Should Tipping Be Banned?

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(Photo: Aaron Stidwell)

Our latest podcast is called “Should Tipping Be Banned?” (You can download/subscribe at iTunes, get the RSS feed, or listen via the media player above. You can also read the transcript; it includes credits for the music you’ll hear in the episode.)

As we all know, the practice of tipping can be awkward, random, and confusing. This episode tries to offer some clarity. At its center is Cornell professor Michael Lynn, who has written 51 academic papers on tipping. A few examples:

Because Lynn has largely built his career around tipping, it came as a bit of a surprise when Stephen Dubner asked him what he would change about the practice:

LYNN: You know, I think I would outlaw it.

Why ban tipping? Lynn has found that tipping, as currently practiced in the U.S., is in fact discriminatory. If that’s not enough to make you dislike tipping, consider what Magnus Torfason, from the Harvard Business School, has to say:

TORFASON: The more tipping you see in a given country, the more corruption you generally see in that country as well.

You’ll also hear from a New York lawyer named Justin Swartz on the legality of tipping; Jay Porter, the owner of the San Diego restaurant The Linkery, where tipping is forbidden; and from people from all over the country who work for tips — as they dish on their strategies to make more money. (Thanks to radio producers Marc Sanchez, Colin Weatherby, Avishay Artsy and Kaitlin Prest for recording.)

Finally in this episode, you’ll hear how Steve Levitt and Stephen Dubner dole out their dough.

Magnus Torfason’s research shows the association between tipping and corruption in 32 countries.


Nick

Not surprised higher use of tipping is correlated to corruption. Of course, I think both are caused by individualistic and elitist societies where people feel that there is a second class of workers that are not supposed to be paid well but rather live off our scraps (or tips) as we whimsically feel at whatever moment.

If we don't think other humans deserve the same human decency as the rest as us, we'll set up a system where they better toe the line for our pleasure or else they might not be able to eat.

I wonder if Levitt would like for the Univ. of Chicago to pay him based on how pleased his students were on that last lecture or test grading he just gave?

Mellow out

[[both are caused by individualistic and elitist societies where people feel that there is a second class of workers that are not supposed to be paid well]]

Yikes, dude. Mellow out. Individualism is what makes America great. Social mobility. Hard work. Creativity

Nick

Sorry maybe individualism is too general a word. Thinking individuals matter and treating them humanely is good. (And not just abstractly in that it makes us feel better at night, but for example Henry Ford went bankrupt before building the Ford Mo. Co. it certainly made the US richer that we humanely let him go bankrupt instead of rotting in jail as British law would have.)

What is bad is thinking that your own individual self is more important, thus you are willing to be a jerk to others. Example is the office coffee honor system in Freakonomics, when we feel above the trivialities of being fair/following the rules that we cheat and steal.

When we put each of us to have whimsical/arbitrary power over another person or their well being we often abuse it. Another study in point are the famous Stanford prison experiments or Abu Ghraib.

Caleb B

As a former waiter, I loved tips....bc I made more money than everyone else. The 2.13 an hour? Who cares what the base rate is? I made $18/hr with tips (and that was more like $20/+hr when you consider I didn't pay taxes on a lot of my earnings).

csdx

That's another reason I oppose tipping, it enables people to cheat on their taxes. Also servers I've know, tend to feel that their tips shouldn't count as income and be taxed, so they're are more likely to try and underreport their tip income.

Tony

I like the idea of a service charge, but I still like being able to tip without it being expected. I think that this would make tipping actually for service, and would encourage good service.

Danny

Don't ruin it for the diners!

The best part about tipping is that most servers think what they do affect our tip. Meanwhile, in countries where there's no tipping... yea, try to get good service in mid-level restaurants in Paris. I'm not being flip about it, I love Paris. But the kind of service you get at a 20 euro entree place is not the same kind of service you get for a $30 entree place in NYC.

James

For the correlation is not causation file, I notice that the graph of tipping vs corruption works just as well (by eyeball, anyway) if it's a graph of corruption vs cultures rooted in northern Europe.

