The Tipping Point for Tipping in the US
Read Time:3 Minute, 18 Second
By: Nada Moghazi
Edited By: Alexandra Huggins
You walk into a convenience store, grab a pack of Polar Ice gum, head to the checkout, and are asked to tip anywhere between 15-25%. We all know the feeling as the checkout iPad turns towards us with the dreaded “Add a Tip” prompt. It seems as though we are tipping everyone, everywhere, all the time. Why has the United States shifted towards this culture and how do we break out of it?
Tipping was predominantly reserved for service workers at restaurants. This came as a loophole for restaurant owners to legally pay their servers below minimum wage as the expectation was for customer tips to compensate. Restaurants claim that this benefits customers in menu prices, as lower wages allow them to drop their cost of food. You may eat a $15 bowl of pasta with a 20% tip, totalling $18, or you can simply pay for an $18 bowl of pasta. And unless all restaurants get on board with raising menu prices and omitting tips, those who do so are at a disadvantage.
According to the Department of Labor, the federal minimum wage currently sits at $7.25 an hour, but various states have passed legislation raising their state minimum wage to adjust for inflation and the cost of living in their state. For example, California’s minimum wage is $15.50, and DC’s is $17.00 an hour. Federal law allows employers to pay tipped employees a minimum of $2.13 an hour, so long as the tips compensate and bridge the gap to reach the federal $7.25 requirement. California however, has recently passed legislation requiring tipped employees to receive their state’s minimum wage by their employer, in addition to the tips they receive. DC has not gone so far as to require minimum wage but requires tipped employees to receive $8.00 an hour by their employee, regardless of tips.
The pressure to tip increased during the COVID-19 pandemic, as people were more courteous and tipped more for those putting themselves at risk to provide others with a service. Once that door was opened, it slowly became the norm. As businesses shift towards cashless payments and implement more technology into the checkout process, it also became easier to integrate personal interaction and pressure to tip, rather than a lone jar to the side of the register. Most customers are aware that their waiters or waitresses are likely to receive below minimum wage and depend on their tips, yet when it comes to businesses such as coffee shops or fast food, salaries can vary. This then begs the question, are we supposed to still tip outside the context of service restaurants? Some claim that tips are considered discretionary in cafés, grab-n-gos, fast food services, and other institutions of minimal service. A majority of those businesses, such as Starbucks or McDonalds, are now raising their minimum wage to $15, nationwide. This increase in wages may come at the cost of raising menu prices but also relieves the pressure on customers to feel responsible for the employees’ salaries.
Customers are growing more dissatisfied with the nation’s implementation of tipping, and want to see change. Businesses benefit from tips as they relieve them of economic responsibility to pay their employees fair wages, while also maintaining subjectively “moderate” menu prices. The cost-benefit analysis shifts dramatically depending on which lens you look through.
International students are riddled with confusion as various cultures embody different perspectives towards tipping. When asked about his perspective on US tipping culture, German SAIS student Leonard Müller states “At the heart of capitalism, the US tipping culture reveals a simple, yet troubling fact: so many employees rely on unpredictable tips just to get by. It’s about time for employers to recognise this and step up, granting their employees the wage stability they deserve, rather than leaving them at the mercy of an uncertain system.”
