Is Our Tipping System Gratuitous?

in the bill. However, in America, instead of an upfront service charge, diner's hand over fifteen or more of the price of the meal to the server at their own discretion. It's not required, but it is customary. But this seemingly generous practice has some unpleasant hidden costs for starters. The existence of tipping allows restaurants to pay servers a federal minimum wage of two dollars and thirteen cents an hour, so waiters in most states basically live and die by tips.

The result is that tipped workers are twice is likely to live in poverty and depend on food stamps as other workers. Then there's the opposite problem. In stronger restaurant markets, like big cities, the existence of tipping means that waiters in busy restaurants end up making a lot more money than neque cooks and dishwashers, who get paid a fixed

hourly wage while working just as hard. Add to all that mess the fact that America's tipping system is rooted in racist hiring practices that emerged after the Emancipation when white business owners were trying to avoid paying new black employees, and tipping comes out looking decidedly ugly. So when does it make sense to abandon tipping in favor of raising restaurant prices so that all staff is paid fairly or

would customers bulk get that? Sarah Clifton is a mathematics professor at the University of Illinois who specializes in modeling complex social behaviors. In a recent paper, she created mathematical models of two hypothetical competing restaurants, one with conventional tipping and one without. The paper was published in the February issue of Chaos, a journal from the American Institute of Physics. The key variable in Clifton's models is the average tipping rate.

Tipping rates have been creeping up of the past few decades from ten percent to fift and now close in major US restaurant markets. Clifton's models are designed to be as simple as possible, with every player in the system motivated purely by monetary gain, meaning that when cooks are paid better, they're more likely to stay, meaning that food

quality goes up. When waiters are paid less, they're more likely to leave, decreasing service quality, but eventually the waiters would return if diners flooded the restaurant because of the food quality, which would presumably mean more profit and higher wages for all. What Clifton found was that when the average tipping rate crosses a certain threshold call it the

tipping tipping point, restaurants will make more money by abandoning tipping. Unfortunately, Clifton doesn't have enough real world data to calculate exactly what that magic tipping point is. Dozens of end restaurants across the United States, led by New York chef and restaurant tour Danny Mayer, began experimenting with no tipping policies. These trend setting restaurants either increased MANU prices by an average of twelve to fifteen percent or included gratuity in

the final bill. That way, the restaurants could distribute the earnings more fairly and pay everyone a fixed hourly wage, but this plan was not popular with the public. Michael Lynn, a professor of consumer behavior at the Cornell University School of Hotel Administration who researches tipping, reported that online customer reviews of no tipping restaurants went south when those no tipping policies were instituted, and we're worse when tips were

replaced with service charges. Lynn said, people hate service charges, and if I increase my menu prices, They're going to think I'm more expensive, even if the combined bill is no different. In other no tipping restaurants, it was the waiters who revolted. At Bar Agricole in San Francisco, servers were used to making twenty five dollars to forty dollars an hour, including tips, while the hitchen staff was only

making thirteen to twenty dollars an hour. When owner Thad Woggler decided to ditch tipping, his cooks and dishwashers were psyched, but the serving staff kept leaving for more traditional restaurants, so Waggler like lots of other pioneering restaurant owners switched back to the normal tipping scheme. Clifton, our mathematician, feels

that these restaurateurs were simply ahead of their time. She said, when restaurant owners get rid of tipping too early, as we've been seeing with some really nice restaurants, they sometimes have to reinstate it because it's not profitable that would conform with what customers want. Her model indicates that casual restaurants should actually make the move before fancy ones, because the point at which the tipping rate becomes profitable would

be lower for them than in the high end places. However, Joe's Crabshack, a decidedly not high end chain, tested the waters in late when eighteen of its restaurants abandoned tipping. Although customers were essentially paying the same exact total for a meal as they were when tipping was allowed, said they didn't like the no tipping policy. According to restaurant research, customers said they didn't trust management to share the money, and they felt it took away incentive for good service.

Joe's dropped the no tipping policy less than a year after it started, after losing eight of its customers. During the trial, so Americans themselves haven't reached the tipping tipping point yet. In the meantime, restaurants will likely keep experimenting with various tipping policies until they find one that keeps customers, waiters, and kitchen staff all equally happy. Today's episode was written

by Dave Ruse and produced by Tyler Clang. For more about the history and science of tipping, check out our episode on the topic over on my other podcast, food Stuff, And of course, for more on this and other depressing but important topics, visit our home planet, how stuff works dot com.