This is a new mini-series I'm trying out. I think Steemit is the perfect place to publish this, since there are so many people on here from all over the world.
I'd like to take several topics and explain how they work, in simple terms and as neutrally as possible. There were a few ideas I had rolling around in my head, but this comment thread pushed me to action. So far, I plan to cover tipping (because of this article and the comments on it), health care (because it fascinates me) and the Bill of Rights. Definitely open to requests for more topics!
Today, I'll try and explain tipping in the United States, specifically with regard to restaurant servers.
Background
When you go out to eat at a restaurant in the United States, you have a few options. I'm going to break them down into 4 categories:
- Fast Food (McDonalds, Burger King, Kentucky Fried Chicken, etc.)
- Fast Casual (Panera Bread, most deli-style restaurants)
- Casual (Applebees, TGI Fridays, Denny's, etc.)
- Fine Dining (Ruth's Chris Steak House, Michelan star rated restaurants, etc.)
At the "fast" options, you order your food at the counter and bring it to your table yourself if you want to eat there. You also get your own drinks. At Casual and Fine dining restaurants, you are "waited" on by a server, who takes your order, brings you your drinks, brings you your food, and brings you your check when it's time to pay.
The United States is notorious for being one of the only countries in the world where you are expected to tip your waiter or waitress regardless of the quality of their service. Our expected tips are also in the 15% range, with anything less than 10% being considered a "poor" tip and anything over 20% being considered a "good" tip. This is extra money paid in addition to the price of your food and drinks.
So why is the United States this way?
Root Cause
The non-political answer is: because the minimum wage in the United States for servers is actually far lower than the minimum wage for all other types of workers. If you get an entry-level job say, washing dishes or digging ditches, the US Government says your employer must pay you at least $7.25 an hour. However, if you get a job waiting tables, your employer is legally allowed to pay you a little as $2.13 an hour! This is less than 30% of the minimum wage.
The political answer is: because labor in the United States is notoriously weak when it comes to the battle against corporations. Various industries, most notably public sector employees, tradesmen, and manufacturing, have succeeded in establishing and growing unions to fight for their interests. However, the restaurant industry (along with retail) is virtually devoid of unions. Workers have very little power over their employers in the food industry, and since the jobs require very little training, there is a lot of competition in the labor force. All these effects combine to create a history where restaurants have been able to secure a lower minimum wage for their tipped employees.
Different states and cities have different minimum wage laws, and some states do require employers to pay their servers a higher base wage. Even in the states that don't, the Federal Government requires the employer to make up the difference between the lower hourly wage and minimum wage if the employee does not earn enough in tips. But the bottom line is that thousands of servers in the United States are only earning $2.13 an hour, and they are relying on you to make up the difference.
A Night Waiting Tables
I worked in a restaurant (Chili's, for anyone wondering) for over two years. During that time, I was a host, carry-out, busboy, and waiter. I have friends and family members who have waited tables more recently, and I gathered their inputs. So let's walk through a typical Friday or Saturday night dinner shift, which will be the most lucrative shift of the week.
Most restaurants will divide tables into sections, with the average section being 4 tables. On busy nights, every section will have a dedicated waiter. Most shifts start at around 5 PM. You might get your first table 10 to 15 minutes after that. Most tables will be either 2 people or 4 people. Families are common depending on the restaurant, and the occasional large party will be seated in your section, but let's assume that all night long you have tables of 2 or 4 people rotating through your section of 4 tables.
Most people will take an hour or so to eat their meal. You also have to add in time for the table to get cleaned. So over the course of a night, you might get your last table sometime around 11 PM. Your section would look like this:
So that's 16 tables over the course of the night. Assuming an average of 3 people per table and an average check of about $20 per person, your total sales for the night comes to $960. Assuming you were getting tipped an average of 15%, that means you go home with $144 for just 6 hours of work, or $24 an hour, right? Not so fast.
Close-Up and Tip-Out
Sure you got your last table at 11, but that doesn't mean you can leave. You're there until at least midnight. But then you have to clean your section and usually you also have to do some kind of rotating maintenance duty (like filling salt shakers or wrapping silverware). So even though you came in at 5, you're realistically not leaving until about 1 in the morning.
