April 23, 2024 • 46 mins
Tipping, it’s complicated. With so many more tip jars and digital tipping options available, it can often be confusing to figure out what goods or services you should always be tipping on and how much. Well, turns out tipping culture is pretty complex and spoiler alert, there isn’t always one set of straightforward rules to follow.
With the help of special guest Stacey Vanek Smith (Bloomberg Audio, NPR’s “Planet Money” and “The Indicator,” APM’s “Marketplace,” and author of the book “Machiavelli for Women: Defend Your Worth, Grow Your Ambition, and Win the Workplace”), Matt and Molly explore the nuances of tipping and some of the signs to look for and consider when that screen turns in their direction. Plus, learn about what a subminimum wage is, the origins of tipping, and how to embrace the custom tip option.
Cited Sources:
- “Tipping Culture in America: Public Sees a Changed Landscape” - Pew Research Center
- “Do You Tip More or Less Often Than the Average American?” - Pew Research Center
- “Minimum Wages for Tipped Employees” - U.S. Department of Labor
- “Did COVID-19 Pandemic Dampen Americans’ Tipping for Food Services? Insights from Two Studies” - Compensation & Benefits Review
- “Technology May Turn You Into A Bigger Tipper” - NPR’s “Morning Edition”
Do you have grown-up stuff that you want to figure out and learn more about? Send us an email or voice memo with your ideas and questions to grownupstuffpod@gmail.com You may hear your question on an upcoming episode!
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:05):
Hey, there, can I give an ice lavender macha latte
with almond milk and light ice. Oh, and I'll take
that carrot muffin too.
Speaker 2 (00:14):
For sure. That'll be eleven seventy eight. And you can
just tap your card to your phone right there, and
then once it's gone through, it'll ask if you want
to leave a tip.
Speaker 1 (00:21):
Oh right, okay. This is a very common scene these days.
You find yourself patronizing a place like a coffee shop,
where you walked up to a counter, ordered and waited
at the counter for something you purchased to be ready
for your consumption. But in the not so distant past,
this wasn't a transaction on which we normally tipped. And
(00:43):
now it's not just coffee shops asking for your choice
of ten, fifteen, or twenty percent. It's the salad bar
across from the office, the dry cleaners down the block,
and even the local grocery store now has a tip
jar at the checkout. According to data from Pew Research Center,
seventy two percent of adults say tipping is expected in
more places today than compared to five years ago. But
(01:06):
the same survey also reveals that people are hella confused
about which services and products they should be tipping on.
Only thirty four percent of Americans feel very confident in
knowing which goods or services to tip for and how much.
Tipflation is a term many economists have started using to
describe the rising pressure for tips in newer spaces. But
(01:28):
how important is tipping to our economy? Should the consumer
be responsible for ensuring a living wage to service workers?
Or is there more to the picture than we're seeing?
And can someone please explain to me how much I
should be tipping for my mancho latte with almond milk.
Start taking notes because this.
Speaker 2 (01:45):
Is grown stuff.
Speaker 1 (01:52):
Hey, Hey, my tip weary friends, Welcome to another exciting
episode of grown Up Stuff how To Adults, the podcast
dedicated to help you learn grow up lessons like how
to calculate the tip on your dinner bill and figuring
out how much to tip your barista on a single
cup of coffee. I'm Mollie and as always I am
joined by a man who needs no introduction and always
tips twenty percent. Matt Heillo. Now. A few days ago,
(02:15):
Matt I sent you a link to a Pew Research
Center quiz. It's titled do you tip more or less often?
Than the average American. Tell me what some of your
results are. I'm going to share some of mine.
Speaker 2 (02:28):
My response is were I don't think we're all that
interesting because I typically tip, But seeing where most people
are tipping, so like eating at a restaurant where there
are servers, obviously getting a haircut, I was happy to
see because who doesn't enjoy catching up with their barber.
This is what was interesting though to me, it seems
like a lot of people are not tipping at the
coffee house.
Speaker 1 (02:49):
That's the area that confuses me the most. In this situation.
The question is are you always tipping off and tipping,
sometimes tipping, rarely tipping, or never tipping? And buying a
coffee or other beverage at a coffee shop. Twelve percent
said they always tip, another twelve percent said they often tip,
twenty seven the majority said they sometimes tip, twenty three
percent said they rarely tip, and twenty five percent said
(03:12):
never tip. I fell squarely in that twenty seven percent
because it's a quick interaction. I'm not sitting down and
being served consistently over a period of time, and I
just don't know now. I usually because again I have
built relationships with the coffee shops that I go to,
especially in my neighborhood, so I tip those places. But
if it's like a place that I don't have a
(03:34):
strong connection to, I don't know that I'll always tip.
Speaker 2 (03:37):
I worked at a coffee bar, and so there definitely
are different types of coffee. Like if I go to
a shop and they're just like opening a tap and
pouring coffee into it and giving it to you in a cup, like,
that's a different situation. But if you're going to what
they call like a third wave coffee bar, where they're
doing all the drinks, all the espressos, the mochas, they're
whipping up the phone, they're pouring your latte art, I mean,
that is a really big skill, and you're you're paying
(03:58):
for a little bit more of a bespoke coffe the
experience in bespoke surface, and so in that situation, I
would definitely tip.
