Strictly Business: Does a tip in power loom in restaurants?

By Gordon Oliver, Columbian Business Editor

Published:

 

Gordon Oliver, Columbian's business editor

Quite a few years ago, after a long night and day running the Hood to Coast Relay, I piled into a van for the drive back home from the Oregon Coast. Famished, we rolled into a restaurant on Highway 26. 

The place was full of weary runners. But even taking the trying circumstances into account, our server was not only slow but indifferent and rude. Our group wound up debating whether tipping is part of an unwritten social contract or whether we should scrap the tip to send an economic signal of our displeasure. At least one of our group left nothing; I pitched in a bare minimum.

That story comes to mind as I consider recent chatter about whether the time has arrived to end the tradition of tipping food servers. Some restaurants are experimenting with eliminating tips and increasing the cost of meals to raise wages: Joe’s Crab Shack has eliminated tipping at 18 of its restaurants (but not in Vancouver) and is raising menu prices by 12 to 15 percent.

In Seattle, the city’s impending increase in the minimum wage to $15 an hour may force the issue. Paying tipped servers the same wage as other kitchen staff, from chefs to dishwashers, will create a large discrepancy in incomes. A service fee that’s divided among kitchen and service staff would even out pay.

The new approaches make some sense to servers and customers. As diners, we’d know how much the meal will cost and don’t have to think about whether this server deserves more or less than the usual tip. Among restaurant workers, servers would have the most to lose but their loss would be partly offset by the shared pot from a service charge. And some would welcome the more consistent paycheck.

But it’s not so simple. Restaurant tips are ingrained in our culture, a carryover from a 17th century practice in English taverns that was transported to America in the late 19th century. Small local efforts to eliminate tips have generally failed. Restaurants don’t like to raise prices or impose service charges, and some people insist on tipping.

And the system of tipping is also ingrained in the laws of most states. While Washington and Oregon are among the minority of states that don’t have a lower minimum wage for tipped employees, many states, especially in the South, use the decades-old federal minimum wage for tipped employees of just $2.13 per hour. Only the heartless would wrap up a good meal without leaving a tip in those states.

Those are financial and political issues. But what impact would an end of tipping have on service?

Certainly, servers have a financial incentive to provide good service that could elicit a larger tip. Mark Matthias, owner of Beaches Restaurant, says he sees a correlation between customer satisfaction and service quality in his restaurant’s receipts. On average, he says, Beaches customers leave tips of about 17½ percent. The best servers’ tips top out above 20 percent.

On that day after our long Hood to Coast run, did our meager tip cause our server to do a better job with other diners that day, or any other? Maybe not. But we had our say by leaving a sparse tip, using our dollars as our voice. And that gave me a voice, however modest, I’d hate to lose.