On top of that, at most restaurants, waiters are required to "tip out" their support staff. Where I worked, I had to pay 1% of my total sales to the busboys to split, 1% to the QA person putting together food on the trays, a couple dollars to a dedicated "runner" for the evening, and a whopping 1.5% of my sales to the bartender. So on a night of $960 in sales, my tip-out is going to looks something like $35. At my brother's job it was a flat 5% -- so his would be even more.
So between cleaning and tip-out your $144 for 6 hours of work is now $109 for 8 hours of work, or $13.63 an hour. Still higher than minimum wage, and you still have that paycheck coming though, right?
The Tax Man
Well, sort of. Most server's paychecks end up being a big fat zero. Even though they were making $2.13 all night, taxes have to come out of somewhere. That small hourly wage is usually just enough to cover the taxes you owe on your $109. Here's what that looks like for someone who does this shift just two nights a week (Friday and Saturday)
Source
Now, the hourly pay only added up to $34.08, and the tips were $218. So the paycheck in this example would only be $4.68. Barely makes a difference. And I knew plenty of servers who ended up with zero'd out paychecks because they were working more hours and paying more in taxes because of it. My example also assumed there is no state tax (only true in a few states).
Conclusion
Waiting tables is not a lucrative job at most casual dining restaurants. Because of slow shifts during the week, most servers are not making much more than $10-12 an hour when all is said and done. This is on the low end of the pay scale in the United States: the average hourly wage in the USA is $22.65.
Like it or not, tips make up the vast majority of a server's wages. If you do not tip your server, you are withholding money they rely on for their livelihood. If you only tip a few dollars on a large check, you are withholding money they are relying on for their livelihood. Now, you might have a good reason for doing so - maybe they were downright horrendous to you.
But if the service was slow and your food didn't come out properly... you should still consider leaving at least 10%. Talk to the manager and explain your dissatisfaction - they will likely be willing to discount your check or take an item or two off. Let the restaurant take the hit, not your waiter. If they are truly a garbage server, they'll be fired soon enough. More likely they were just having an off night.
If you were fine with your service but you disagree with how the system works overall, you are only hurting the server by not tipping. The restaurant owner could not care less.
And most importantly of all: if you cannot afford a 15% tip on your meal, then you simply cannot afford to eat at that restaurant. Go somewhere cheaper.
Yikes, I kind of got carried away at the end there. Can you tell I used to be a waiter? I'll step off my soapbox now.
References
- https://www.businessinsider.com/how-much-it-costs-to-eat-at-resaurants-2015-3
- https://www.dol.gov/whd/state/tipped.htm
- https://scholarship.sha.cornell.edu/cgi/viewcontent.cgi?article=1849&context=articles
- https://www.adp.com/tools-and-resources/calculators-and-tools/payroll-calculators/salary-paycheck-calculator.aspx
- http://www.traveller.com.au/a-guide-to-tipping-in-the-us-when-do-i-tip-and-how-much-39x1t
- https://www.usatoday.com/story/money/2015/06/14/much-tip-depends/71137254/
- http://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/
@DollarsAndSense is a father, veteran, participant in the rat race, freelance writer, and volunteer EMT.
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I love all the new fast casual restaurants that have hit the market. It is great to be able to just stand in line and get a decent meal without breaking the bank.
One big problem with fast casual is that most fast casual stores, like Panda Express, are owned by big corporations. I would love to see mom and pop style stores adopting the fast casual format.
As it stands, most of the mom and pop restaurants that I would like to frequent still have the sit down format and require the huge tips.
Oddly, cooks who want to serve good food to the people have started hitting the street with food trucks.
IMHO, the expectation of a 20% tip hurts everyone. I would rather see restaurants charging enough to pay their salaries or adopt the fast casual format if labor is too expensive.
Agreed on all counts, though where I love there are a lot of deli or bistro style places that are independently owned that I’d call Fast Casual. I do love some of the chains though!
