A Tip on Tipping
I always tip. Decently. In restaurants, pubs, hotels, taxis, hair salons, etc. Maybe it’s because I once depended on customers’ nickels and dimes during my short career as a waitress. Maybe it’s because my husband was a bartender when I met him—and continued the practice whenever we needed extra money in our cash-strapped young family.
Back then, a decent tip was 15% of the tab. In recent years, tips have gone up. In fact, the trend toward tipping greater amounts is gaining speed as credit card devices suggest card-holders consider adding tips of 25 or 30 percent—or more. If this persists, when I’m 80, I’ll likely be paying for my dinner twice—if I can afford to go out at all.
I have no qualms with the waitstaff who receive the tips I leave. (At least I hope they receive the tips I leave.) But I do have a problem with the system that pays service staff so poorly these workers must rely on tips to make ends meet. The US Department of Labor (dol.gov) tells me, “An employer of a tipped employee is only required to pay $2.13 per hour in direct wages if that amount combined with the tips received at least equals the federal minimum wage.” The federal minimum is currently $7.25/hour—not a livable wage.
If workers pay taxes on tips, some of the public’s investment winds up in the national treasury, which (theoretically) helps us all. But last week the US Senate unanimously passed the “No Tax on Tips Act,” and NPR tells me, “Congressional budget analysts project the provision would increase the deficit by $40 billion through 2028.” In other words, consumers are picking up the tab for workers’ wages, while the country goes deeper into debt.
My daughter is an Australian citizen. While visiting her Down Under, I had to continually be reminded that servers all receive a living wage and tips were not expected. Of course, I’m American, so I tip reflexively. Doubtless, Aussie service workers love to see American patrons.
On the flip side—when my daughter’s Aussie in-laws met me in Oregon for an American vacation, I had to teach them about tipping. I’d paid for the condo in which we were staying, so they decided to foot the bill for our meals out. I had to coach them on their obligation to tip waitstaff, and they were taken aback. I felt embarrassed that prices listed on American menus were not the whole truth.
The upshot is, service worker salaries are subsidized by the general public, so business owners—like our illustrious president—can legally skirt the responsibility of paying workers a living wage. And now we won’t even see a return on our money in the public coffers.
If, for some inexplicable reason, employers can’t be mandated to provide service workers adequate income, tips should be taxed—and employers should pay the tax. This feel good senate action, supported by Democrats and Republicans alike, is a smoke screen, giving the appearance that our government is helping poor workers, while in reality it is making the rich richer and depriving the citizenry the security of a national treasury.
I haven’t decided how I’ll react. Tip less? Not at all? Quit going out? At the very least, I want to holler publicly that the No Tax on Tips Act is merely a ruse to deflect Americans’ attention from the root of the problem: American service workers are denied a living wage while billionaire business owners make off with the loot. And the government’s blessing.