Tipping is Bullshit

I love eating out. I also like dining out. But lately I have been growing more and more weary of paying the price listed on the menu plus another 20% every time I do it. Of course, tips are the only thing keeping a lot of service industry workers afloat in Portland. Serving and Bartending are some of the very few jobs where you can, without the debt burden of an expensive degree (or perhaps in spite of such a burden), earn an actual living wage in Portland.  Tipping is what makes that possible - but is there another way to run the restaurant industry that doesn't leave me feeling gouged at the end of every meal, while preserving livable wages for the service industry?

I asked several restaurateurs in Portland what they think about tipping and how it affects their business. Jenny Nickolaus, General Manager/Owner of The American Local on Division (yum!), told me that this issue is one that is frequently on her mind. From her perspective, the big issue is the inequality between the wages of the front of house workers - servers, bartenders, and bussers - and the back of house workers (dishwashers and cooks). This seems to be a common refrain among Portland restaurant owners who want to treat all of their staff fairly and pay them as much as they can.

Chef Kat LeSueur, who owns and operates Cocotte on Northeast Killingsworth (Zagat's #11 restaurant in Portland), echoes this sentiment. One of Chef Kat's concerns is how minimum wage laws contribute to inequality between tip-earning and non-tip-earning staff. Servers at fine restaurants throughout Portland can earn between $20 and $30 per hour while cooks average between $12 and $14 per hour. While many restaurants, including Cocotte, require the tip-earning staff to share a portion of their tips with the back of the house, the income disparity is largely unaddressed by this practice.

My biggest problem with tipping is the wage gap it creates between back and front of house employees. In a state where minimum wage is fairly high and doesn’t take tips into consideration, it prevents me from being able to pay cooks and dishwashers what I’d like to be able to.
— Chef Kat Lesueur - Cocotte

The Federal minimum wage for tipped employee is only $2.13 per hour. This is the minimum amount that can be paid to a tipped employee throughout the US. Many states, including Oregon, have a much higher minimum wage: in Oregon, our 2015 minimum wage is $9.25 per hour, but there is no exception for tipped employees.  In fact, Oregon is only one of seven states in the US that require employers to pay tipped employees the full state minimum wage before tips. This website provides a complete breakdown of how other states are approaching the issue.

So of course, one approach to solving the issue from a restaurateur's perspective is to change these laws. If tipped employees can be paid less, then non-tipped employees can be paid more. Rather than some folks getting $24 an hour and some folks $12, we might see everybody getting closer to $18 an hour. Another approach might be to just get rid of tipping entirely.

The Loyal Legion beer hall on Southeast 6th Avenue surprised me when I visited the other night with a declaration on their menu: ALL PRICES INCLUDE GRATUITY. I reached out to owner Kurt Huffman, only to realize that eater.com had already done my hard work for me. Huffman is also concerned with the "very absurd inequity between the tip-earning staff and the non-tip-earning staff", lamenting that the dishwashers at his restaurants work 60 to 80 hours per week to make ends meet. He thinks that's bullshit, and to combat it he is now paying his servers $18 per hour and everybody else $15 per hour - but nobody should expect any tips.

Of course, how the hell do you pay for that? When I asked Chef Kat what a $15 per hour minimum wage would do to her restaurant, she told me simply: "put it out of business". We can argue about the various macro-economic benefits of raising the minimum wage up this high, but the on-the-ground reality is that for small restaurants that have thin margins, they don't have the wiggle-room in their cash flow to be so bold as Kurt Huffman and his Loyal Legion

The only way for a restaurant to make it up would be to raise prices, which is what Huffman has done but what other restaurateurs are afraid to do. A beer at Loyal Legion - even a cheap one - costs a minimum of $6.  That's a full 50% more than you could expect to pay for a microbrew at a lot of bars around town. But even though the Loyal Legion experiment is working out, Huffman told Oregon Public Broadcasting that 30% of his restaurants would fail if he had to pay a $15 minimum wage.

I don’t feel like Portland consumers are ready to digest that kind of price increase. It puts people off. Portland is a very value-conscious town.
— Kurt Huffman on OPB.org

But we have to consider two more perspectives on this issue: that of the customer, and that of the tipped staff. From a customer point of view, I think I can interview myself on that one. I hate how culturally mandatory tipping is. My wife and I spend a lot of money on dining. If I spent $100 at dinner, I'm grumbling when I have to make it $120, and I feel like a schmuck if I leave less. And on one horrible occasion at Cricket Cafe, there was some confusion with a split bill that resulted in the server accidentally getting a 5% tip. She chased me down in the street to confront us, and it was aggressive and awkward and made me wish we hadn't left a tip at all. More than anything, I feel like the entitlement to a 15-20% tip is what bothers me as a consumer, because tipping has really stopped being about the quality of service. It's just expected or else you're an asshole.

Another problem I have is that often times I can be required to pay twice as much to a server for the same level of service just due to what I ordered. Maybe it's my anniversary and we order a really nice bottle of wine that costs $80. What I've really just done is order a $96 bottle of wine because the server expects that 20% at the end. It's adding insult to injury because I know that this bottle is already marked up 300% - but now we need another 20% on top? The kicker is that the $80 bottle is no more work than a $40 bottle, but worth twice as much gratuity.

Looking at Europe I can see a different attitude. I do a great deal of business with my friends and colleagues in the Netherlands, and I've had the pleasure of traveling to Amsterdam on business and also of meeting these same colleagues here in the US.  In the Netherlands, and throughout the rest of Europe, tipping is essentially an optional practice. At the end of a meal that costs €76, you might round up to €80, but only if you were particularly happy with the service. Leaving such a paltry tip here may very well get you chased into the street.

Of course, some of my Dutch friends have remarked that they find the service in the US to be "friendly" compared to the Netherlands, implying that a server seeking a tip may work harder for that tip. But my friend Lex, a Dutchman, tells me that American service can feel disingenuous, as if everyone is pretending to be nice. He prefers the sometimes more gruff but straightforward service that can be found in Europe, but also notes that generally the nicer the restaurant in Europe, the better the service.

It seems to me that the European mentality is a bit more straightforward, and perhaps closer to the original intent of what a Gratuity is. Here in the US, servers simply expect 15% as a minimum, even if their service isn't anything special. They take your order, bring your food, and you are going to pay 15% for that. It seems to me like a tip should be given when thankful for exceptional service, as it is in Europe, rather than as a culturally mandatory phenomenon. 

As for the server's perspective, it's no stretch to say that while most Front-of-House people like the practice of tipping, plenty of servers would happily work for a steady living wage. Are you a front of house person? What do you think about this issue? I'd love to hear your comments.

Ultimately, I think the real solution is to raise the minimum wage, eliminate the practice of tipping entirely, and to expect to pay more at restaurants. Until that happens, I'm going to keep on tipping, but I'm not going to be happy about it.