Tipping

[sooner88]

I've always been told to tip when getting my haircut... I'm not sure if that is customary, but pretty much everyone I know does. It's another service where tipping seems unnecessary.

[Pete]

I've always been told to tip when getting my haircut... I'm not sure if that is customary, but pretty much everyone I know does. It's another service where tipping seems unnecessary.

It wasn't customary until somewhat recently.

Don't know how that industry operated for so long and the workers didn't starve to death until this changed.

[Jersey Boss]

It wasn't customary until somewhat recently.

Don't know how that industry operated for so long and the workers didn't starve to death until this changed.

I wonder if this changed at the same time that men were abandoning the traditional barbershop for stylists. It is also my understanding that the owner of the salon is not tip eligible.

[TheTravellers]

I've always been told to tip when getting my haircut... I'm not sure if that is customary, but pretty much everyone I know does. It's another service where tipping seems unnecessary.

I go to the same place to get my hair cut, generally get the same guy, tip him decently since he can hold a conversation and does a good job (neither of which always happen when I get someone else, so I generally don't tip when I get someone else and they don't do as good as he does).

[Jersey Boss]

As I've mentioned before - how do restaurants in Europe have really good servers and service and meals are still affordable, yet they don't tip (in general) over there? "Service charge" is added to the bill, yep, know about that, but do the servers just work for lower wages and are OK with it compared to servers here in the USA? How does it work over there yet it just can't ever work over here (according to a huge amount of people) or you'll have astronomically high food prices and/or really crappy servers?

Your post makes me think of those who argue that universal healthcare "just won't work in this country", regardless that the rest of the industrialized world has it. Nor is any other country with universal care looking at the USA system as worthy of implementation in their country.

[Roger S]

I've always been told to tip when getting my haircut... I'm not sure if that is customary, but pretty much everyone I know does. It's another service where tipping seems unnecessary.

Considering it takes them longer to put on the apron than it does to buzz my head... Pretty much every $ I hand them should be considered a tip..... And I still go to an old school barber that does $5 haircuts..... He's making a monster profit on me!

[sooner88]

Considering it takes them longer to put on the apron than it does to buzz my head... Pretty much every $ I hand them should be considered a tip..... And I still go to an old school barber that does $5 haircuts..... He's making a monster profit on me!

I've gone to the same barber for 15 years until recently. I thought the jump to $25 from $15 was still pretty good, but not compared to $5!

[TheTravellers]

Your post makes me think of those who argue that universal healthcare "just won't work in this country", regardless that the rest of the industrialized world has it. Nor is any other country with universal care looking at the USA system as worthy of implementation in their country.

"American exceptionalism" - https://en.wikipedia.org/wiki/American_exceptionalism

Which to me is BS, we're not that unique, except that we have so much political nastiness/idiocy, and are an oligarchy/plutocracy basically run by corporate money right now, which a ton of other first-world countries aren't. If we could get over our stupid, horrible, divisive politics and get out from under our corporate rule, we might have a chance for things that work for other countries to work here, but the corporations will not allow it.

[Roger S]

I've gone to the same barber for 15 years until recently. I thought the jump to $25 from $15 was still pretty good, but not compared to $5!

Well I was going to a place on May that had $8 haircuts. Then when they raised to $10 for my two minute haircut I started looking for an alternative and found a brother and sister owned shop on Capitol Hill that do $5 cuts.

[AP]

I post this every time the tipping discussion comes up: Should Tipping Be Banned? - Freakonomics Freakonomics

It convinced me. I'm in favor of banning tipping.

Btw, there is a more recent Freakonomics episode (March 9th) that should be listened to alongside this episode. The No-Tipping Point - Freakonomics Freakonomics

[Teo9969]

Jersey, to answer your original question:

The employer must make up the difference between hourly+tips and minimum wage if hourly+tips is less than minimum wage. However, this takes place over an entire pay period.

If John works from 4:00 to 10:00 and makes $22 in tips and $13 in hourly, he makes $35 all day or $5.83/hour
The next day he works from 4:00 to 9:00 and makes $39 in tips and $11 hourly, he makes $50 for the day or $10/hour.

Averaged together he makes $85 over 11 hours for $7.72/hour. So the employer would not need to make up anything if he repeated this exact scenario 5 times over a two week period.

Assuming only 75% of the time you're clocked in you are taking care of tables, you would still only need to sell approx. $70/hour and average 13%-15% in tips (depending on tip-out to bus/host/bar/event staff) to make minimum wage and you'd have to do it over and over and over again throughout the pay period.

I could maybe see the problem in a super small town, but overall, there really shouldn't be an issue in any decently populated area for a server to average minimum wage over a 2 week period.

[dankrutka]

Btw, there is a more recent Freakonomics episode (March 9th) that should be listened to alongside this episode. The No-Tipping Point - Freakonomics Freakonomics

This was a very good listen. Unfortunately, I listened to an episode on education too and I was disappointed in their lack of research or perspectives. They generally do great work.

[AP]

I listened to this one yesterday and I thought it was really good: Preventing Crime for Pennies on the Dollar: A New Freakonomics Radio Episode - Freakonomics Freakonomics

[jerrywall]

It wasn't customary until somewhat recently.