I hear ya! I have been a waiter (back in the day) and my daughters and friends have been waiters. I look forward to hearing your thoughts on healthcare.
I had NO idea that the average wage is $22+ an hour!
Nice! Health care should be soon 🙂
Did you think that average was high or low?
PREACH!
I worked on and off as a waiter for 10 years, 4 of them at a comedy club that had 15% "auto-gratuity", which wasn't enforced. Nor was there a minimum so you could get a whole section, of EIGHT or more tables, with no one buying anything. On an above average week though I could walk out of there with $400 cash, plus we were paid slightly higher so we'd get a $30ish paycheck every two weeks. Some weeks I'd be lucky to walk out of there with $100.
But tipping does need to change in this country. There are a number of restaurants now that pay upwards of $30k/year with benefits and don't allow tips.
On the other hand, waiters at high-end and tourist attraction restaurants can make upwards of 6 figures. I have a friend in Nashville that waits tables and he cleared almost $90k in 2016.
I believe it! The disparity is crazy between an IHOP, a Chilis, and the upscale places.
That’s nuts about the comedy club. I don’t think I could have stuck it out as long as you did.
I generally worked 4 or 5 nights a week, and usually was able to pocket $200-300. But I was 18 and didn’t need the money so it felt like a lot. I can’t imagine supporting a family on that.
The tipping structure seems to create an unnatural disparity in earnings for waiters.
Even worse, A restaurant with great food at a low price gets substantially less in the way of tips than one with overpriced food.
I seem to remember as a kid that the average tip was 5% and a good tip was 10% . The price of food used to be higher. Higher wages and lower tips would be more civil.
BTW: There is a style of restaurant called One World Everybody Eats . These buffet style restaurants don't charge for the food. You go in to the restaurant. Slop food on your plate then pay what you think the food was worth. Some of the restaurants welcome the homeless and many of the patrons know that and overpay for the food knowing that they are feeding hungry people.
Moral of the story: be a barrista or a bartender.
Seriously. I don’t think ever took home $100 (without working a double). I don’t think the bartenders ever took home less.
Hear hear.
Tipping as it exists in the US is the worst. Bleh. I've been lucky enough to never have to work that kind of job, but they certainly have my sympathy.
As I was writing the post, it dawned on me that the busboys were making the same hourly wage (I bussed tables sometimes). The servers were subsidizing the cleaning staff so the restaurant would save money! I don’t know what shocks me more: that they got away with it, or that they didn’t try the same thing with the dishwasher.
Wow, that is a terrible system where the wait staff (and the rest of the staff) have to basically beg their customers to make a living wage. It is insane that this the norm in a modern first world country. It is even more insane that there are people countries like Australia that want to emulate the American system of no or non liveable minimum wage...
Since it’s so culturally ingrained her that you’re supposed to tip, it’s not really something you ever have to actively “beg” for most of the time, but it does drive server behavior. Certain demographics are known to under-tip... so we’d try and not get those tables 😅 a group of people coming in speaking a European language was a red flag that you were about to work you tail off for virtually nothing 😛
Europeans also have a mush of tipping habits and it drives me nuts, coming from Australia, we just pay the workers properly (hopefully that lasts...).
Yeah I thought about getting into all the other kinds of tipping customs (bartender, barber, nail salon, taxi cab, etc.) and realized the post could very quickly spiral out of control.
Are you serious?!?!?!? Those professions also rely on tips instead of wages? What sort of country do you live in!
Hahaha no all those make more than minimum wage and the tips are just a nice supplement. With the exception of some bartenders. But they make tons of money so I don’t pity them 😂
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I tend to under-tip and hubby veers towards over-tipping, so we compromise and meet in the middle (usually works out to be 20%)
I used to overtip too, but now I generally just stick to 20%. It’s easy math, and it makes servers happy 😃
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Bartender I really did it this time
When I got home it was 6 A.M.
sir dollarsandsense! yeah if you can't leave a tip don't go. we start at a 20% tip always and give more if they are exceptional. that's a tough job, did you hate it or was it fun at times because a lot of people are real nice right?