Speaker 1 (04:04):
Well, Matt, I'm curious, what are some of the questions
you have about tipping still, Like, what are the biggest
points of confusion for you?
Speaker 2 (04:13):
You and I were talking about this where it's just
like if there is this big divide between like if
you're eating a restaurant with their service people are tipping,
and there's a restaurant withe there's no servers, people aren't tipping.
Then what we were talking about is kind of like,
then what are we tipping for? Are we tipping for
just the fact of someone having bringing walking food out
of a kitchen and putting it on your table? Like
is it like are you tipping for like the kindness
(04:35):
or the friendliness of the interaction, or how quickly people are,
you know, coming out to you, or.
Speaker 1 (04:41):
On the quality of the product.
Speaker 2 (04:42):
It's the quality of the product itself, you know, is
it situational? So are there any hard and fast rules?
Was like my biggest question? What about you? I agree?
Speaker 1 (04:52):
And on top of that, I want to add like
tipping practices during the holiday season, like for people who
you interact with every day, like I've you know, often
read about or heard about like tipping your landlord or
or yeah, what exactly are the rules? And like how
much should you be tipping during the holidays? But I
think you and I will get answers to all of
(05:12):
our tipping questions because if you haven't guessed it yet,
we're talking about tipping today.
Speaker 2 (05:19):
This is accurate and we're going to learn about it
all from our guest Stacy Vanocksmith.
Speaker 1 (05:25):
Stacey is the author of the book Machiavelli for Women
and also a long time public radio reporter and audio journalist.
You may know her from her work with NPR's Planet
Money and from her time as the Global Economics correspondent
for NPR.
Speaker 2 (05:39):
And while she was at NPR, Stacy guest hosted an
episode of the show Life Kit about tipping culture and practices. Today,
she is a senior story editor for Bloomberg Audio.
Speaker 1 (05:50):
Stacy Vanicksmith, Welcome to the show. We are so excited
to have you here. We are going to talk about tipping,
and I want to start off with a very very
basic question. How did tipping begin? Where did this all
come from?
Speaker 3 (06:03):
Well, thank you for having me. I'm really excited to
be here. I feel like this is a hard question
to start with because it gets very dark very quickly there.
It started after the Civil War when slavery ended. Okay,
so people who had been enslaved were suddenly on the
job market getting jobs, and I think a lot of
(06:24):
service jobs were suddenly opened up to people who'd been enslaved,
and the pay for these was abysmal. And so this
practice started of people tipping because tipping seemed like sort
of a middle ground between someone making a living wage
and someone being enslaved essentially. So it's the history of
it is horrific. And you know, if you go to
(06:45):
other countries, if you travel abroad, a lot of times
a tip is like a couple bucks or you know,
just sort of a like thank you. It's not like
a substantial part of someone's pay. It's only really here
that we do that tipping. It's just a mess. And
I've looked at tipping for a while. I find it
really interesting. It is a huge part of our culture.
(07:08):
I think there are good things about it, for sure,
But I don't think I've ever talked to anyone who
is like this system is awesome, Like no one likes it. Yeah, no,
but it's our system. This is the system we have.
Speaker 2 (07:20):
It's actually interesting to learn that because like, there's something
to me that is always and I used to work
in restaurants and stuff, there's something to me is always
felt inherently wrong about tipping. That like, if people are
like depending on this as part of their cell, then
you're not paying your staff what they deserve to be paid.
You know, my wife and I one of our favorite
restaurants is this Japanese restaurant called Ichran, and they've carried
(07:42):
over their culture of it being a no tipping establishment,
and that's part of why we love it so much.
It just feels like if they're not asking for a tip,
then they're paying their workers a fair wage and the
service is still awesome. But that said, tipping doesn't exist
in many cultures. But are we seeing a shift where
other places are starting to adopt our system?
Speaker 3 (08:02):
I feel like all of us have deep emotions around tipping,
especially lately because money is tight, prices have gone up
so much. The culture around tipping has changed pretty suddenly
and pretty extremely. But the idea of not tipping, it's
so hard, and you know, people will say like, oh,
you don't have to tip here, and it's like, I don't.
But I actually think the culture around tipping was starting
(08:24):
to change here before the pandemic in the US, because
there was like Danny Meyer and David Chang had like
published op eds in the New York Times saying like
we're not having tipping, and they explained it saying, listen,
this creates a lot of inequity in the kitchen. I
think Danny Meyer was like, my chefs are making less
than the bartender because of tips, and they don't get
(08:45):
distributed equitably. And I just make sure I pay everybody
a living wage. And so, you know, you'd go to
one of these restaurants kind of like you were saying, Matt,
and there was this feeling of like, Oh, everybody's actually
being taken care of, they are making a living wage.
This isn't on me. Yeah, And I mean, I think
the reason that we find this topic so endlessly fascinating
(09:06):
and interesting is because we know there's something wrong with
the system, and we feel it all the time. I
think that strange feeling you were talking about, Matt, is
like that you're like, something's wrong here. I'm being asked
to tip as if it's just like a thank you,
but it feels like it's not really a thank you.
