Is tipping falling out of favor? 
Restaurant association president says practice promotes good service, retaining staff


March 11, 2017

WAUKESHA — To tip or not to tip — that is a question increasingly being debated as more consumers express an opinion that wait staff should be paid a decent wage that does not necessitate a tip, while others feel that tipping guarantees good service.

Edward Lump, president and CEO of Wisconsin Restaurant Association, said there hasn’t been much interest in Wisconsin to move away from the tipping model. He said in other states, such as New York, a few restaurants did eliminate tipping but did not find it a success because wait staff tends to make more money with tips than a guaranteed wage. And when they don’t make as much money, they quit, Lump said.

The restaurant-food service industry is the single biggest employer of near-minimum-wage workers, with 3.75 million people, or about 18 percent of workers, followed by grocery stores with fewer than 1 million, according to the Pew Research Center.

Saru Jayaraman, director of the Food Labor Research Center at the University of California at Berkeley, advocates abolishing restaurant tipping in favor of a $15-an-hour minimum wage as the best way to economically uplift the working poor.

She recently spoke to about 200 labor activists, students, restaurant owners and others at the University of Minnesota business school. She said tipping is rooted in a time when women and minorities were not entitled to fair wages and relied on the gratitude of customers.

“Employers should pay workers, not customers,” said Jayaraman, a Yale Law graduate who worked in restaurants as a student and gained renown for a 2014 book, “Behind the Kitchen Door.” “Restaurant industry workers reject this feudal system.”

Reluctance to raise prices

For those wait staff employees who work at a higher end restaurant, they tend to view themselves as professionals who are used to making a higher wage, Lump said.

So for restaurants, the benefits of maintaining tipping is they can keep a more professional wait staff, and it’s hard to pass the cost to cover the wages onto the customers.

“It’s very difficult for restaurant operators to raise prices to make up those wages,” Lump said. “There is a reluctance, there is a price resistance.”

For consumers, Lump said, a benefit is they traditionally get better service when tipping is involved, which gives them more control over the total amount they pay for a meal. He said if the cost is all incorporated into menu prices, customers cannot adjust the amount they pay based on quality.

According to a 2014 Moneywatch news story, a survey from consumer research firm found that 46 percent of Americans are tipping less now than five years ago.A downfall of tipping for wait staff is if there is a week of bad weather and business is down at a restaurant, resulting in fewer tips, Lump said. However, in Wisconsin, waiters are guaranteed to make the minimum wage of $7.35, with the business making up the difference.