I think if you love the restaurant business and want to be a waiter or server, then do it in a fine restaurant or else you're never going to make enough to make it worth while.
I actually loved it, one of my favorite jobs ever. My co-workers were awesome and most of the customers were really laid back. I have fond memories of that job.
Thanks for stopping by!
sir dollarsandsense! haha! man that was NOT the answer I was expecting! but that's wonderful. Hey if you ever got desperate you know you could always do that part time, but that's very good news sir, I have always thought that most people are nice to deal with in that setting so that reinforces my belief.
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what a tough place for USA-ians wait-staff people :(
in australia, we don't need to tip cuz we know they get minimum wage that's pretty decent
i so still tip if the service is awesome though !!
everyone wins :)
Lots of other tipped professions are like that here in the USA: barber, beautician, taxi driver... things like that. But not servers! We are a poor breed 😉
Thanks for stopping by!
That’s really interesting . Forgot to take in the barmen and support staff . I know there is always politics when it comes to tips in large pubs that serve food . #steemitbloggers
Hey, this is great information. My wife and I spent the bulk of our honeymoon in the US about 6 years ago now. We knew of tipping, but couldn't understand how it worked, or why it was important, especially for waiters/waitresses. We were actually lucky - the first 'waited' restaurant we went to we were served by a lovely young girl who was really helpful. I just asked her flat out, how does tipping work, and she explained it to us, including the 10, 12 and 15% levels. She was such a great help that we tipped her 20% just to say thanks, because in reality, she probably saved us a lot in tips in the time were were there!
We also struggled with who we were supposed to tip. For example, the housecleaners who worked at the hotels we stayed in. We didn't think we had to , but then someone said we probably should. I think we ended up just dumping some cash in tip jars at places where we were given service.
It seems kind of abhorrent that your government is happy to just let servers be paid such a poor hourly rate. It's not really worth getting out of bed for. I could scour the streets of my neighbourhood and find enough bottles and cans to make more than that each hour. In my state, we get 10c back for each bottle, can, and some cartons we take to recycling centres. Not a bad deal if you are into saving any cans and bottles you use!
Glad it was helpful! You know, to this day even I'm still unsure of exactly what the protocol is for tipping your housekeepers in a hotel. I generally only do it if I'm staying multiple nights, and then I usually leave a $5 or a $10. But yeah I have no idea, haha.
We stayed 16 nights in one in NY, and we happened to see one of the housekeepers after about 4 nights. I hate carrying loose change (the US uses a lot more coins (currency varieties) than we do in Aus - although I would rather go back to a $1 note), so I was using one of the hotel's paper coffee cups to store it all in. She asked me if it was a tip, or not, so I promptly moved it into the safe.
After another couple of nights, someone mentioned, or we heard, I can't remember, about tipping housekeepers. I couldn't get a straight answer from anyone (I guess you're not alone in mot really being sure!), so I continued to keep all of my loose change.
On our last night, I counted it all up, and it totalled to about $83, if I remember correctly (minus one of each coin for a souvenir), so we topped it up to $100 with notes and left (the by then three) coffee cups, and a letter thanking the housekeepers for keeping our room as tidy as possible before we departed for the airport.
I think that was a great gesture! I'm sure it made their day. One of these days I will figure out what the proper protocol is...
I kind of like how they do it on cruise ships - they set a baseline tip that's automatically paid, and you can choose to adjust it up or down at the end of your cruise. I think it goes to your room steward, your waiter, and one or two others.
We ended up leaving with the understanding that basically anyone in the service industry was up for a tip. If they helped you in some way by making your experience better, then you could choose to tip them. Some on the pushy side got nothing from me. Those open roof double-decker tour busses in NY - most of the people running them got nothing - they would basically wave a tip jar in your face. We did get one guide who was so helpful - I gave him about 25%. He was so grateful, so I gave him another couple of singles, just because.
If you have to tip, then, yes, you're right. Cruise ships do it really well. But then payment systems on those are linked to your card which is a bit difficult to do across different businesses in a country!