Signs of the Times - Where Does Your Gratuity Go?
July 2003
Political Economy: Where Does Your Gratuity Go?
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In the nameless metropolitan region where I spent many of my adult years, the outstretched palm ought to be a part of the city seal. A tip is the expectation of the taxicab driver, parking attendant, car-washer, skycap, disco bouncer, doorman, delivery driver, barber, shampooer, shoe-shiner, trash hauler and of course, restaurant staff.

And, in a restaurant, not just the waitperson, but, for establishments of any degree of pretension, the maitre d'hôtel, the sommelier, and the coat-checker are all to be thanked in cash as well.

Here in the land of softer edges and the powdery residue of Southern gentility, an element of aristocratic condescension enters in to any service transaction. (In a real aristocracy, we would be the ones bobbing our heads and lifting our aprons, but in the fantasy we've created, we are each permitted to be the aristocrat.) It's not about the money, you understand.

Alexander Cockburn's formulation is classic: "Hovering somewhere between charity and a bribe, the tip is one of our most polymorphous social transactions. At its most crude, it can be a loutish expression of authority and disdain. At its purest it can approach a statement of love."

In a Local Restaurant …

It's the end of a fine meal, and four of you are relaxing around the restaurant table, aglow with the feeling of well-being that comes from good food, served with just the right amount of personal interaction.

The check is requested. It lists totals for food, beverages, tax-and if you've used a credit card, that blank line for "gratuity."

Now, each of us has a personal tipping policy. We want to be able to show appreciation for outstanding service or send a message of disapproval for what we consider poor performance. And we don't want to be thought a knave for tipping too little, nor a fool for tipping too much. The others at the table are watching.

How much to tip, what to base the tip on and how to deliver it are all matters of exquisite nuance-and for most of us, exquisite uncertainty. There are sections in all the books of etiquette on the subject. There are books on the subject. And websites.

Associate Professor of Consumer Behavior

High above Cayuga's waters sits Dr. Michael Lynn of the Cornell University School of Hotel Administration. He is (it says here) the world's foremost authority on tipping. Having studied the subject all over the world, he offers advice to the restaurant industry, aimed at increasing tips.

Michael Lynn in Statler Hotel's Banfi's restaurant. Photo: Frank DiMeo, Cornell University

He suggests that the industry should begin a campaign of education about tipping basics. He urges the use of advertising, pamphlets to be handed to diners, perhaps even educational notices printed on the menu [Here's a suggestion: TIPMASTER GENERAL'S WARNING: Leaving an inadequate tip may be hazardous to the health of your server and the local economy].

Tippers: achievement-oriented, status-seeking, extroverted, neurotic and tenderhearted

Dr. Lynn's findings include the following:

"1) Tip percentages are only weakly related to customers' ratings of service quality in restaurant settings. … tips are poor measures of customer satisfaction with service and … provide weak incentives for delivering good service.

2) Nonverbal server behaviors that communicate liking for the customer, such as lightly touching the customer and crouching next to the table when interacting with the customer, substantially increase the tips restaurant servers receive.

3) Tipping is more prevalent in countries whose populations are achievement-oriented, status-seeking, extroverted, neurotic and tenderhearted. These findings suggest that tipping exists to serve several functions, i.e., to increase the social attention/esteem that servers give customers, to reduce consumers' anxieties about being served by others and to allow consumers to financially help servers." (Franklin Crawford, Cornell Chronicle, August 17, 2000)

Race Matters

In a fairly broad study Dr Lynn found a disparity between the races in tipping. For one thing, while just 30% of white respondents did not know that 15 to 20% is considered an average restaurant tip, over 60% of blacks did not understand it that way.

And white folks in the study were found to tip, on average, 16.5%, while African-Americans tipped, on average, 13%. We've tried to find out if this disparity exists in Charlottesville, but have only encountered shrugs and headshakes - no reported difference.

The notion of tipping is historic, folkloric and quasi-feudal. Restaurants could simply charge a reasonable price for their wares, pay their staff a reasonable wage, and be done with the whole issue.

One theory has it that tipping persists because we enjoy the (modest) feeling of control it gives us--we hope the waitstaff will be extra-attentive to our needs in hopes of a larger tip. If that's true, we should consider extending the practice to other areas of life where we'd appreciate a little fawning. For example, to academe.

 Our Founding Fathers were Good Tippers

George Washington According to a recent PBS Frontline show, "A slave might receive a tip for special services. In the spring of 1768, when George Washington left the home of his brother-in-law, Burwell Bassett, he was probably acting properly when he left fifteen shillings and nine pence for the "Servants," [$100 to 150 in today's money] who would have had extra duties to perform in caring for him or for any other houseguest." PBS puts servants in quotes because, not to draw too fine a point, they were slaves.

Thomas Jefferson According to Cinder Stanton, Shannon Senior Research Historian at Monticello, " TJ was a pretty good tipper…. Most of his tips were to ferrymen, postilions, servants at inns, and servants of friends at whose houses he was staying. When he was in Virginia, of course, most of the recipients would have been enslaved people."