You're supplementing someone who's been underpaid. So it's messed up.
Speaker 2 (09:30):
Yeah, yeah, it is.
Speaker 3 (09:32):
This gets very politicized very fast. People have extremely strong
opinions about tipping. I think one of the reasons that
it's hung around is a lot of like kind of
powerful interest groups around restaurants, Like basically it's a way
for restaurants to post lower prices and to still get
a higher amount of money to employees, like a competitive
(09:52):
pay to employees. And I think when restaurants try to
not do that, which Danny Meyer and David Chang did
before the pandem but they both went back to tipping
during the pandemic. There really people were having so much
trouble finding people to work. And if you're going to
pick a restaurant to work at and it's really competitive
and you have like five job offers, are you going
to go to the place that's like, we're not going
(10:13):
to tip you, We're going to pay you a solid
living wage versus Especially during the pandemic, people were I
think had an increased awareness of essential workers and the
importance of that work and the difficulty of it, and
so the tips were pretty good. It's like, I'm not
gonna not get tips. So I think they went back
to a tipping situation just to be competitive enough to
(10:34):
get the workers they wanted they had to.
Speaker 1 (10:36):
Interesting, Yeah, tipping can be super fraught and complicated. While
some service workers saw an increase in tips from twenty
twenty to twenty twenty one, especially food delivery workers and
workers with a more distant role at quick service and
full service restaurants. According to a study published in the
(10:58):
Compensation and Benefits or View, others saw a decrease in tips,
especially those working in full service restaurants with more face
to face interactions with customers. But the global pandemic hasn't
been the only catalyst of change in our tipping practices. Today,
technology may be the largest driver for tipping. In March
(11:18):
of twenty fourteen, NPR reported that in some businesses, employees
saw a fifty percent increase in tips with the introduction
of new swivel screened payment processing systems like Toast, Clover
or Square. These new tools also beg the question how
much of that tip actually gets to the person on
the other side of the counter.
Speaker 3 (11:41):
Now we have like the rise of these tip screens
and the dreaded screen turn and Square owns a lot
of them, and Square takes a cut of the whole transaction. Really, yes,
tip included, So if you tip more, their cut is bigger,
and then the restaurant will choose to you either honor
(12:01):
the whole tip or whatever.
Speaker 1 (12:03):
Wow, Okay, that is very interesting.
Speaker 3 (12:06):
Yeah, so they have an incentive to have higher tipping numbers.
And then I think for employers, like they want to
keep their workers happy, they need to keep their workers,
and it's just easier for them to not deal with
raising prices and pay their workers maybe less than a
living wage and just be like, well, you can make
(12:28):
it up with the tip. And then there you are
in this awkward situation, just trying to get a coffee,
and all of a sudden, you're like, nine dollars feels
like a lot, but you're looking at this person who's
looking at you, and you're like, I guess twenty five
percent is good, yeah, and you know, and then it
raises all these questions and people get very emotional. During
the pandemic, I think a lot of people wanted to
(12:51):
tip more. They wanted to tip workers more. Is just
like a gesture.
Speaker 2 (12:54):
We were all they were essential workers, right, yeah.
Speaker 3 (12:56):
We were trying to help each other out. Now things
are a little different, but tipping has just increased. And
also we started tipping people we didn't use to tip before.
During the pandemic, right like, there was a tip jar
and my supermarket, and the tip jar stayed and now
we're all kind of we don't want to be that
person who's like, I'm not leaving a tip.
Speaker 1 (13:14):
Yeah, you bring up a really good point of like
what is the reason for tipping, Like are we tipping
on skill? Are we tipping on general treatment and personality?
Speaker 3 (13:23):
Ostensibly we're tipping because we are acknowledging exceptional service or
good service as like a thanks, you did extra work,
here's extra money. But functionally that is not how the
tips are being used in a lot of cases, and
this is where it gets even more complicated state by
state and everything. But in a lot of cases like
(13:46):
that money is getting people up to minimum wage. So
in that case, it's not really acknowledging exceptional service as
much as it is like, here is my contribution towards
you making a living wage, and that I think we
recognize both things are going on, and you sort of
feel resentful. It feels like a bait and switch. It's
(14:07):
like this price was presented to me. It's like, Okay,
this coffee is supposed to cost five dollars, but really
the coffee doesn't cost five dollars. Really the coffee costs
eight dollars, and then I can choose to pay five
dollars for it, and I will be taking money away
from this person who is looking at me, who made
my coffee, and like, just tell me it's eight dollars.
(14:27):
I don't know. It puts us off. I think this
is why people get so emotional about tipping.
Speaker 1 (14:36):
Not only do people get emotional about tipping, but there
also doesn't seem to be one school of thought on
how to approach tipping. According to data from the Pew
Research Center, twenty one percent of Americans say that tipping
is more of a choice, while twenty nine percent say
it's an obligation and forty nine percent say it.
Speaker 2 (14:55):
Depends on the situation.
Speaker 1 (14:57):
Many of us know that tipping is a way to
help work in the service industry make a living wage,
but many consumers feel like the burdens shouldn't fall on them,
and more than seventy two percent of Americans are opposed
to businesses including automatic service charges or gratuity onto their bill.
