There is no case against tipping, except by people who are too cheap to tip.
The “wonks” over at Vox wrote this piece on how tipping perpetuates racism (yes, they’re beyond parody), classism, and poverty–and it should be eliminated.
The post is summed up thusly:
- Tipping lets employers off the hook
- Tipping is undemocratic
- Tipping doesn’t do what it’s supposed to do
- Tipping is discriminatory … and it might be illegal
- Tipping might be psychologically harmful
- Tipping is not really charitable.
Here are four reasons why Vox is wrong.
1. Tipping frees up capital and employers are still “on the hook.”
The author attempts to elicit sympathy by noting that the minimum wage for tipped employees is $2.13/hour in “most states.” That isn’t quite accurate, because more than half of the states require a wage payment that is higher than the federal tipped employee minimum wage. Some states, like New York, require that a tipped employee make more than the federal minimum wage regardless of the amount of tips collected. Other states set the minimum wage for tipped employees at the same rate as non-tipped employees (including Washington, Oregon, California, Nevada, Montana, Minnesota, and Alaska).
Also, employers are required to pay Social Security and Medicare taxes on tipped wages, so saying that employers are left “off the hook” in a tipping system is pretty ridiculous. The harder the server works, the more tax the employer has to pay.
Passing part of the labor costs to the consumer (via tipping) is a good way to free up employer capital to do other things, such as acquire inventory, hire more people to work, expand if the business is successful, etc.
Tipping is actually a cost-shift that the consumer can still get a tangible benefit from. A company selling widgets can pass on higher labor costs by raising the price of the widgets. A restaurant passes labor costs down to the patron–but the patron receives (in theory) quality service in return, and tips accordingly.
2. Yes, tipping is “undemocratic.” That’s a good thing.
When Vox uses the term “democratic,” they mean “equal” in the socialism/de Tocqueville sense. There is nothing wrong with inequality of wages when the differences are based primarily on the “hustle” of the wage earner. If you provide good service and get tipped more than someone who provides average service, there’s nothing wrong with that. The left appears to have a disdain for those who work hard and earn more than others in the same job classification. The problem is this: not all employees are equal, in terms of their job performance. Those who work harder should have something to show for it.
3. The “tipping study” relied on by Vox in support of its discrimination theory “tipped” its hand.
Vox suggests that black people don’t tip as much as white people. At the same time, the study notes that many Americans of all different races generally don’t know what the appropriate amount to tip is. Of course, the knee-jerk liberal reaction is “ban tipping.” Why not educate people on the etiquette of tipping and what is customary for good service? I see little blurbs on checks more and more often these days, listing the percentage amounts translated into dollars. Sometimes I need to check my math twice when leaving a tip. Could America’s math woes be the cause of inadequate tipping?
4. Tipping isn’t supposed to be “charitable.”
When you receive a product or service, you pay for it. That isn’t charity. Vox suggests that it is, and also notes that tipped employees are closer to the poverty line than other employees. No shit, guys. Like other minimum wage jobs, a waiter or bartender isn’t a lucrative career. It can pay the bills when someone is in school, or as a second job, for example. But as Amy Otto put it, minumum wage jobs are an opportunity–not a living.
What would a Vox post be without inaccuracies?
Bottom line: passing the costs of labor to the consumer in the form of tips is a good thing because it rewards good service and lets restaurant owners deploy capital in other ways. Making employees equal in terms of wages earned is a great way to de-incentivize hard work. This is antithetical to a free market.
As always, free markets are better markets.