10. Very Few Careers Are Structured Like That

While other jobs do receive tips, not many other professions are as tip based as waiting

tables. There are a lot of jobs that are commission based, but that’s much different than being

paid through tips. Commissions are a structured amount paid out by the company. Tips, on the

other hand, are not structured or guaranteed. It’s just an unwritten rule that it’s

up to the customer to pay the amount they deem necessary. The restaurant doesn’t pay

the staff anything other than their minimum wage.

Imagine if we paid people in all fields that way. Would you want to pay your doctor in

tips? What about a home contractor? It’s unfathomable. So why are people who take orders,

and serve food and drinks that they don’t cook or prepare, paid mostly with tips? It

comes down to the fact that restaurants are notoriously risky businesses. 70% of them

that survive past their first year only stay open for three to five years. Tipping is a

way for the restaurant to minimize risk by not spending money on staff. And if a restaurant

is having a slow period where less money is coming in, it frees owners from the responsibility

of paying staff.

9. More Tax Revenue

When it comes to tax reporting, tips often stay off the books. It’s up to servers to

report how much they make so it can be taxed, but many servers don’t report every cent

they earned. It’s one of the benefits of being a server, although this “perk” is

quite illegal.

The problem is a lot of money is going un-taxed. For example, in Canada, $6 billion is left

annually in tips, while in the United States it’s $44 billion. While servers do report

some of their earnings, there’s so much that isn’t reported that in both Canada

and the United States there are task forces just to crack down on the problem. A fixed

income for servers would create more tax revenue, which would be less of a hassle for servers

because they don’t have the taxman tracking them down — and tax agencies wouldn’t

have to put money into fighting the problem.

8. The Price of Dining Out Wouldn’t Be Affected

One argument against getting rid of tipping is that people will be scared off by the high

prices on the menu. Which is ridiculous, because if a restaurant raised their prices by 15-20%

and eliminated tipping, customers would be paying the exact same amount. According to

some studies, a majority of people would actually prefer that servers receive a salary. And

servers receiving salaries isn’t unheard of. In places like Japan and Europe, they

don’t tip servers; all the costs of running a restaurant, including salaries, are factored

into the price of the food.

7. Less Turnover

A big problem that restaurants deal with is staff turnover. If servers aren’t happy

with their tips, they can look for greener pastures elsewhere. The problem with the tipping

system is that servers can never really be sure how much money they’ll make. So if

they start a job and the tips aren’t at the level they expected, they may quit and

find another job.

Turnover can reflect poorly on the restaurant, and it’s important to never underestimate

the value of a competent and knowledgeable staff. The more training someone has and the

more comfortable they are doing their job, the better employee they’ll be. Also, if

a restaurant can offer potential servers stability and security, it may be more appealing. Finally,

if a server knows exactly what they’re getting paid, it might attract good servers who are

less stressed out, because they don’t have to worry about making enough tips to survive.

6. Better Dining Experience

When someone goes out for dinner, one question that’s often asked of the server is “What

do you recommend?” While we hope servers would give an honest answer, as a consumer

you have to realize that it’s in their best interest to suggest the most expensive item

on the menu. After all, they essentially get a 10-30% commission on whatever the diner

chooses.

If they were receiving a salary instead of a tip based on percentage, they may be more

honest and you could try some new dishes. This would be beneficial to owners as well

— if a person tries the expensive meal and doesn’t like it, they may never come back

to the restaurant. But if they have a less expensive meal they enjoy, it could mean repeat

business. So is it better for an owner to have someone spend extra money on one meal,

or repeat purchases of a less expensive meal?

5. Misplaced Responsibility

Since 1991, restaurant owners can pay servers as little as $2.13 per hour if the tips make

up for the rest of the wage. That’s a lot of responsibility placed on the customer,

especially since tips aren’t technically considered mandatory. By keeping the minimum

wage for wait staff so low, people will feel more compelled to leave a tip even if the

service doesn’t warrant it.

It’s also a large burden to place on the wait staff. Let’s say a waitress works at

a terrible steakhouse. The owner is cheap, so they buy terrible cuts of meat. The kitchen

manager takes the steaks and freezes them. A month later, the chef thaws the steaks and

then overcooks them. The waitress, whose only job is to take orders and deliver food and

drinks, brings the overcooked, formerly frozen steak to the customer. The customer is displeased,

quite possibly vocally, to the waitress. At the end of the meal, the customer pays the

bill but doesn’t leave a tip. Everyone who had something to do with the restaurant and

the quality of food gets paid their usual wage and the owner keeps any profit, but the

server is left with only $2.13 from her hourly wage. That’s a major imbalance in responsibility.

4. Tips Don’t Affect Service

An argument that’s made for tipping is that if someone is working for tips, then their

performance earns them that that money. Therefore, if they want a tip, their service better be

top notch. But studies show that the relationship between tipping behavior and the quality of

service isn’t significant. People will leave their standard tip, usually about 15%, no

matter what the service is like. Even if the service is poor, 70% of people still feel

obligated to leave a tip. It’s common knowledge that servers make less than minimum wage,

and by tipping them poorly when you know someone is relying on that money to survive, a lot

of pressure and guilt is placed on the customer.

3. Makes and Keeps Servers Poor

There are currently only seven American states that require tipped workers to receive the

same minimum wage as other workers. Otherwise, servers receive just $2.13 per hour. There’s

been little change since 1991, even to account for inflation, while people are tipping less

than they used to. The economy has changed drastically since the booming 1990s. So when

people go out for dinner, knowing their own financial situation, and are given the choice

of spending an extra 5% to 30% on a meal, are they going to spend more or less? Due

to the fact that the minimum wage hasn’t changed while tips have decreased, servers

often find themselves living below the poverty line.

2. Tipping Makes No Sense

Many people don’t change their tipping percentage every time they go out. They generally have

a set percentage, and tip that amount almost every time. Herein lies a problem. Bruce McAdams,

a professor at the University of Guelph’s School of Hotel and Food Administration, gives

an example of going out for a bottle of wine with his wife. They’re celebrating, and

buy a $150 bottle of wine. The waiter opens the wine and leaves it at their table, and

they’ll pay him a 15% tip, which is $22.50. At the table next to them, another couple

orders a $50 bottle of wine from the same waiter, and they too leave a 15% tip, which

would be $7.50. Same server, same level of service, but the couple who spent more money

has to pay a higher service charge. And that’s counterproductive, because isn’t the goal

of a business to encourage customers to buy more stuff? Is there any other business that

forces people to pay a higher service charge for spending more money? In most other industries,

when you spend more you actually save more.

1. Tipping Can Be Racist, Sexist and Classist

Sadly, tipping is a double-edged sword when it comes to prejudice. Customers have a tendency

to show bias — for example, white servers tend to make better tips than black servers.

Also, attractive blonde women tend to do very well in the tip department, even if the service

isn’t as good.

Customers aren’t the only ones to show their prejudices. Servers may have a bias against

customers of certain races or social classes because they think they won’t tip well.

Servers might not treat those customers as well and may even hurry them along, in the

hopes that they’ll leave and people who look more likely to tip will sit at their

table. It’s a self-fulfilling prophecy.

Sadly, another problem is that 80% of female servers report having been sexually harassed.

The harassment was even more predominate in states that had the $2.13 minimum wage, because

since the servers are so reliant on tips they felt they had no other choice than to take

the harassment. By eliminating tipping, it would eliminate the chance that these biases

could affect the server’s livelihood, and allow customers of any ethnicity, race, and

sex to enjoy their dining experience more.