Speaker 3 (15:16):
People always looking for who to blame, so some people
are like, oh, workers are so entitled, they don't want
to do anything. They expect these huge tips. That's not true.
In a lot of cases, workers are not making anywhere
close to enough to live right or people is like,
it's the business owners. They're underpaying, they're workers, they're exploiting people,
and customers are expected to make up the difference. Well,
(15:36):
that's true, but they are trying to get people to
buy their stuff, and if they price in higher wages,
people aren't going to buy their stuff. So then it's like, well,
it's the customer's faul because they don't want to pay workers.
But we've all seen prices rise faster than our wages,
and our buying power has diminished. Our credit card debt
(15:59):
has gone through the room poof our savings has liked.
Speaker 2 (16:01):
What savings resolved? Savings? What's that?
Speaker 3 (16:04):
I don't it's so true. So we are all struggling
and basically passing this football of higher prices around and
it converges on tips and like this weird cultural awkwardness
that is the American tipping situation.
Speaker 2 (16:23):
And I want to drill down a little bit onto
something that you'd brought up earlier, which is like this
concept of a living wage, the concept of a minimum
wage and getting people up to if not minimum, then
a living wage. This is something that I knew about
for a long time, but I had no idea was
actually legal. So, like minimum wage across the country is
seven to twenty five, but I know some people who
(16:44):
make two dollars an hour because they were getting tipped
on top of it. And you know, my first question
for a long time was like how is that even legal?
But it turns out is it is legal because of
a thing called a sub minimum wage. Can you talk
to us about what a sub minimum wage is?
Speaker 3 (17:00):
So Sylvia Aligretto is an economist. She also worked as
a tipped worker as a waitress and a bartender for years,
so she's very familiar with This is actually what inspired
her work on minimum wage. So, the federal minimum wage
is seven dollars and twenty five cents an hour. States
will often have higher minimum wages, like Washington State their
(17:20):
minimum wage is sixteen dollars an hour. There's also a
federal subminimum wage, which has not changed since like nineteen
ninety three or something. What I know, it's two dollars
and thirteen cents an hour. Oh my god, you can't
pay any work or this. They have to be in
a certain industries, but the rules around it are very vague.
So like a lot of people like if you work
(17:40):
at a car wash or your massage therapist, or work
as a bartender or a server, you are eligible to
get a subminimum wage. Now, a lot of states do
not allow that, like Washington State with its sixteen dollars
minimum wage does not allow for subminimum wages, but a
lot of states do. And so depending on where you live,
the pay and tipping situation is just really different. For
(18:05):
the workers who are serving you your lunch or coffee
two dollars and thirteen cents. It's mind blowing. It's like
what someone would make in the thirties.
Speaker 2 (18:16):
And going back to this, it just feels illegal to me, Like,
I just cannot believe that something like that is legal.
Speaker 3 (18:21):
Well, here's what is supposed to happen. So, technically speaking,
you can pay someone a sub minimum wage, but if
their tips do not get them up to minimum wage,
the employer's supposed to make up the difference.
Speaker 1 (18:34):
Oh interesting, here's the catch.
Speaker 3 (18:37):
So what Sylvia ali Gretto told me, and what she
found in her research was that a lot of times
like this just doesn't happen in practice. Because she used
this example and it sort of rang very true for me.
She's like, you know, let's say it's someone working a
diner shift in the middle of the night. This woman
is desperately trying to get off of overnights, but she's
trying to get in good with her boss. Her tips
(18:59):
fall short. She's supposed to then go to her boss
and say like, hey, I did not make enough money.
You need to supplement my income. But if she's trying
to get in good with the boss, or feels like
that's going to be badly received, or is worried about
losing her job, she may not do that. And Sylvia
Alagreta was like, I had a bunch of service jobs.
(19:19):
No employer ever once asked me to report my income
to be like did you actually get up to minimum wage?
And probably doesn't happen a lot.
Speaker 1 (19:29):
Well, and there's probably no way for the government, local
or federal to penalize the employer if that was the case.
You know that they needed to because the tips aren't
always reported accurately, either right.
Speaker 3 (19:43):
They're in cash or like, you know, the employer can
be like listen, we didn't know. Like it gets really fuzzy,
and I mean, I think Clinton tried really hard to
raise the sub minimum wage, but apparently the Restaurant Association
was like really fought for this and was like, you know,
jobs will be lost if this happens. This is always
(20:03):
the argument around minimum wage, and I don't think it's
a completely false either. Like I don't want to villainize
small business owners because I also think that they're dealing
with a lot, but you end up with people making
two dollars and thirteen cents an hour, and like customers don't.
Speaker 2 (20:18):
Know no, Yeah, And this is the thing that always
makes me like realize that, like, man, I have to tip,
Like I don't really even care if like the service
isn't that bad. It's just like people are making two
dollars a goddamn hour, yes, Like, and I don't think
anyone knows this really, Like I worked in the industry
and I didn't even really understand the concept of the
subminimum wage. So it's really important for people to know this.
Speaker 1 (20:41):
Well.
