Given how hard the average person tries to keep travelaffordable via a careful review of cheaptravel options, including cheap airplane tickets and cheap vacation packages, itmay seem strange to encourage people to start tipping 25 percent.
Tipping experts are starting to recommend higher tips as aresult of salaries of restaurant workers, who often earn a poverty level $2.13an hour before gratuities.
Some industry watchers want to see tipping go awayaltogether. The argument is that bywithholding gratuity payments a fundamentally flawed and unfair system willcrumble. However, unless the cost of thegratuity is included in menu prices, pulling tips will just hurt the servers.
While a handful of restaurants have done away with tippingand raised their menu prices, a Cornell University study found that higherprices would drive diners away. Itappears that price sensitive patrons like the illusion that their meals are cheaperthan they finally cost when tips are included.
Most servers embrace the practice of tipping, which totaled$40 billion in 2012. Even if thealternative was a higher base pay, many servers prefer tips in part because a portionof them often effectively go untaxed.
Understanding the economics of the restaurant business is away to understand the need for higher tips. On average almost four in every 10 restaurant industry workers earn ator below the federal minimum wage, even after tips are included. Servers experience almost three times thepoverty rate of the total workforce and rely on food stamps almost twice asmuch as the general population.
Ideally all restaurant prices would include the true costof the meal, including servers salaries. The practice of forcing workers to rely on gratuities to earn a livingis clearly not working for at least 40 percent of all servers. The current system that allows restaurantowners to legally pay below subsistence wages needs to be re-examined.
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