To Tip or Not to Tip: Debunking the Necessity for Americans – My MBA Career

Last Updated on August 28, 2023 by Robert C. Hoopes

Title: The Growing Debate Surrounding Tipping Practices in the US

In recent years, Americans have found themselves increasingly faced with the question of whether to add a tip to their checks when making various purchases. What was once a customary practice confined to restaurants and bars has now expanded to include industries such as coffee shops, ride-sharing services, and even computer check-out screens at popular establishments like Starbucks and pizza shops. This shift has brought about various debates and concerns regarding the rules, etiquette, and potential consequences associated with tipping.

For many customers, the pressure to tip in these unfamiliar contexts can be confusing and uncomfortable. A recent study revealed that participants who encountered tipping screens while making payments experienced negative emotions about their overall payment experience. This suggests that the expansion of tip requests may undermine customer satisfaction and affect consumer behavior.

Tipping has traditionally provided an additional income stream for workers in industries like dining and hospitality, whose wages are often excluded from the federal minimum wage. However, with tipping options now being presented in businesses that do not rely on tips as a source of income, questions are emerging about fairness and wage inequality between front of house staff who receive tips and kitchen staff who do not.

One example is a butcher shop in Connecticut that includes tipping options, despite the fact that their employees’ wages remain consistent regardless of tips received. Critics argue that such practices only perpetuate an unfair system and create unnecessary confusion for customers.

On the other hand, some business owners and associations, such as the National Restaurant Association, advocate for the continuation of tipping. They argue that receiving tips allows businesses to keep their costs down, while enabling workers to earn higher wages and deliver better customer service. They also express concerns that eliminating tipped minimum wages or increasing base wages could lead to higher prices for customers and potential pushback.

Nevertheless, advocacy groups are urging for an increase in the federal tipped minimum wage, which has remained unchanged at $2.13 per hour since 1991, and is followed by many states. These groups push for a higher minimum wage closer to $15 per hour, arguing that it would provide a fairer and more stable income for all workers, regardless of their reliance on tips.

While the debate continues, some workers in the industry argue passionately against getting rid of the tipped wage. They believe that working for tips leads to better service and provides a means for them to earn higher overall income. They worry that eliminating the tipped wage could have a detrimental effect on businesses and potentially drive customers away from restaurants.

As this contentious issue unfolds, finding a balance between the needs of workers, employers, and customers remains a challenge. With different states and businesses adopting varying approaches, the question of tipping and its implications continues to be an ongoing subject of discussion, potentially paving the way for significant changes in the future.