Speaker 3 (20:41):
It's so hard to know because first of all, like
every state, some states have different sub minimum wages, so
if you happen to travel to a different state, you've
got to look it up. Economic Policy Institute has a
good wage tracker that is free, but it's so confusing,
and you don't know what a particular business is doing either,
Like even if if you know the laws of the state,
you don't know what a business is doing. And like
(21:02):
some employees are sometimes counted a sub minimum wage. That
would surprise you. It's so confusing. If you're a customer,
it's really hard, Like you just do your best. You know,
it's complicated. Tipping, It's complicated.
Speaker 1 (21:16):
Tipping It's complicated. That is the title of this episode,
Tipping It's complicated.
Speaker 3 (21:20):
We are correct to be uncomfortable and upset about tipping.
That is what I would tell everyone. I talked to
a barista for a tipping story I did for NPR,
and he worked in Philly. He's so wonderful. He was
in his thirties and he was like, you know, I
love this job. I love making espresso, Like this is
my career. This is my job. And he's like, people
(21:41):
look at my job like, oh, it's okay if you're underpaid,
because this is a job for like young people or
people who are transitioning, or it's a side hustle. This
is not someone's whole job. But he's like, it is
my whole job. And he said, now this is crushing.
I have never in this since I talked with him.
He had to do the screen turn and he's like,
(22:02):
it's really awkward. People say all kinds of weird things
like and he's like, I'm a human being, Like it's
really hard when someone's like, well I'm not tipping, or
why is the tip so high? Or whatever? And I said, well,
can you tell if somebody doesn't tip? Can you tell
what buttons people push? Essentially? Yeah, because there's always that
weird thing where the person like turns the screen and
kind of looks away. And I said, well, do you
(22:23):
feel bad if someone doesn't tip or just just kind
of roll off your back. He's like, no, I feel
bad because he's like it's like this person is saying
like I don't care if you make a living wage
or not.
Speaker 1 (22:33):
That's so hard.
Speaker 2 (22:35):
Yeah, And I think that's my other problem with the
whole situation too, because it's like they deserve to have
a living wage. Like if you're working a job and
you're working a job eight hours a day, like what
gives here with you know, people feeling like they deserve
less than a living wage. It just blows my mind.
Speaker 3 (22:51):
Yeah, yes, no, that's really that's so true. But I
do also have a lot of sympathy for customers because like,
we are getting asked to tip a lot.
Speaker 2 (23:01):
Oh absolutely, it's tip plac.
Speaker 3 (23:03):
That's the new term, I mean, and it's kind of
it's true, right, And there's some data from bank greet
that people were starting to tip less because it's just
like at a certain point, you can only afford so much.
So like from an economist's perspective, it's like, well that's
not great either. It's like, okay, well I'm just going
to get a coffee once a week instead of five
days a week or whatever.
Speaker 2 (23:21):
It is.
Speaker 3 (23:21):
Well, that's really bad for the coffee and the worker
and everybody too. So I think we're all kind of
in a tough situation together, and it's messy. Why is
it so important that we continue to tip our uber eats,
grub hubs, seamless delivery people, and our Uber and Lyft drivers. Right,
A very tiny percentage of people tip their Uber and
(23:42):
Lyft drivers.
Speaker 2 (23:43):
Right.
Speaker 3 (23:43):
And I was talking with Schubronchu Sing about this. He's
a professor of hotel management and this writing is so true.
He was like, by the time the app asked us
for a tip, our interaction with them is done. It's
not a person standing in front of a screen. And
I think because we do feel so sort of overtaxed
and overtipped and it's like do you want to leave
five dollars? It's like, I don't know. That ride was
more expensive already than I thought it was going to be.
(24:05):
But those workers are often earning like not much. And
this is the same with hotels too. I mean there's
a big socialization cultural issue with this too. Right, we
feel that pressure right with the screen turn or even
at a restaurant when someone leaves a tab. It's like
the personal interaction having to kind of face the person
(24:25):
who is being affected by your tipping decision. I think
affects our tipping decisions a lot. And if you know
you're never going to see the person again, but it
doesn't mean that that person isn't the person who needs
your tip. More so, I think it's worth thinking about.
I do not want to pile guilt on anybody or anything,
but I just think an awareness of how little a
(24:47):
lot of people who clean hotels earn, how little a
lot of uber and lip drivers earn, is important to
just keep in mind and like to just try to
give what you can, or to have a strategy in place,
even if it's not perfect, just to think about it
instead of just like responding to the pressures of the moment,
which I am one hundred percent guilty of.
Speaker 1 (25:06):
I think it's a very adult thing to feel a
little guilt every now and then and to have it
move our actions in a better way.
Speaker 3 (25:13):
I think that's true. Actually, maybe the adulting lesson here
is that, like you learn how to evolve your relationship
with guilt. That's a big adulting topic. I think we're
here for it.
Speaker 1 (25:25):
Though.
Speaker 2 (25:25):
Well, it's interesting because I think this is the first
episode where it's really more like we just need to
understand more about tipping, because again, I think that people
could maybe come into this going like, God, I just
hate tipping. I'm hoping they're gonna come here tell me
I don't need to do it. And it's interesting that like,
the more we know about it, that we realize how
important it is and how people are unfair. You know,
it's a raw deal for everyone. It feels like a
(25:48):
damned if you do, damned if you don't sort of
an episode to me, but also like it is important
to know all this stuff Yeah, it's funny because we're
I guess I'm walking away with knowing more but not
really sure about like what the act item is for
people here.
