Tipping has become a hot-button issue again lately. The confluence of raising minimum wages and the uncomfortable nature of tipping’s history has led to many major restaurateurs to drop tipping from their restaurants. This hasn’t gone the way that those business owners would have liked. There’s a lot at play here — from a deeply rooted cultural and societal norm to economic molds that are near impossible to break.
We want to take a step back and get a little perspective on tipping as a societal and economic practice (in restaurants). Is it something that deserves such a revered spot in our culture? Or is it time to move on to a better, more egalitarian system?
WHERE TIPPING CAME FROM
Overall, tipping as we know it today started out in Old Europe. The British started giving ‘tips’ around the 1500s for extra services at Inns for the cleaning staff and servers down at the tavern. It literally meant to give a small present of money. The French used a ‘gratuité’ (gratuity) for the same purpose around the 1500s. The Germans gave people bringing them their beer ‘Trinkgeld,’ which translates to drink money. The house got the price of the beer, the server got the Trinkgeld. What we’re saying here is that tipping goes way back.
Interestingly, tipping was not a part of the American psyche at all for the first 100 years of the nation. Americans largely viewed tipping as something the hierarchy of the Old World gentry class partook in. It was looked at as a way to bribe people to get something better or more. It was an unequal advantage. It was British and we’d thrown that yoke off. It’s was wholly un-American.
That all changed when African slavery ended. That monumental event coincided with the explosion of rail travel. Railroad tycoon George Pullman spearheaded sleeper car train travel that required porters, servers, and concierges on the trains as the barreled from coast to coast. Pullman decided to staff his trains with freed slaves without really paying them. Instead, he suggested a system where the payment to the staff fell upon the passenger. Amazingly, being a Pullman Porter, or a ‘George’ colloquially, was a success (within the context of a fundamentally racist system) and almost single-handedly kick-started the black middle class in America.
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Cut to the 1920s. By that time tipping had actually been outlawed in six states. Mostly due to the ravings of the Anti-tipping Society of America. It’s easy to say that a lot of this came from the initial hatred of tipping in pre-Civil War America. But the truth is that it was more racism in a racist country: Tipping being almost exclusively an interaction between black and white Americans, there was a segment of society that didn’t want to feel pressured to tip black workers.
Then Prohibition came along and changed almost everything about America. The service industry was nearly destroyed by their inability to (legally) sell alcohol. Restaurant managers literally couldn’t pay for both inventory and staff. So hotels and restaurants adopted the Pullman Porter system and stopped paying their staff with the promise and insistence that patrons leave tips. Then the Great Depression happened. That economic nosedive solidified the need for service industry staff to be paid in tips as a more direct form of economics. And, for the most part, we haven’t looked back.
Ironically, after World War II while the British were reevaluating their society and largely leaving the gentry and their ways behind, they also abandoned tipping. So, today, the country where our initial hatred of tipping was born is the one without tipping, while we’ve embraced it to the nth degree.
WHAT’S CHANGING TODAY
The demand from service industry workers has paved the way for many restauranteurs to reevaluate their internal policies. Over the last few years, restaurant workers have led strikes where a $15 minimum wage was the heart of the matter. People wanting a living wage is not that difficult to understand — we need to pay rent and go to the grocery store to feed ourselves even now and then after all. And seven or eight bucks an hour just isn’t cutting it anymore.
Let’s get one thing out of the way first. The argument (from any American) that tipping makes them uncomfortable or that someone’s wage shouldn’t fall on the customer needs to go. This is the system that has been in place for over 100 years and by entering into the service industry for a service, you’re explicitly agreeing to its predetermined terms. Don’t be Mr. Pink.
Okay, now that that’s out of the way, let’s dig in. Thomas Keller was one of the first big-name restaurant owners to shift away from tipping and into an increase in menus prices and a mandatory service charge for private dining all the way back in 2005. That last bit got Keller’s highly-acclaimed Per Se in trouble ten years later when the Attorney General of New York forced Keller’s company to pay employees $500,000 it gleaned from those private dining service charges.
