circa 1930: Full-length image of a group of waiters, wearing matching white jackets, black bow … [+]
M.I.T. publishes a “Living Wage Calculator” that determines what is “a minimum subsistence wage for persons living in the United States.” Which sounds pretty grim on all counts, especially since the number is always higher than the official minimum wage of $7.25 an hour. In Coffee County, Alabama, a living wage for a family of two working adults with two children is $21.29; in Orange County, California, $32.40; in San Francisco, $35.01.
Yet the waitstaff in most U.S. restaurants may make only minimum wage and must depend upon tips to get anywhere near a living wage after a week’s work. But the difference between what a waiter might make at, say, a Denny’s anywhere, as opposed to a fine dining restaurant charging a $400 fixed price for a meal (before wine and tax) is a huge discrepancy, even if the server is left a 15% to 20% tip. It is not at all unusual for a waiter in a top restaurant in New York, Chicago, Miami, DC or Beverly Hills, even in an upscale steak house where a ribeye costs $75, to make $100,000 a year—a lot of it in cash. With pastas now running $30 and up, it’s easy for a guest to pay $100 per person at an Italian place; Sushi bars can cost much more. A bartender alone might earn $500 a night in a place where drinks are $18 and up.
An invoice shows the 19.6 percent tax on a beverage at a restaurant in Paris on March 10, 2009. EU … [+]
It used to be the case that a diner would not tip fifteen or twenty percent on the liquor and wine part of the bill, but not anymore. Thus, at a table that runs up a food bill in Vegas for $1,000 plus $5,000 just for wine, people tip on a $6,000 bill. Granted, those who can afford to do so might as well. Tipping has always been a form of showing off. And although expenditures for business meals (50% deductible) are still not at pre-Covid levels, tables at very expensive restaurants around the country are hard to come by after six PM.
Yet the battle between management and labor goes on at every level in the restaurant business, which has a very low profit margin and is very susceptible to rising prices in food, utilities and rent. But here’s the rub: In most of Europe and much of Asia, a gratuity is not expected (even though Americans feel they must leave one). The reason is that being a waiter in France, Italy, Germany, Spain, Greece and other countries is considered a good job with a good to very good paycheck, along with full benefits, and, while not disdained, tips are regarded as something one gets only if in a lowly profession. Waiters on the continent consider their profession as honorable as any. In Japan a tip may even be considered an insult. (It should be noted that many Europeans pretend they don’t know that they should tip waiters when visiting the U.S.) In the UK, though not in Australia, a 12% tip has become common, often added to the bill by the restaurant.
Waiters making crepes suzettes at a restaurant in Cortina d’Ampezzo, February 1962. (Photo by Slim … [+]
Of course, a no-tipping policy based on paying dining staff a living wage raises prices on the menu, but consider that your bill will, usually, be a bit lower when service is included—as mandated by law—so that, say, a steak in France costing $50 will show up on the bill at $50, including taxes and a 12% to 14% service charge; in the U.S. adding a 20% tip would increase it to $60 plus tax. And if you tipped 20% on the bill in Europe, you’re actually tipping about 30%. In France the charge is called servis compris; in Italy servizio incluso. (There is often a cover charge (couvert, coperto) of two or three euros added that pays for tablecloth and bread.)
Such a system seems entirely sensible to me and to most people around the world where a good living wage is paid to workers. Yet its chances of succeeding in the U.S. are next to zero, and, in fact, in those few restaurants that have tried it, the idea has failed miserably: people either complained over its being imposed or left a big tip anyway. The servers oppose it because, as noted, they can make so much more money from tips than if paid a living wage. And the idea is wholly opposed by the National Restaurant Association, based in DC, which vociferously fought the Raise Act of 2021 “because it would raise the federal minimum wage from the current $7.25 to $15 per hour over five years and eliminate the tip credit for tipped employees,” because “small businesses cannot easily absorb a dramatic labor cost increase and higher wages would lead to employers cutting back on worker hours and/or eliminating positions.” The organization contends that “tipped restaurant employees on average make between $19-$25/hour.” Yet, ironically, the NRA cites the fact that “29 states and 55 municipalities already have a minimum wage that supersedes the federal minimum wage.”
The problem on the consumers’ side is that Americans have gotten so used to tipping, even to the point of showing off, that they overwhelmingly reject the notion of eliminating tipping. But you can’t have it both ways: Either employers must pay at least a living wage—which in most restaurants above the fast food level would be far below what servers actually do take home— or you will continue to see complaints that the consumer is paying an exorbitant price for a night out.
You can pay a high price within the European system, too, but the anxiety and insecurity that comes with the plopping down of the bill in the U.S. is completely moot in Europe. And so the debate may never end, even as Americans tip more and more to servers they somehow believe need to be subsidized when they are making incomes at or above the median national household income of $70,000.