Speaker 3 (26:02):
I feel like that's the most adult thing of all,
walking away with the more nuanced understanding of the problem
and no solution.
Speaker 2 (26:11):
Yeah.
Speaker 3 (26:11):
I mean, I think what we're really dealing with here
is inflation, and I know I keep talking about that.
But like food delivery, I think is such a great
example because the food delivery situation is so extreme. It's
like you order a burrito that costs nine dollars and
somehow it's forty dollars. Yeah, after all, a sudden done,
(26:33):
and that is so many fees get piled on there,
like fees for everything, and so the Biden administration has
done a big push on this, pushing back against fees,
like hotels are really guilty of this, like resort fees, airlines,
ticket change fees. Some of the fees are huge. But like,
I think food delivery is one that we can all
relate to where you're like, what but at this point
(26:55):
you're like, I want the burrito.
Speaker 2 (26:56):
I guess I'll pay forty dollars for it.
Speaker 3 (26:59):
And then on the top of that would you like
to tip your driver? You know, the one thing I
can recommend is like to exclude the fees when you tip.
The suggested tip will include all those fees, and you
shouldn't be tipping on top of fees and taxes. But
there's a term economists used for all this stuff together,
like higher tips and fees. It's called stealth inflation. And
(27:21):
there's a sort of a school of thought amongst some
economists that inflation is actually higher than we think it
is because of stuff like this. Fees sometimes do get
factored into the inflation index that the government looks at,
but tips don't. So all together, like the prices of
things maybe have risen more than even has been acknowledged.
(27:44):
And I think that's also why it's so upsetting, because
we are starting to realize that, like maybe there's a
big lifestyle adjustment that has to happen. It's like this
dirty secret in our economy, Like businesses don't want to
acknowledge it. We don't want to acknowledge it. So we're
like charging tons of things on our credit cards, paying
what looks like a pretty reasonable price that ends up
being like much higher than we thought. So I don't know.
(28:06):
I think that's a lot of what's happening. And I
think that's a lot of like why we're upset is
we sort of feel like something's being hidden from us,
which I think it is, and the most vulnerable people
in our economy are the ones often bearing the brunt
of this. We're sort of at the mercy of people's
tips and goodwill and budgets.
Speaker 2 (28:28):
Frankly, I think it's interesting that you brought up tipping
on top of tax and I had never thought about
this until I was at a restaurant with my brother
and he's always been better at math and I and
he's like, you're tipping on top of the tax And
I was like what And he was like, so, basically,
what that means is you're including the tax as a
portion of the total tip you're paying, which is basically
like thanking a fee with a tip. And I was like, Oh,
(28:50):
that's interesting. I've never really thought about it that way.
But when you talk about all the services and fee
attacking on top of it, you're also paying a percentage
of those too. So is this something that you you know?
Because Molly and I were debating about this beforehand.
Speaker 1 (29:03):
Like because I am always just like stop nickel and
diming the people. As we've just discussed, who're earning two
thirteen an hour.
Speaker 2 (29:10):
Yeah, so is there a hard and fast yeat guidance there?
Speaker 3 (29:13):
I mean, I don't think there's hard and fast guidance.
I think Molly has an excellent point. What I would
say to counter that a little bit is if you
were in a position where you were really trying to
figure out what you can afford, and you want to
be a good person and a good customer, but your
budget is really limited, you can just take the core amount,
add the tip onto that, and that is a decent tip,
(29:34):
Like you do not have to feel bad about that tip.
So you can sort of like make some rules for
yourself where you're like, Okay, well I'd love to leave more,
and maybe at some point in the future I can,
but for now I will leave this. It's like, okay,
what's the minimum tip that I leave? Like, Yeah, let's
say the service is terrible, let's say the order's wrong,
everything's bad. The tip now becomes just a function of
(29:57):
you sort of acknowledging and honoring this person's like wage situation,
and so like, what's the amount that you want to
leave in that situation. And then if the service is
amazing and you love the person and they've crafted you
the most beautiful whatever latte art you ever seen, or
you just think they're wonderful and you want to acknowledge that.
(30:17):
I think there's tipping more is never going to be
a bad thing. But I would also recommend one thing
you can do, especially too if you're pinch just tipping
in cash is always better.
Speaker 1 (30:28):
Oh, which, like I know.
Speaker 3 (30:29):
A lot of us don't carry that much cash around now,
but if you want to sort of a fail safe
way to like make sure you're getting money into the
right hands, cash is the best.
Speaker 1 (30:39):
Yeah.
Speaker 3 (30:40):
But also tipping in cash feels weird, and then I
feel like if I do hit the like no tip,
then I feel like I want to be like, but
I tipped in cash. Did you you saw that right?
Speaker 1 (30:50):
Right?
Speaker 3 (30:51):
Yes?
Speaker 1 (30:51):
I always feel like I need to like, yes, I
need to like add that footnote of like it's in cash.
Speaker 3 (30:56):
It's like tipping theater, right, You're like waiting until they're
looking so then you can pretend like you're sneaking money
into the tip jar. But you're like, I just want
you to know I'm tipping you, yeah, or.
