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Inflation is hitting everyone, but the worst of it is being felt by people with the lowest incomes, whose hourly pay tops out at the minimum wage. For many of these workers, employed in the service industry, tips represent the majority of their income and can be the difference between surviving and living in poverty.
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“Many people who work in the hospitality and service industries, such as restaurant waiters, hairdressers, valet, bartenders, and beauticians, rely on advice from clients for income,” said Laura Adams, personal finance expert at Finder. .com. “They typically earn a low hourly wage, sometimes less than minimum wage, and rely on tips to significantly supplement their earnings.”
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Considering this, it is evident that there is only one right move for a consumer to make, and that is to tip service workers and tip them well, especially if they provided top-notch hospitality. But what happens during inflation? Should we tip more?
The answer is yes. Let me explain why.
We have an empathy problem
First, we must acknowledge our own potential shortcomings in order to truly empathize with service personnel. If we haven’t had jobs that depended on tips in the past or present, we just can’t understand how important tips are.
“My previous job was a valet attendant at the Golden Nugget in Las Vegas,” said Corey Holtam, founder of SmallBizBuddha.com. “Now, I own a small tour and experience business where my staff still rely on tips for 10-20% of profits.”
In Holtam’s experience, tipping has always been a difficult business model to rely on for income because service workers can’t necessarily trust consumers to pay their fair share for a tip.
“The people you expect to tip haven’t lived before tipping,” Holtam said. “How can we expect someone to understand if they haven’t experienced the situation?”
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We need a budget for tips
Another problem is that we tend not to budget for tips when planning an experience that requires tips.
“At work, we do our best to provide the best service possible, but when a customer pays for an experience, it’s hard for them to throw cash at the service worker afterwards,” Holtam said. “Some people have a set budget when they start their vacation and tips are not included.”
Holtam states the painfully obvious: “If the price of gas has doubled and wages are lagging, how are tipped employees supposed to keep up? Tips are literally the only way some employees can take care of their families.”
Tipping has been a problem
Inflation is driving the need to tip better, and it’s also exposing how poorly we’ve been tipping for years.
“Take the valet example, a family takes a road trip in 1990 and they tip the valet parker $1 for the car when it arrives,” Holtam said. “Then 30 years later, adults who were in Las Vegas as kids bring their kids to Las Vegas. They’re paying, and when the car arrives, they give the valet parker $1. The room is 500% more, the meals are 300% more, but the tips are the same.”
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How much more to tip?
Many of us can do a better job of tipping, but we really need to do our best to tip now given the fury of inflation.
“No one likes to spend more than absolutely necessary during inflation, but paradoxically, this is the biggest argument for tipping more, not less,” said Adam Garcia, founder of The Stock Dork. “The thing is, prices are going up for everyone, and service workers are likely to feel it more than most other categories of labor. So if you can afford to eat out regularly despite rising inflation, you need to account for this difference and also be able to afford to tip more.”
So the question is not so much whether we should tip more (we should), but how much more we should tip in a tough economy that is being hit hard by inflation. The absolute best rule to follow is the rule of percentages.
“For example, if you tip a restaurant server 15% of your bill, you’ll be tipping more when the total increases,” Adams said. In this way, when the price of goods increases, the price of tips automatically increases with it.
Tipping is good for everyone, ultimately
Keep in mind that while generous tips can be seen as an annoying expense, they ultimately make the service industry a better place for everyone.
“Tipping is a mechanism to facilitate strong incentives to provide high-quality service to service providers whose level of service is readily observable by the consumer (and perhaps less so by the employer),” said Chester Spatt, a finance professor at the Tepper School of Carnegie Mellon University. of business. “It can provide strong economic incentives.”
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About the Author
Nicole Spector is a writer, editor, and author based in Los Angeles via Brooklyn. Her work has appeared in Vogue, The Atlantic, Vice, and The New Yorker. She is a frequent contributor to NBC News and Publishers Weekly. His 2013 debut novel “Fifty Shades of Dorian Gray” received praise from Fred Armisen and Ken Kalfus, and was published in the US, UK, France and Russia, though no one knows what happened to the Russian edition! She has an affinity for Twitter.
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