Don't know how that industry operated for so long and the workers didn't starve to death until this changed.

What do you consider recent? I've tipped when getting haircuts my entire life, so going back 40 years. Depending on the place, many hair stylists are paying booth rental fees or are working primarily for tips.

[Uptowner]

This was a very good listen. Unfortunately, I listened to an episode on education too and I was disappointed in their lack of research or perspectives. They generally do great work.

As I mentioned in an above post. Pretty much any statistic can be skewed or improperly cross-referenced, taken from a biased sample group, too small of a sample group, etc. Freakonomics just uses these tactics to grab the attention of the user and rattle their cages. I took 2 calc classes, micro and macro economics, and statistics from one professor at university because I liked his style. He would spend entire lectures debunking stats articles from the 2005 Freakonomics book, then explain why they were skewed. I trusted his reaearch, he was Ph.D. Math, statistics, CPA and bar certified.

[ctchandler]

What do you consider recent? I've tipped when getting haircuts my entire life, so going back 40 years. Depending on the place, many hair stylists are paying booth rental fees or are working primarily for tips.

JerryWall,
I'm glad you mentioned this. I had thought about posting, but decided not to (too lazy I guess). I was tipping in the early 60's and I'm not the exception. I happened to be in California at the time and it was customary and expected for a good haircut and good conversation. That's over 50 years.
C. T.

[dankrutka]

As I mentioned in an above post. Pretty much any statistic can be skewed or improperly cross-referenced, taken from a biased sample group, too small of a sample group, etc. Freakonomics just uses these tactics to grab the attention of the user and rattle their cages. I took 2 calc classes, micro and macro economics, and statistics from one professor at university because I liked his style. He would spend entire lectures debunking stats articles from the 2005 Freakonomics book, then explain why they were skewed. I trusted his reaearch, he was Ph.D. Math, statistics, CPA and bar certified.

Sure, but on complex economic matters, there is almost always disagreement. Freakonomics often brings on top experts in their field. On the education episode, they didn't bring on any education experts (in particular teacher education experts), but that's the norm for the media.

[Jersey Boss]

Teo, thank you for your response. I am going to guess that you have experience in this area. One of the questions I posted was have you(collective) ever known a business to supplement a server who after paying the others with tips fell short of minimum wage? How does an owner even know how much a server makes if some tips are cash versus some on plastic? You mention that the server is responsible for also paying the host/hostess, bar keep, event staff. Do these folks also get 2.35 an hour? I am one who believes that at a minimum everyone gets at least min. wage as a floor. While some claim to know folks making 50k as servers I would be willing to wager there are a lot more single moms trying to make it work for them working at Denny's than servers at an upscale steak house making 50k a year.

[jerrywall]

When I waited tables, they used CC and check receipts to track, and for the tip pool (for the bussers and such). You were "supposed" to also report in your cash tips, but most folks didn't, or under reported, and it was sort of understood. Now, I never had a chance when waiting to make less than minimum wage (in fact, waiting tables in the early 90's was good for 20+ an hour even at a cheap mexican restaurant), but they would have used the reported tips for calculation.

[Teo9969]

Teo, thank you for your response. I am going to guess that you have experience in this area. One of the questions I posted was have you(collective) ever known a business to supplement a server who after paying the others with tips fell short of minimum wage? How does an owner even know how much a server makes if some tips are cash versus some on plastic? You mention that the server is responsible for also paying the host/hostess, bar keep, event staff. Do these folks also get 2.35 an hour? I am one who believes that at a minimum everyone gets at least min. wage as a floor. While some claim to know folks making 50k as servers I would be willing to wager there are a lot more single moms trying to make it work for them working at Denny's than servers at an upscale steak house making 50k a year.

I have never known such a case to happen...usually if the restaurant is dead enough that you are at risk of making terrible money you get cut early in the shift. Getting cut means you no longer take any tables and you begin to do whatever "closing duties" you might have to be able to clock out and leave. So you have a terrible few hours, but you more than make up for it in your next shift. Additionally, most restaurants know what times of year are busy and what times of year are slower, so they schedule less servers in order to avoid over-staffing. Also, if it does indeed happen, I imagine it's on the employee to bring it to the owner's attention. and it's hard to see a situation in which a server in that position would either say anything or even realize their rights.

A server's wages are determine by their hourly rate + their claimed tips. There is no recourse for an owner to force a server to claim all of their tips, but given the ubiquity of credit cards in today's market, most Point-of-Sale systems keep track of tips and force servers to claim at least what they made on credit card tips. That will generally be enough to bump a server up to $7.25/hour over a 2-week pay period even after tip-out.

Most restaurants don't have event staff, and if they do, nobody working full-time in the Front-of-House is making poverty wages. Most restaurants do have bar/host/bus staff. Bar staff generally also makes $2.13/hour, but they make their own tips, and unlike servers, generally keep all of their tips (i.e. they don't pay a "tip-out"). Bartending is generally the best job to have in a restaurant, and they often make more than any base level management.

