Ezra Klein, who I think is generally a fantastic read, has a post up about tipping. The main perspective is that tipping is stupid, and we should just pay more for stuff so that people get a livable wage. The really relevant passage is this:
Rather than simply paying a price that reflects a fair wage for their work, I’m instead laying down a voluntary sum and hoping others do the same. It’s a wage model that’s reliant on charitable donations enforced through social pressure, and in that way, a little demeaning. I think I’d feel less guilty about the interaction if I knew they were being paid fairly, and it wasn’t part of their job, in theory, to vary their performance to my whim so that I might leave an extra dollar. Now, most folks in tipped professions don’t seem to vary their service to ensure the tip, and I don’t seem to vary my tip to reward service, and so we’ve hit some rough equilibrium, with the byproduct being I have to pull out my tip calculator at the close of each meal.
I had a pretty long post worked up over this whole thing, but I realized I don’t need to spin the wheels so much (brevity is something I’m working on). I work in coffee, so my perspective is based on that. Basically, to eliminate tipping and pay a barista what they make in tips and base pay, drink prices would have to be raised by around 40 to 50 cents per drink, and that assumes the same sales volume, which given the size of the price increase necessary is a pretty bad assumption. The article Klein references from the NY Times Magazine mostly discusses a restaurant that eliminated tipping, but added a standard 18% service charge to orders. That is no different than allowing people to tip, it simply changes the how the tip is made.
The real cost of eating out, or drinking out, or doing anything out in a place where you are being served, is disguised by the practice of tipping. I think of tipping as less a commentary on social norms than as a psychological mechanism relied upon by owners and managers to avoid paying service employees real, livable wages. That’s part of the problem: at least where high-volume, low-cost enterprises are concerned. At places like, say, Denny’s or Chilis or Starbucks, the point is that the low-cost, non-artisan level food service relies on mostly unskilled workers that are easily replaceable. It doesn’t matter to Chilis if one of their waiters refuses to wear the appropriate flair and they have to be fired, there’s someone clamoring to work for the crap wage and the high tip volume. The job sucks, though, that’s for sure.
However, nicer restaurants and nicer coffee houses pay their employees better relative to the rest of the industry (I should probably find some statistic about this, but I’m fairly certain it’s a fairly accurate thing to say. I think it’s true in part because of my actual work experiences, but also because owners of high-end places are more discriminating in who they hire, which leads to the need to attract the right people, which leads to higher pay to get those employees). That means, of course, that the true cost of the food or beverage is not as hidden — although it still must be to some extent.
The correct analogy here can be found in Michael Pollan’s recent article in the NY Times Magazine, which is an open letter to the next president. In it, he argues that food policy must be a major concern. Pollan’s argument (and it’s not so much argument as obvious truth) is that the industrialized agricultural system has hidden the true cost of food, much as tipping hides the true cost of labor. In the case of industrial agriculture, we have to deal, in part, with the subsidies that make corn and soybean so cheap to sell, when, in fact, they cost much more. There is much more in Pollan’s article, and I highly recommend you read it.
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