THE BLOG
09/01/2014 10:56 am ET Updated Nov 01, 2014

Why We Should Tip Service Workers Generously

jupiterimages

There are few topics on which Americans disagree as much as tipping. While some tip generously as a matter of habit, others find the practice offensive and unfair.

The latter is because of common misconceptions about tipping.

Contrary to popular opinion, tipping service workers such as at a restaurant or a coffee shop is not a bonus but an essential part of their salary. While some employers pay workers a decent base salary, in which case tips are indeed financial gravy, many other establishments reduce the base salary for workers and rely on tips to make up the difference between the salary and minimum wage.

This means that when consumers tip, they are primarily helping workers achieve minimum wage. While this may seem unfair to consumers, it is hardly different than if a restaurant simply raised the prices on its menu to pay workers directly. Wages are a part of a business's cost structure and therefore a part of pricing for goods and services. Consumers have to pay for those costs one way or another in order for businesses to make a profit, and that can hardly be called unfair.

Of course, most consumers are unaware of this reality and don't tip for this reason but for good service. That means the real problem here is in the disconnect between employers and the public about what tips are really for.

In other words, if we are tipping for good service, then those tips should be indeed be a bonus and not part of a worker's salary, and if we are really just defraying a business's labor costs, then a mandatory service charge on a bill would be a better system. At least this way if a consumer decides to leave a true 'tip' for exceptional service, that gratuity would directly benefit the worker.

Then there is the notion that tips create an unreasonable expectation on the part of workers. That too is fallacious. There is nothing more fundamental to our system of free enterprise than for people to be paid for performance. People work to make a living, and that living depends directly on their ability to deliver a work-product to their employer or customer. If that work-product is exceptional, then being rewarded for it is only fair. If anything, tipping can promote a better attitude and more productivity.

Finally, tipping enables consumers to participate more directly in the marketplace, which is in keeping with the best traditions of American capitalism. In an era where the notion of the customer always being right has gone the way of the dinosaur, tipping is one mechanism whereby consumers can still express their satisfaction (or dissatisfaction) with the service they receive in a meaningful way.

For all these reasons, we should tip generously for good service. It is part of the economic contract between businesses, workers, and customers, and what makes the system work.

And let's remember that this applies not just to food sector workers but to other professions such as a handyman, a doorman, or a house cleaner as well. Just because you don't see a tip jar doesn't mean that tips aren't appropriate or welcome.

Sanjay Sanghoee is a commentator. Please follow him on Twitter @sanghoee