The American Influence on Tipping Norms

Tipping traditions in the U.S. originated as a way for customers to showcase their wealth. After the abolition of slavery, many individuals were left without stable employment and turned to tips for survival. As highlighted in an article from Time, this created an environment where businesses perpetuated a system of underpayment, essentially continuing exploitative practices under the guise of gratuities.

In contrast, tipping is not as deeply ingrained in European culture, where it is acceptable to forgo a tip altogether, with a customary 3% to 5% left as a courtesy. Most establishments there do not even facilitate tips on credit card transactions, indicating a different approach to service compensation.

Despite improvements in wages for younger servers in Ontario, the expectation for customers to supplement their pay remains problematic. In the U.S., where the federal minimum wage is a mere $7.25, many workers are still heavily reliant on tips. States like Arkansas illustrate this issue further, with tipped staff expected to earn a significant portion of their income from gratuities.

Business owners frequently cite tight profit margins as a reason for not raising wages, but this raises questions about their financial priorities. While independent businesses may face challenges, the profit margins for cafes and restaurants, even at the higher end, suggest that there is room for improvement in how they compensate their employees.

Who Should Be Responsible for Fair Wages?

Much of the current debate centers on whether customers should be expected to provide additional payments to those serving them, particularly in settings like coffee shops. The common perception is that a 20% tip is the norm for simple transactions like ordering a latte. However, the reality is that major chains, such as Starbucks, are generating substantial profits that should be redistributed to their workforce.

In 2023, Starbucks reported over $25 billion in gross profits, a staggering increase from the previous year. This raises the question: why should patrons be expected to tip for a service that is primarily transactional? If customers are merely ordering and picking up their drinks, the rationale for tipping diminishes.

The situation is similar at bars and music venues, where patrons often struggle to communicate their orders amid noise. If the bulk of the work falls on the customer, it becomes difficult to justify tipping for a service that feels minimal.

The Consequences of Ending Tipping

The current tipping culture reflects a broader issue of capitalist exploitation, where companies underpay their staff while shifting the responsibility onto the customer. The fear of social repercussions—such as judgment from servers or fellow diners—only exacerbates this cycle.

A recent TikTok video highlighted the phenomenon of "tip-shaming," where individuals are criticized for not providing generous gratuities during the holiday season. The responses varied, with some arguing that if one can afford the meal, they should also be able to tip well, while others pointed out that the underlying issue lies in inadequate wages.

Customers should not be expected to supplement business profits through gratuities. If tipping were to decline, businesses would be compelled to reevaluate their wage structures. However, there is concern that this could lead to an influx of precarious gig workers who may not be aware of minimum wage laws, further perpetuating exploitation.

If tipping continues to be the norm, then companies will have little incentive to change their practices. The expectation of a 20% tip for minimal service will only serve to normalize this dynamic.