Speaker 2 (31:08):
Write down like zero and then put like cash in
the the line on the on the receipt.
Speaker 3 (31:13):
Oh that's smart.
Speaker 1 (31:14):
But the fact that we even have to write cash
is because it's part of the tipping theater. We're like,
we don't want you to.
Speaker 2 (31:20):
I'm writing zero because I like you guys did at there.
I'm like this cash there too.
Speaker 3 (31:25):
Yeah. Yes, I don't know what people in other countries
do with the enormous chunk of our brains that we
were spending like doing all these calculations and dealing with
all this like emotional like navigating this like emotional terrain,
Like it's a terrible situation. Tipping is terrible.
Speaker 2 (31:41):
Hopefully they're putting it towards solving the climate crisis.
Speaker 3 (31:44):
That's what I absolutely, Yes, somewhere on Square there is
a button for saving the planet.
Speaker 1 (31:52):
Coming up on grown up stuff How to Adults.
Speaker 3 (31:55):
I had a plumber come and he was like, oh,
can you pay me on Square? And suddenly I was like,
am I supposed to tip my plumber? That is where
things get really tricky.
Speaker 1 (32:07):
Will be right back after a quick break and we're
back with more grown up stuff How to Adults?
Speaker 2 (32:19):
So now we want to get down to like what
is like common sense practice around tipping. So what really
are the services and or goods that we really should
be tipping for every single time?
Speaker 3 (32:31):
I would say, first of all, look up where you
are and look up what the tipping rules are in
your area. I think that is a big deal. Then
I would say, like anyone who's potentially earning a sub
minimum wage, that is your absolute top priority, because they're
making potentially two dollars and thirteen cents an hour. Other
than that, I mean seven twenty five, which is the
(32:54):
federal minimum wage. Like, that's also not a ton. If
you are in a business that is encouraging you to tip,
or where the tip is sort of part of the transaction,
often that is a signal that that person is not
really making a minimum wage, that they are potentially counting
on your tip to get up to a living wage.
(33:16):
So it's not just like, oh, there's a tip jar
at the dry cleaner. It's like the tipping is a
big part of the transaction here. I think that's a tell.
After that, I would say, I know it's a lot,
and hotels are a lot, but I would say, like
leaving a tip in a hotel or like uber drivers
often things like that, but you don't have to tip
(33:39):
twenty percent in every case, But just I think leaving
something is important, and if you're really really on a budget,
I think even just leaving what you can is good.
And I would say, like the key thing is knowing
where you are and what the rules are where you are,
and that is a really good baseline. And yeah, I
would say, just like be kind to yourself. This is
(34:00):
a mess, Like it's a mess. That's my major takeaways,
Like this is chaos.
Speaker 2 (34:05):
In some of the research that we did, I came
across this idea of like are we now tipping at
places where we really shouldn't be?
Speaker 3 (34:12):
Oh yeah yeah. I got some very funny comments where
people were like I had a plumber come and he
was like, oh, can you pay me on square? And
suddenly he was like I was like, am I supposed
to tip my plumber? That is where things get really tricky.
And I think the best advice I got was from
Schubronchu Sing and what he said was winn doubt I
(34:33):
tipped ten percent okay, And I was like, okay, Yeah,
it's one of those things where like it's not good, Like,
no one's happy in that situation, but at least, like
the person who you tipped ten percent is not happy.
You were not happy. No one's happy. But I think
it's like it's sort of like a decent feel. I
felt it was like a reasonable and decent way to
deal with a hard situation.
Speaker 2 (34:53):
Maybe this is what we're learning is if we can
get to a place where no one is happy, then
maybe that's exactly where we should be.
Speaker 1 (35:00):
You are a real adult that everybody's happy.
Speaker 2 (35:02):
No, it's happy, everyone's happy.
Speaker 3 (35:05):
Yes, exactly. Actually I talked to a man who worked
in the music industry. He would like negotiate deals with
like musicians and labels, and that's what he said. I
was like, oh, giviny negotiating tips And he said, well,
it's usually the sign of a good new negotiation if
no one's happy, And I was like, okay. He's like,
if someone's like thrilled, usually that means that somebody got screwed.
(35:27):
And if nobody's thrilled, that's usually a sign of like,
then everybody got a little screwed. And maybe that's the
best we can hope for in this world.
Speaker 1 (35:34):
That's true that's something. Pe Research Center said that fifty
seven percent of Americans say they tiped fifteen percent or
less at a sit down restaurant. As we kind of
mentioned earlier, I always do twenty on top of all
the taxes fees. Yeah, is this above and beyond? Like
what is again? Is this a regional thing we talked
(35:56):
a little bit before, like where some people are like,
or is twenty the new fifth? And we should all
be at a sit down restaurant scenario, we should all
be assuming twenty percent, whether that's if you choose to
do it on top of the fees or if you
decided to do it, you know, before all the taxes
and fees.
Speaker 3 (36:11):
I would say the very minimum should be fifteen percent.
I mean, I think just based on the world we
live in now, I think if twenty still is a
good tip, and then above that is like a great
tip and a sit down restaurant, like I really would say,
I mean, if the person throws water in your face,
tip ten percent.