And that’s where and why things get tricky. There are a lot of laws on the books in every state that controls how tips are calculated as part of wages and that includes ‘service charges.’ It’s not a willy-nilly prospect because tipping is so deeply ingrained in our culture that it has become a direct form of economic exchange that’s enshrined in labor and tax laws state by state and federally. So, getting rid of tipping isn’t as easy as just, well, getting rid of tipping. As Keller learned the hard way.
Most recently New York restaurateur Danny Meyer has been at the forefront of the anti-tipping movement. He has famously eliminated tipping at most of his restaurants in favor of an automatic added gratuity or service fee or what’s being called an “H.I.” meaning ‘hospitality included.’ Basically, Meyer set up a system where every patron pays a set percentage no matter what, as part of the bill. That extra profit goes directly to the restaurant that then is able to increase the wages of its staff to make up for them not profiting from tips that they earn.
Meyer touted this new system as something that’ll make the wages of the front of house and back of house more equal and that his front of house staff (the ones that rely on tips) wouldn’t see any difference in their yearly take home.
Unfortunately, that has not been the case. According to an in-depth report published by Grub Street, Meyer’s restaurants have seen an exodus of seasoned staff over the last year. The worst case was at Meyer’s Maialino where the entire front of house staff turned over twice after the new H.I. program was implemented. This has led to woefully under-trained staff and thereby poorer service and, then, even more seasoned staff bolting. That coupled with several former members of staff who have reported weekly drops in their salary of $100 while others have reported that their yearly salary dropped by $10,000 equates to drama and dissatisfaction. Moreover, profits for the restaurants on a whole have taken a nosedive. Servers and bartenders no longer have a reason to up sell the menu, so patrons are ordering less — a lot less.
The biggest problem was that the staff felt jilted and lied to. Danny Meyer went on national television and stated, “The waiters at our restaurants, when we eliminate tipping, will make as much or more, in 75 percent of cases, than they’re making right now.” That fuck up primed Meyer’s employees for a reality that he just can’t deliver. Largely, because Meyer didn’t foresee that business would decrease. He was basing his math on business as usual — which was a huge, hubris-based error.
Meyer isn’t alone here. Gabriel Stulman, Tom Colicchio, and Joe’s Crab Shack are probably the biggest names who’ve tried doing away with tipping and had to revert back to the old system.
WHAT’S NEXT?
It’s hard to talk about tipping and not highlight that it is 100 percent sexist and racist. Your hair color, body shape, personality, race, and even the time of the damn day effects how much servers get tipped. Attractive women who flirt get tipped more than anyone else. Studies have found that female servers who simply put a flower in their hair increased their take-home tips by 17 percent. Which, on the surface sounds so stupid. Are we really that programmed? In other studies of tipping, patrons increased their tip based on the server simply writing ‘Thank You’ on the check or including more mints than usual. Based on that you can make your own conclusions here.
Overall, a lot of our tip-info is anecdotal. Yes, attractive women can get great tips, but so can a fat dude who is amazing at his job. At that’s kinda the point of the service industry — anyone can be great at it and make a living wage. In fact, part of why wait staffs often fight for tipping seems to be anecdotal too: Do you really want to give up the possibility that Johnny Depp might show up in their section and make their year.
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We’ve had 100 years behind us of a service industry that’s based on a human connection with another person who uses their largesse to guide us through an eating and drinking experience. For that knowledge, we’ve been trained to pay them extra for their effort. Of course, this doesn’t hold true in every single service industry interaction. Nothing is black and white in this world. And the service industry, like all things, lives in the gray area where there are multiple truths. Yes, tipping has a shitty history in America. But it also saved people from economic ruin — multiple times. Yes, some waiters are better than others at upselling you on that extra margarita or that $50 steak. But it also means you are getting something great, the server is getting a bigger tip, and the restaurant is making more money. Yes, we can pay our service industry workers more (especially the back of the house). No, we don’t have to have it one way or another with tipping and the minimum wage.
As with all aspects of life, tipping is going to be constantly evolving. It’s a $42 billion per year part of the economy in America alone. Meyer and his New York cohort’s attempts to break the system are valuable lessons that’ll inform the next evolutionary step we take in the service industry. We’re all learning together. But, as of now, tipping doesn’t look to be going anywhere anytime soon.