Hosts and Bus staff are usually apart of the pool that is called tip-out. Tip-out is a % of sales that every server pays to the pot. Most places this number is between 3% and 5%. If it's higher than 5% it's usually a nicer restaurant. But every restaurant has their version and it ends up generally being in that area. Some make you tip-out on sales+tax some only on pre-tax sales.

So if John sells $500, and he tips out 4%, then he contributes $20 to the tip-out pool. If he averaged 20% on $500 in sales, he walks home with $80. If he averaged 10% tips on $500 he walks home with $30. Either way, he contributes $20 to the pot.

A super-shady business owner could exploit his staff, but on average, that simply doesn't happen. And there are so many restaurant jobs in the world that the average server won't put up with shady business owners.

As to the demographics of the staff in the restaurant industry: The vast majority are non-married, under 40 individuals who are trying to figure out what they're doing with their life. There are career servers, professionals trying to make some extra money on the side, single-parents trying to make ends meet (the latter is usually in the kitchen more than the FOH), and other demographics, sure...but the vast majority (I'd guess over 75%) are young people either in school or who don't know what career path they want to take and they're hanging out in a low-responsibility, incredibly flexible*, reasonably paying job. Most host/bus staff make minimum wage or a little more. Most servers probaby average $9-$14/hour in the OKC market.

*This is the thing that as a server most pains me about the idea of going to a set-wage. I have worked in the industry for 10 years, and you just can't beat the ability to take off whenever you want and still have a job. The downside is you're working when everyone else is not, and you are committed to working most major holidays. But to be able to decide you want to go to the movies tonight and find someone to replace you in a relatively hassle free manner (or potentially be able to say "can I have the night off?" and get a "yes" response) is amazing. You just can't do that as an office manager. You also can't do that if you move to an hourly-wage based system where people start counting on their shifts to make x amount of money. You also can't have an incredible week that enables you to say "screw it...I'm going to Vegas in 2 weeks".

It's a delicate eco-system and more often than not, it works to the "advantage" of the demographic working in the industry. It's far from perfect, but once you get the hang of it and you decide it's for you, the benefits outweight the negatives...ESPECIALLY when you get to the professional level and you're working in upscale environments. It's quite nice to have a $35k/year job where you work 30 hours a week, 44 weeks a year...that's just not going to exist in 10-20 years when we've done away with tipping. It'll be a $40k/year job working 35 hours a week, 48-50 weeks a year. At that point, I'm out, because there's very little upward mobility in the industry.

[Urbanized]

^^^^^^^
Perfectly described. In these discussions, people who would like to do away with tipping have usually not spent much or any real time in the industry. I also think you will rarely find an experienced server who would agree with the idea of straight wage, no tipping.

[jerrywall]

The other thing I've seen, for tip pool, minimum wage, and tax reporting, is some restaurants working off of the assumption of 15%. So they'll automatically assume the waiter got 15% of the sales for their tables, and use that to calculate their share of the tip pool and to report. What this means is that if you tip say 10% (or even less), you're not just giving them less money, you could be costing them some of their tip money from other tables.

[Teo9969]

The other thing I've seen, for tip pool, minimum wage, and tax reporting, is some restaurants working off of the assumption of 15%. So they'll automatically assume the waiter got 15% of the sales for their tables, and use that to calculate their share of the tip pool and to report. What this means is that if you tip say 10% (or even less), you're not just giving them less money, you could be costing them some of their tip money from other tables.

In many casual dining restaurants, paying to wait on a table probably happens at least once every other week, if not more frequently. It's one of many tables, so it's not the end of the world. But it's frustrating. You learn to not care and move on to the next table. You learn pretty quickly that your service only matter marginally and that people are going to tip what they tip regardless of the service you provide. I've given piss poor service to tables and gotten 25%, and I've given amazing service to tables and gotten 8%. What matters more is your ability to make the most out of each night you're there in terms of sales and getting people in your section.

And a bit of info: the "industry standard" (expected tip) is 20%, but the average server probably walks home with 12% to 15% most nights. So the hope is to sell no less than $600. That should land you at least $10/hour.

[Jersey Boss]

As to the demographics of the staff in the restaurant industry: The vast majority are non-married, under 40 individuals who are trying to figure out what they're doing with their life. There are career servers, professionals trying to make some extra money on the side, single-parents trying to make ends meet (the latter is usually in the kitchen more than the FOH), and other demographics, sure...but the vast majority (I'd guess over 75%) are young people either in school or who don't know what career path they want to take and they're hanging out in a low-responsibility, incredibly flexible*, reasonably paying job.

nm- embed chart will not post. Chart was in this article: http://www.epi.org/publication/waiti...-minimum-wage/ Charts in article show demo of tipped workers by age , maritial status etc. Also another chart showing gap between service worker min and other workers min. To be clear I am not against tipping but do feel the min. wage should be applied to all workers.

[Thomas Vu]

And a bit of info: the "industry standard" (expected tip) is 20%, but the average server probably walks home with 12% to 15% most nights. So the hope is to sell no less than $600. That should land you at least $10/hour.

Holy crap I thought average was maybe 15. Guess I'm being average the entire time.