Mr. Twenty Percent

Once, I was out with friends for weekend breakfast at a diner. The checks came and one of my friends asked what was seven percent of his bill. SEVEN PERCENT! On a bill that was under five dollars. I encouraged him to just throw an extra buck on the total.

For the record, he's Mexican American.

But he also makes about $100,000 a year between his government job and side work that he does.

One thing I'll say though is that it's entirely possible that waiters telegraph their disappointment when they get a table full of black clients and the customers pick up on the bad vibes. Maybe the water doesn't get filled quickly enough, maybe there's a tone of voice or lack of eye contact. Case in point, I remember a story out of Memphis where the bartenders were charging blacks higher prices than whites because "blacks don't tip."

You should run that one by your lawyer pundit.

As an black American, I'm aware of the stereotype that blacks are cheap or don't know the cultural norms of tipping. But I've waited tables, I graduated college, and I've traveled. So I make 20% my baseline. That may or may not do anything to move the needle on how blacks are perceived in society. But I also make sure I take very good care of the people at my regular bars and restaurants, so whatever biases, perceptions and imbalances may exist, I seem to always get very good service.

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amswiss

the anecdote at the end (levitt sending cash to a car service) was useless without knowing how much he sent, how many drivers the gift was supposed to cover, and how many trips he's trying to cover (i.e., somehow to make an apples-to-apples comparison) ... if it turned out that he just ended up giving them all an amount more or less equivalent to what they would have received as conventional tips, then perhaps their pronounced gratitude just has to do with the fact that he delivered this tip unconventionally, and therefore, more memorably. if he in fact paid more, than that alone explains the gratitude. if he ended up getting away with paying less, then perhaps there's some reason for listeners to feel like this guy's onto something ...

Joe Dokes

I studied in London, the service in restaurants was HORRIBLE, was a lack of tipping to blame? Perhaps. I learned to sip my drink, because you were very unlikely to ever get another drink order or a refill. The wait staff basically came took your order, brought your food and drink, and brought you your check. If you needed anything else you were out of luck.

I had a small diner (do they even call them diners?) near my home. I frequented it, and began tipping even though it was not expected or encouraged. After living there six months and eating at this restaurant at least twice a week the service improved immensely. Was it due to the tips or simply the waitstaff recognizing me as a regular? I think my consistent 15% tips certainly helped.

On top of that the speed and efficiency were abysmal too. It seemed as if the wait staff played paper, rock, and scissors to see who would have the indignity of actually working.

During my 20s I dated two black women. I believe one of the reasons blacks tip so poorly is poor service they receive. With both women I noticed that the service we got seemed to be worse than when I dated white or asian women (I'm white). Yes, I realize that this is completely anecdotal. But, I do believe a chicken and egg situation may exist with African American patrons, they get crappy service so the tip poorly, at the same time the waitstaff gets lousy tips so they give African Americans poor service.

Regards,

Joe Dokes

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csdx

I'd honestly prefer a norm of no tip for decent service, and tipping for good or great service. I understand that some people like having a baseline tip, because you can then withhold it as a punitive measure for bad servce. But honestly, anytime I've wanted to do that it's been because of the chef, not the waiter.

Igmar Sanchez

Having lived overseas only made me hate tipping more. In Japan tipping someone is considered an insult. I enjoyed not having tipping in my life as it made things simpler. Coming back to the US only intensified my dislike of tipping. It is not that I feel that the tipee does not deserve a decent wage but rather it is the sense of entitlement that they have. I'm made to feel guilty if I do not fulfill their expectations for additional compensation for horrible service.

That leads me to the one place in the US I do not mind tipping. Las Vegas. That is a funny thing because I do not partake in the traditional Las Vegas activities, it is the service that I appreciate. Now understand that when I visit Las Vegas every year it is to take part in conventions that are held in nice hotels. In those places, the staff goes over the top in customers service. They realize that they are there to serve the customer and that they do. If they are having a bad day, it is never my fault and they would never burden me with their problems, after all I'm the customer. It is such a refreshing change from the norm that I do not mind being more generous. And should my tip not meet their expectation, it never seems reflected in their reaction. They always are polite and grateful for the any tip.

I hate the confusion of tipping and the sense of entitlement that people have to be tipped.

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