BUSINESS
05/07/2008 05:12 am ET | Updated May 25, 2011

Tip-Dependent Workers Feeling The Slump

Jocelyne Aposaga is a hairstylist who relies on tips for about 20% of her income. As the economy slumps, she has a new survival plan: cut tips.

When Aposaga eats out, she leaves servers a buck or two less than last year. It's not the service that's bad, it's the economy -- and a case of what goes around comes around.

"I am just not getting paid as much as I used to. It's not because I am spending more money on gas or other things," said Aposaga, who works at Aderon Salon in Pasadena.

Amid a tottering economy, rising inflation, increasing unemployment and a housing market meltdown, waiters, beauticians and pet groomers report that customers are growing tightfisted.

It is hard to determine just how much people are cutting back on tipping. But the stakes are huge.

The restaurant industry in the U.S. employs 13.1 million people, making it the nation's third-largest employer, behind the federal government and the healthcare industry, according to the National Restaurant Assn., a trade organization.

About 1.1 million Californians work at food service and drinking establishments, many in jobs where tips make up a significant portion of their pay.

Thousands more work for car washes, nail salons, taxi companies and in other jobs in which tips play a role in their wages.

The slowdown in tips is another blow for increasingly squeezed service workers who often don't have much of a cushion to fall back on when times get tough. Some restaurants have closed down in recent months or have begun scaling back and laying off employees.

Other industries face similar pressures.

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