Two years ago, I moved to Washington from Utah. One of the first things my wife and I did on arrival was go to a restaurant, where we tipped our waiter somewhere between 15 and 20 percent of the bill.
This is by no means an unusual experience, but as Seattle ramps up its minimum wage, and other cities such as Tacoma consider jumping into the $15-an-hour fray, the ubiquitous tip has become a topic of discussion. Some restaurants are eliminating tipping altogether, opting instead to raise prices or levy a service charge. Before Seattle’s wage law was passed, servers at higher-end restaurants and bars expressed concern that the higher wage would have a negative impact on their cumulative income.
But lost in the discussion about $15 wages cities is a simpler question, one applicable to diners throughout the state: Why do Washingtonians tip their servers at all?
In Utah, the minimum wage for tipped employees is just $2.13 an hour, so I tipped servers to compensate for their low wages. Since restaurants weren’t paying servers the full minimum wage, it was up to the diners to make up for the difference. I brought that mindset out here, but I didn’t know then that Washington is one of seven states in which the tipped minimum wage is equal to the state minimum. Thus, servers here are making $9.47 an hour, not the federally mandated minimum of $2.13.
Even after learning servers earn the full minimum here, though, I continued tipping 15 to 20 percent. According to Michael Lynn, a Cornell University professor who has written more than 50 academic papers about tipping, I could be a case study of why diners continue to tip servers, regardless of their wage.
“First off, it’s not clear to me everyone is aware of the discrepancy in their (state’s) tipped minimum wage,” Lynn said. “Just as you didn’t know, lots of people don’t know, so that’s going to minimize differences. Secondly … making up for low wages arguably isn’t a major motivation for tipping.”
Less than half of Washingtonians were born in the state, so it’s likely many are unaware of their servers’ wages. But Lynn touches on an interesting point — even after wages are known, tip percentages stay pretty consistent. According to data Lynn has collected for a yet-to-publish study, there is a negative correlation between tip percentages and a worker’s wages, but the difference is small: For every dollar increase in minimum wage, he found, tips drop by 0.12 percent (so Washington servers would be tipped 0.88 percent less than Utah servers, even though their wages are 438 percent greater).
So what is the motivation that keeps Washingtonians tipping in the normal range? Lynn’s best guess: peer pressure.
The reasons most cited for tipping are rewarding good service and altruism, but the evidence says those aren’t the actual reasons our tips fall in a consistent range. “Rewarding service is the dominant one, and that’s just not true. And altruism, I don’t think, is the dominant explanation because if it was, tips would be more strongly related to income. I think tips are mostly driven by social obligation, and the norm across the country is to tip 15 to 20 percent.”
The topic is a charged one for restaurateurs — multiple establishments with Eastside and Seattle locations declined to speak with 425 Business for this story. But track the commentary around Seattle’s wage hike, and the industry’s stance is clear: it likes tipping the way it is.
“I like the system where people are rewarded for providing better service,” said John Howie, who operates multiple Eastside restaurants and the Sport Restaurant near the Seattle Center. “I don’t want to be charging for better service that is then split between everybody who is there. It doesn’t incentivize someone to do the right job.”
Howie, who pays all his waiters minimum wage, said his waitstaff makes a living wage — about $20 per hour at the lowest end, including tips. But, as Lynn’s work shows, server pay isn’t as merit-based as restaurateurs claim. If the average diner won’t tip below 15 percent, then that’s either a baseline reward for crummy service or, in effect, a service fee.
So why can’t restaurants just raise prices 15 percent and rid customers of the requisite tip? “To be honest, it would probably work better for all restaurateurs if we could just raise our prices and pay servers and cooks and everybody else out of that pool, because there is a compensation discrepancy” — kitchen staff routinely make less than front-of-the-house workers — “and if we just charged more and were able to pay whatever we want to pay them, then we could probably close the gap on those discrepancies. But I think you’ll lose creative, talented (servers) if you do that.”
Top servers, of course, could be compensated high enough to match their tipped income. But Howie said that would be a challenge, and that a tip economy already does that in an equitable fashion between waiters. “Say I know that Bob gives better service than Tim,” he said. “Well how do I know that now? Because Bob gets better tips.”
There are workarounds, of course. Other metrics — even as simple as visual observation — could be used to determine waiter pay. But what would happen if restaurants ditched tips altogether, if they raised prices and found a fair way to pay their employees?
“People are going to start tipping on top of service charges,” Lynn said. “It might not happen immediately, but they’ll do it.”
So if the drive for a higher minimum wage hits the Eastside, your meal will likely get more expensive. Blame it on peer pressure, and remember — it’s rude to tip below 15 percent.