This is a new mini-series I'm trying out. I think Steemit is the perfect place to publish this, since there are so many people on here from all over the world.
I'd like to take several topics and explain how they work, in simple terms and as neutrally as possible. There were a few ideas I had rolling around in my head, but this comment thread pushed me to action. So far, I plan to cover tipping (because of this article and the comments on it), health care (because it fascinates me) and the Bill of Rights. Definitely open to requests for more topics!
Today, I'll try and explain tipping in the United States, specifically with regard to restaurant servers.
Background
When you go out to eat at a restaurant in the United States, you have a few options. I'm going to break them down into 4 categories:
- Fast Food (McDonalds, Burger King, Kentucky Fried Chicken, etc.)
- Fast Casual (Panera Bread, most deli-style restaurants)
- Casual (Applebees, TGI Fridays, Denny's, etc.)
- Fine Dining (Ruth's Chris Steak House, Michelan star rated restaurants, etc.)
At the "fast" options, you order your food at the counter and bring it to your table yourself if you want to eat there. You also get your own drinks. At Casual and Fine dining restaurants, you are "waited" on by a server, who takes your order, brings you your drinks, brings you your food, and brings you your check when it's time to pay.
The United States is notorious for being one of the only countries in the world where you are expected to tip your waiter or waitress regardless of the quality of their service. Our expected tips are also in the 15% range, with anything less than 10% being considered a "poor" tip and anything over 20% being considered a "good" tip. This is extra money paid in addition to the price of your food and drinks.
So why is the United States this way?
Root Cause
The non-political answer is: because the minimum wage in the United States for servers is actually far lower than the minimum wage for all other types of workers. If you get an entry-level job say, washing dishes or digging ditches, the US Government says your employer must pay you at least $7.25 an hour. However, if you get a job waiting tables, your employer is legally allowed to pay you a little as $2.13 an hour! This is less than 30% of the minimum wage.
The political answer is: because labor in the United States is notoriously weak when it comes to the battle against corporations. Various industries, most notably public sector employees, tradesmen, and manufacturing, have succeeded in establishing and growing unions to fight for their interests. However, the restaurant industry (along with retail) is virtually devoid of unions. Workers have very little power over their employers in the food industry, and since the jobs require very little training, there is a lot of competition in the labor force. All these effects combine to create a history where restaurants have been able to secure a lower minimum wage for their tipped employees.
Different states and cities have different minimum wage laws, and some states do require employers to pay their servers a higher base wage. Even in the states that don't, the Federal Government requires the employer to make up the difference between the lower hourly wage and minimum wage if the employee does not earn enough in tips. But the bottom line is that thousands of servers in the United States are only earning $2.13 an hour, and they are relying on you to make up the difference.
A Night Waiting Tables
I worked in a restaurant (Chili's, for anyone wondering) for over two years. During that time, I was a host, carry-out, busboy, and waiter. I have friends and family members who have waited tables more recently, and I gathered their inputs. So let's walk through a typical Friday or Saturday night dinner shift, which will be the most lucrative shift of the week.
Most restaurants will divide tables into sections, with the average section being 4 tables. On busy nights, every section will have a dedicated waiter. Most shifts start at around 5 PM. You might get your first table 10 to 15 minutes after that. Most tables will be either 2 people or 4 people. Families are common depending on the restaurant, and the occasional large party will be seated in your section, but let's assume that all night long you have tables of 2 or 4 people rotating through your section of 4 tables.
Most people will take an hour or so to eat their meal. You also have to add in time for the table to get cleaned. So over the course of a night, you might get your last table sometime around 11 PM. Your section would look like this:
So that's 16 tables over the course of the night. Assuming an average of 3 people per table and an average check of about $20 per person, your total sales for the night comes to $960. Assuming you were getting tipped an average of 15%, that means you go home with $144 for just 6 hours of work, or $24 an hour, right? Not so fast.
Close-Up and Tip-Out
Sure you got your last table at 11, but that doesn't mean you can leave. You're there until at least midnight. But then you have to clean your section and usually you also have to do some kind of rotating maintenance duty (like filling salt shakers or wrapping silverware). So even though you came in at 5, you're realistically not leaving until about 1 in the morning.
On top of that, at most restaurants, waiters are required to "tip out" their support staff. Where I worked, I had to pay 1% of my total sales to the busboys to split, 1% to the QA person putting together food on the trays, a couple dollars to a dedicated "runner" for the evening, and a whopping 1.5% of my sales to the bartender. So on a night of $960 in sales, my tip-out is going to looks something like $35. At my brother's job it was a flat 5% -- so his would be even more.
So between cleaning and tip-out your $144 for 6 hours of work is now $109 for 8 hours of work, or $13.63 an hour. Still higher than minimum wage, and you still have that paycheck coming though, right?
The Tax Man
Well, sort of. Most server's paychecks end up being a big fat zero. Even though they were making $2.13 all night, taxes have to come out of somewhere. That small hourly wage is usually just enough to cover the taxes you owe on your $109. Here's what that looks like for someone who does this shift just two nights a week (Friday and Saturday)
Source
Now, the hourly pay only added up to $34.08, and the tips were $218. So the paycheck in this example would only be $4.68. Barely makes a difference. And I knew plenty of servers who ended up with zero'd out paychecks because they were working more hours and paying more in taxes because of it. My example also assumed there is no state tax (only true in a few states).
Conclusion
Waiting tables is not a lucrative job at most casual dining restaurants. Because of slow shifts during the week, most servers are not making much more than $10-12 an hour when all is said and done. This is on the low end of the pay scale in the United States: the average hourly wage in the USA is $22.65.
Like it or not, tips make up the vast majority of a server's wages. If you do not tip your server, you are withholding money they rely on for their livelihood. If you only tip a few dollars on a large check, you are withholding money they are relying on for their livelihood. Now, you might have a good reason for doing so - maybe they were downright horrendous to you.
But if the service was slow and your food didn't come out properly... you should still consider leaving at least 10%. Talk to the manager and explain your dissatisfaction - they will likely be willing to discount your check or take an item or two off. Let the restaurant take the hit, not your waiter. If they are truly a garbage server, they'll be fired soon enough. More likely they were just having an off night.
If you were fine with your service but you disagree with how the system works overall, you are only hurting the server by not tipping. The restaurant owner could not care less.
And most importantly of all: if you cannot afford a 15% tip on your meal, then you simply cannot afford to eat at that restaurant. Go somewhere cheaper.
Yikes, I kind of got carried away at the end there. Can you tell I used to be a waiter? I'll step off my soapbox now.
References
- https://www.businessinsider.com/how-much-it-costs-to-eat-at-resaurants-2015-3
- https://www.dol.gov/whd/state/tipped.htm
- https://scholarship.sha.cornell.edu/cgi/viewcontent.cgi?article=1849&context=articles
- https://www.adp.com/tools-and-resources/calculators-and-tools/payroll-calculators/salary-paycheck-calculator.aspx
- http://www.traveller.com.au/a-guide-to-tipping-in-the-us-when-do-i-tip-and-how-much-39x1t
- https://www.usatoday.com/story/money/2015/06/14/much-tip-depends/71137254/
- http://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/
@DollarsAndSense is a father, veteran, participant in the rat race, freelance writer, and volunteer EMT.
Unless otherwise noted, all text and pictures in this post are my own and may not be reused without my permission.
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