the withdrawal to my bank account. I presume it is because the establishment does not know how to process the TIP portion of the charge. I hope the servers are getting their cut - I clearly show the TIP and TOTAL that I agree to pay. If the owner is eating it because they don't process the charge properly, I don't worry so much about.

Tipping rates are a function of the households propensity to spend. Knowing how much and whom to tip is another one of life's barometers...This one shows how likely you feel you are to earn your next buck. Anyone who has read my posts in this space already know that I think the distribution of income is the prime culprit in changing the face of American culture. We fix that and tipping takes care of itself.

Jun. 04 2013 11:28 AM
asdf

Has anyone crunched the numbers on the relationship between use of debit cards and level of tipping, esp. for small bills, Starbucks for example?

I am more likely to toss 50 cents or a buck into a cup than I am to remember to have some small bills in my pocket solely for tipping. For businesses that rely on tips to compensate their workers, this issue could easily be solved by redesigned invoices that feature or include tips in the bill.

Jun. 04 2013 11:10 AM
This better be good

"Black waiters get lower tips from both white and black customers."

How bold of your madcap radio professor to introduce race into a discussion about behavior at restaurants regarding race and waiters.... Any current or ex-waiters, of any color, have an opinion or two about race and tipping?

Jun. 04 2013 11:06 AM
jf from reality

Tipping can be banned if minimum wage is the same as it was in 1965 $1.35 in 1965 adjusted for inflation = about $23/hr

Jun. 04 2013 11:05 AM

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