PDT 2/2 : Why has tipping increased?

[stinkypete]

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b) They are (finally) being paid their market worth.

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o rly? how is their market worth determined, if not by what the market is willing to pay for them?

[JaredL]

Diablito,

I think it could have something to do with minimum wage or some other low-wage standard.

To keep it simple let's say you want your servers to make twice minimum wage. If the minimum wage goes up (or you just pay the lower-level staff more) then restaurant prices will go up, but not by as much as minimum wage/staff wage has increased. Therefore, for servers to continue to make the same relative to the lower guys they will have to get a higher percentage in tips.

Say you pay the dishwashers et al $10 and hour and can charge $100 for a meal. Customers tip 15 and the waiters earn 5 bucks more, or 150% of the wage of the dishwashers. If you increase the dishwasher salary to 15 and charge 104 for it then tipping 15 percent now means that the water gets $15.60, just barely more. Bump her up to 20% and she makes $20.80 which is again about 5 bucks more.

Obviously I'm simplifying here but you can see the point.

[El Diablo]

Jared,

Lots of flaws w/ your explanation scenario. I'll let Mason or David elaborate.

[bmxicle]

Only read about half the posts so sorry if this has been covered.

I think it's quite reasonable to say that as wealth increases people will tend to tip more. This isn't a firm rule, but i think it is generally true. So the states has been continually prosperous for a long time, and thus an increase in tipping wouldn't be all that unreasonable. I also think this is partly your perception of it as when you were in college i'm guessing you were significantly poorer then you are now, and probably went out to dinner with poorer people and thus the "standard" tip was much lower like 10-15%. However, as you got older and you and your friends accumulated wealth you all would have started tipping more. So i think American prosperity has something to do with it, but i also think the increase in your wealth has even more to do with your perception of the incredibly important 2p2 issue of tipping. This is a rather extreme example but if you compare my wealthy poker playing friends, to my college friends you'll see an average tip of like 25% compared to like 5%, and it all has to do with wealth.

[SlowHabit]

Diablo,

The increase in tipping is due to a higher standard of living since the US economy has been prospering for past 10 years. While we the US did experience a recession after the dot com boom, those who could afford to go out then inevitably could afford to go out now, especially after the recent real estate boom where most thought they were set for life in terms of money. And as virtual net worth increases, so does spending.

Another point is the rich keeps getting richer. As the elites keep accumulating moneys and start balling at fancy restaurants with their standard 20%+ tips, I would feel kind of cheap if my tip percentage is too below that amount. Thus, I think the elites' generosity plays a big role in tip incrementation. I can just imagine going to a fancy restaurant and witnessing two hotshots out tipping each other just to feel good about themselves. If I was rich, I would probably do it [img]/images/graemlins/cool.gif[/img]

[JaredL]

Question I just thought of, that may or may not be relevant.

Is this happening elsewhere?

In Europe, where tipping isn't nearly as common, is it significantly more common than 10 years ago? Are people tipping more than just the leftover change these days?

[El Diablo]

All,

Jared asked me to elaborate. Among other things.

a) there is not a fixed service fee in america
b) customers do not know how much dishwashers get paid
c) customers do not give a [censored] about ratio of waiter:dishwasher pay
d) minimum wage has increased at rate far below rate of restaurant price increase