A growing number of people are fed up with tipping, and Americans are tipping less and less several years out of the pandemic. Many believe tipping is becoming increasingly unnecessary and unavoidable.
This mindset is fostering a downward trend, and average sit-down restaurant tips have dropped from 19.4 to 19.3 percent in the first quarter of 2024. Quick-service tips have decreased in this timespan as well, decreasing from 16 percent to 15.9 percent. This decrease can be attributed to a variety of reasons, one being inflation fatigue. Many Americans are noticing how inflation is leading to higher prices, and are decreasing their budgets for expenses they perceive to be optional, such as tipping. Another reason for this decrease is pushback by the American populace. Many have noticed the expansion of tipping prompts into more and more locations, which could prompt them to choose smaller amounts or to not tip at all.
This recent pushback may have been initiated by the global pandemic. Tipping shot up when restaurant closures led to more tips being requested on to-go orders. Many also increased their tips as a way to thank the frontline workers who delivered their food. This has led to ubiquitous tipping requests on iPads for any given service, and benevolence has faded in the past few years as prices have skyrocketed. 72 percent of Americans said they were being asked to tip service workers more than ever before, which in turn has led to confusion over when and how much to tip. The gradual decrease that is present now is due to people settling on a new normal in terms of tipping.
Regardless of the reason, the decreased tips have been detrimental to the wages of many working people. For many service workers, tipping is vital, and they are simply not paid enough to support themselves without them. The federal minimum wage is set at just $7.25 an hour, but many restaurant servers are paid less than that due to the expectation that their tips will supply them with more. However, the federal minimum wage is just $2.13 per hour for tipped workers, and in states with higher minimum wages for tipped workers, average tip percentages will be lower as well. Lower tips may negatively impact the level of service provided, which will again impact the tip and force a negative feedback loop. Clearly, compensation models must be improved for American businesses across the board. Many locations place the gratuity (usually a mere 15%) directly on the bill, but this simply disincentivizes an additional tip from customers. One promising idea is currently being improvised by Washington D.C.: to gradually increase the minimum wage for tipped workers while decreasing the tip credit, until it’s eliminated by July 1, 2027. This would allow workers to earn a living wage while making sure consumers wouldn’t be pressured to cough up incessant gratuities, a win-win that would benefit virtually all Americans if implemented nationally!