Here's an entry from his journal, on leaving The Forest, home of his new father-in-law John Wayles, after his Jan. 1 marriage and its festivities.

1772 Jan. 18.
"Gave Ben at Forest 5/.
Gave Jamey 10/.
Gave Martin 2/3.
Gave Betty Hemmins [sic] 5/.....
Gave other servants 15/."

The number before the / is a shilling - in the middle colonies at that time, a shilling was very roughly the equivalent of $10 or so today, in buying power.

Meanwhile, Back at the Restaurant

So you settle up and add a tip - what happens next?

There are four ways your tip may be distributed:

  • Your server keeps it - wasn't that what you intended?
  • Tip Outs - your server voluntarily shares the tip, usually with an assistant server (they're often a team), and often with bartenders, cookstaff, and other backstaff (dishwashers, etc.).
  • Tip pooling - all the tip-receiving staff pool the money and divide it among themselves and other staff.
  • Tip sharing -- management collects all tip money, divides it according to a set formula, and includes it in people's paychecks.

Compensation for "Tipped Employees"

There's a Federal minimum wage for most workers of $5.15 an hour, but "tipped employees" are a separate category. The minimum for them is $2.13 per hour, as long as their average monthly income from tips will equal the $3.02 per hour that brings their total up to the federal minimum.

States have the ability to make wage policy, as long as they don't go lower than the Federal rules. Virginia presently follows the Federal guideline.

Problems and lawsuits have arisen when management has a policy that includes sharing tips with management. In September 2002, a federal court ruled that a New York City restaurant violated the Fair Labor Standards Act (FLSA) by requiring servers who were paid less than minimum wage to share their tips with other workers who were part-owners of the restaurant. Although the restaurant argued that its tip-sharing policy was a company tradition, a state court and an National Labor Relations Board judge had previously found the policy illegal. "A 'custom' that is illegal cannot qualify as an exception, for that would defeat the very purpose of the statute itself," the court said. (Chung v. New Silver Palace Restaurant).

Around the U.S., there are a few restaurants that simply pay everyone a reasonable wage and add a standard service charge (often 18%) to the check. Most of the places that we spoke with in the Charlottesville area do have a policy of adding the service charge for parties above a certain size.

Throughout Europe the service charge of 15-18% is standard--it is considered polite to add the 'breakage,' the difference between the bill total and the next even Euro (or whatever).

In Japan the western notion of tipping has been viewed negatively. Service workers are insulted by the idea that 'you would not do your best unless I offer you an extra incentive.'

A directly opposing view of gratuities is offered by Mark Brenner in his book, "Tipping for Success: How to Get In and Get Great Service." He says that tipping is not about the money-it's a way to show respect for the person performing the service. He was interviewed last autumn on the Tavis Smiley radio show.

 Personal Tipping Policy

Some years ago I and two others from my office were invited to lunch by the father of one of us--a courtly gent in a three-piece suit with a mittel-europen accent. A nice lunch.

The check arrived, and our host reviewed it closely. From a large billfod he counted out the cash for the tab, glanced up briefly to scan the table, and counted out four dimes additional--"one for each of us," he announced.

At this, the three of us exchanged meaningful glances. After we steered him out to the coat-counter, his son returned to the table surreptitiously and added substantially to the tip.

I later asked our host, in as neutral a manner as possible, about his ten-cents-each tipping policy.

"I was in the camps when I was a kid," he said, with feeling. "Then I was a refugee. I had nothing. What I've got today, I've got from my own work. I can't stand the idea of giving somebody a handout for just doing their job."

What do you think, and what do you do? Rey Barry tips 20%. Some authorities suggest tipping 10-12% for liquor, more for food. Do you have a set figure in mind, or do you vary the tip according to the experience?

Do you dread the whole exercise? Would you like to see the European system, with a percentage already added to your tab?

Are you now or have you ever been a waitperson or backstaff, with illustrative anecdotes to share?

Send your thoughts to george@loper.org. The most representative or interesting will be published, with full attribution.

 Some local restaurants and their tip-distribution policies

Fleurie
Brian Helleberg (Owner) tells us that Fleurie collects all tips and distributes the money in the bi-weekly paycheck--waitstaff get a larger share, backstaff the rest.

Rapture
Jeyon (Waiter - now shift mgr at MonoLoco) tells us that the waitstaff keep all of it - "we pitch in to help each other out, and I think it evens out - anyway, the cooks and backstaff are paid a lot better than we are."

Oxo
Paul (Manager) The staff pools tips, and divides it up with a little flexibility -- I know they include the cookstaff, too.

The Station
Matt (manager) "The waitstaff pool the tips, split it about 2/3 among themselves, 1/3 to the bussers. The dishwashers--I know if they're working their butts off, they'll get some of the money, too."

C&O
Dave Simpson (owner) "We pretty much leave it up to the servers--we feel that they are going to do the right thing. We do offer guidelines, as to what is fair for them to tip out to the dishwashers, the bartenders...and I know that they exceed them. Everyone here works very hard, and the [servers] know they can't do it without support."

(Dave Sagarin, July 28, 2003)


Comments? Questions? Write me at george@loper.org.