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Inflation isn’t stopping people from going out, but they are becoming more frugal with tips, some waiters and bartenders say. Service sector workers rely on tips to make ends meet.
When Daniel Westwood, who works as a waiter at a daiquiri bar on the Las Vegas Strip, hands checks to customers, he tells them, “I appreciate tips. This is how I pay for my wife’s Amazon card.”
Such comments are frowned upon in the bartending community, he said. But with so many customers leaving petty tips this summer or ripping you off outright, your not-so-subtle reminder feels like a necessity.
“There are people who look me right in the eye and press ‘no tip’ at the credit card processing machine, and they just don’t care,” said Westwood, 35.
He has been a bartender in Las Vegas for nearly two decades through multiple recessions. But even during those tough times, customers tipped him appropriately, he said.
The change today “has 100% to do with inflation,” he said. “I hear customers say all the time, ‘It’s too expensive. We can’t tip.'” Recently a customer left a handful of coins as a gift. tip on a $120 bill they hoarded, she added.
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Instead, many people eating out, particularly in cities with a high volume of tourists, are leaving smaller tips, servers and bartenders told USA TODAY. That makes it even harder for those workers to cope with inflation.
Westwood earns $12 an hour not including tips, unlike many service sector workers who earn minimum wage with tips, which allows employers to pay workers below minimum wage if they can earn at least minimum wage with tips. tips.
Before the coronavirus pandemic, when he worked various waiter jobs at high-end restaurants and bars, he made $250 to $350 a day in tips, he said. At those levels, he was able to set aside money to start his own business, Westwood Cocktail Innovations, selling cocktail-smoking kits he made himself.
But lately, he’s earning less than $200 a day in tips, and as a result, he’s out of business. “I’m really pinching my pockets and saying, ‘Shit, shit, shit, I haven’t paid my water bill in two months.’
“Our tip money is what we live on,” Westwood said. He is the main breadwinner for his family, which includes his three children and his wife.
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Most of what waiters and bartenders earn comes from tips, according to findings published in 2018 by Restaurant Opportunities Centers and the National Employment Law Project drawn from the Census Bureau’s Current Population Survey.
“If I lived solely on what I earn per hour, I couldn’t afford to live here with my family,” Westwood said. “We’d be in a little run-down studio in a really bad part of town.” Right now, he pays $2,000 to rent a four-bedroom house outside Las Vegas. Six years ago, he said, he paid about $1,000 a month for a even larger four-bedroom house in the same area.
Ashlee Eisenstein, a waitress at 5& Diner in Phoenix, Arizona, earns a tipped minimum wage of $9.80 an hour. And like Westwood, she’s been scammed more often than ever in the last seven years she’s worked at the restaurant. If they do tip, it’s often less than 10%, she said.
“It’s like if you can’t afford to go out to eat, don’t go out. I don’t think they realize I don’t make minimum wage and rely on tips to earn it.”
That’s a stark contrast to what he was experiencing at the height of the pandemic when the restaurant was only doing takeout orders and “people were very generous with tips.” And when customers started receiving stimulus checks, tips increased even more, she said.
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Fewer Americans are tipping waiters, but tip amounts are rising slightly
Some 73% of Americans say they always tip servers when dining out. That’s 4 percentage points lower than in 2019, according to a nationally representative survey of more than 2,600 adults published by CreditCards.com. The numbers are even bleaker for food delivery workers: 57% of people say they always tip, compared to 63% in 2019.
“Inflation is a logical explanation,” said Ted Rossman, senior industry analyst at CreditCards.com. But he suspects that’s not the only reason people tip less. “I just have to wonder: do some people tip less because they waited too long for a table? Was your food slow? Or did something not cook quite right?
Jordan White, 33, who works part-time at a New York City blues club, said it has always been common for customers to rip her off, especially since the club attracts many European tourists who are not used to it. to tip She doesn’t think inflation is driving customers not to tip her these days.
In fact, after the club, which is in Greenwich Village, recently followed his recommendation to add tip suggestions to bills, he has seen his tips increase. But attendance at the club, which has a $20 admission, has dropped sharply since Memorial Day. She said that’s probably because people’s budgets aren’t stretching as much with inflation, so they visit the club less.
White also works at a bar in Long Island City that he described as “local-centric.” Customers tend to be regulars who tip you relatively well. At the club, he earns $50 to $65 per shift and at the bar, he earns $25 to $30 per shift. Lately, tips for a typical day run to about $200.
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The food and beverage industry has been one of the hardest hit by labor shortages amid the Great Renunciation. In April, the 1.3 million job openings represented nearly 12% of all job openings nationwide, according to the latest vacancy and job turnover report released by the Bureau of Labor Statistics.
Average hourly earnings, which include tips, rose 8.7% for full-service restaurants and 9.2% for bars and other drinking venues from last May through April of this year, according to BLS data. Nationwide, average hourly earnings increased nearly 5% during that period.
Overall, tips at quick-service and full-service restaurants increased slightly in the first quarter of this year compared to a year ago, according to data from Toast, a point-of-service payments company. On average, people tipped 19.9% on transactions at full-service restaurants compared to 19.8% last year. And at quick service restaurants, people tipped 17% compared to 16.9% last year.
“When diners cut their tips, or worse, don’t tip at all, it further exacerbates the inflationary pressures we all feel,” Michelle Korsmo, president and CEO of the National Restaurant Association, said in an email. statement to USA TODAY: “Tips show appreciation for a service provided and help employees build a great career with high earning potential.”
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The National Bartenders Association did not respond to a request for comment.
Lesley Smith, a bartender at The Bull, a three-level dive bar in Key West, Florida, isn’t experiencing that appreciation and support.
“A lot of people are scared by higher menu prices,” he said, adding that most drinks are up about a dollar from last year. On a typical weekend night, he earns about $700 in tips. But last Sunday “was one of the worst of the whole year.” Earned less than $200 in tips.
“I was like, ‘Shit, I’m definitely going to burn through my savings this summer so I don’t live on ramen.'” Last month, his electric bill was 35% higher than the previous month.
It’s typical for cruise groups that come to Key West not to tip, says Smith, 43, who believes they “forget they’re not on the ship where they don’t have to tip.” But Miami hikers, he has noted, have become “a lot more frugal with tips.”
“Somebody bothered to write a quarter on your credit card receipt.” Even some locals have been scamming her, which used to be even rarer. “Everything else is getting a little more expensive, but our salary is going down drastically.”
Elisabeth Buchwald is the personal finance and markets correspondent for USA TODAY. You can follow her on Twitter @BuchElisabeth and sign up for our Daily Money newsletter here
Source: www.usatoday.com