Speaker 2 (36:32):
And this also the thing brings up something that you
had mentioned in your NPR article that like the people
should feel empowered to hit custom tip and to leave
fifteen or twenty if that's what they want to do.
Speaker 3 (36:43):
Yes, this was something that I sort of started doing.
It was like, okay, you make a rule for yourself,
and it was like, I will tip twenty percent, So
I think normalize custom tip.
Speaker 1 (36:53):
I love that.
Speaker 3 (36:54):
Yeah, so I liked that suggestion too because it's sort
of I feel like part of what is upsetting as
a customer is you sort of feel like all this pressure.
It's like one of those things where it's like all
this stuff happens and then you're like outside of the
coffee shop with your coffee and you're like, wait, how
much did I just pay? And you sort of feel like.
Speaker 2 (37:11):
It feels like they're putting this emotional social pressure on
you in the moment, and by putting twenty five is
the minimum they're getting away with something, Whereas like you
should reclaim that moment and that awkwardness probably no going
into the transaction that you might be faced with that
and go like, hey, like I've decided for myself that
I'm going to tip twenty percent, you know, or I've
decided for myself I'm gonna tip fifty percent, so I'm not
(37:32):
going to feel bad in this social moment to hit
custom tip and leave what I'm comfortable with.
Speaker 3 (37:38):
I like that idea, like reclaiming the awkwardness of that moment,
because I do feel like there's this time pressure, there's
this emotional pressure. You're just wantaking coffee, and it's like
it's a lot coming at you all at once, and
you haven't had coffee yet.
Speaker 2 (37:53):
Do you know what I mean?
Speaker 3 (37:53):
Like it's just right coming at you.
Speaker 1 (37:55):
That's the real crime here, and you haven't had your
caffeine yet.
Speaker 3 (38:00):
All this stuff is converging on the screen. Turn It's
like amazing, we're all still upright and talking.
Speaker 1 (38:05):
You know, Yeah, this is so true. I want to
talk about tipping that we experience kind of in a
different context, which is around the holidays. How much should
we be tipping people who we interact with every day
that we don't tip every day.
Speaker 3 (38:20):
It depends, I think, on where you live. Like here
in New York, it's traditional, like if you live in
a building with the doorman, you're supposed to tip the doorman, right,
And from what I've heard, it's like around ten percent
of your rent or something like that of your monthly rent,
yeah yeah, or like tip your super if your super's
the one you interact with. Like I live at Ability.
It doesn't have a doorman, but I have a super.
(38:41):
So that idea is like you tip your super. And
then like you're postal worker is someone you can think
about tipping too at that time because there obviously that's
like a big time of year, they're working really hard.
So those are the two that come to mind. We're
not talking about people who are counting on your tip
to get them to minimum wage. I think that's like
(39:02):
an important thing to remember, like that tip is really
a tip. It's like really an acknowledgment of a relationship
and service to me, that feels like so I would
say that sounds great. I mean I would say, like,
find what feels appropriate to you, sort of figure out
what the custom is, figure out like what the range
within the custom is, and find like the point within
(39:26):
that range where you feel comfortable. And also it's like
depends on what you can afford. And I mean, I
think you just try to do what you can.
Speaker 2 (39:33):
But Molly, you will never be a monster for making
someone baked goods and giving them a personal note during
the holiday.
Speaker 1 (39:40):
But maybe it's just like no, just give them more cash,
get your shit together, give them more cash.
Speaker 2 (39:45):
I think, I think anyone would appreciate that. And I've
had your baked goods and they're delicious. Oh, thank you.
Speaker 3 (39:51):
This is Brooklyn. You're supposed to be able to pay
for things with baked goods. Yes, we still have a
little soul in this country. I like to think it's
not all about money. Thank you, Stacy.
Speaker 1 (40:01):
That makes you feel better.
Speaker 3 (40:02):
It's just an acknowledgement of value. And you could do
that in a number of ways.
Speaker 1 (40:06):
Yeah.
Speaker 2 (40:06):
I like that. You're right.
Speaker 1 (40:08):
You're right now. I don't plan on like just being
like here, Burisa, here's for my coffee today.
Speaker 3 (40:13):
Here's one scone.
Speaker 2 (40:14):
I begged him all every day. You give me a scone,
I would give you.
Speaker 3 (40:21):
I will give you a scone. Yeah.
Speaker 1 (40:24):
Well, Stacy, you are now in a new position. Where
can they find what the next thing that you're working on?
Speaker 3 (40:30):
So I'm at Bloomberg now. I'm working as an editor there,
but I am also filing stories from Marketplace a lot,
so marketplace dot org is probably the best place right now.
It's fine.
Speaker 1 (40:39):
My stuff amazing. I will constantly be reading and listening
to all of it, So, all of your work, So thank.
Speaker 3 (40:46):
You so much, Thank you and I will be thinking
about your scones.
Speaker 2 (40:50):
Thank you, thank you.
Speaker 1 (40:52):
Listen player cards, right, Stacey, I might mail yourself thinking
about and scones.
Speaker 2 (40:57):
Sounds like a good deal.
Speaker 3 (41:00):
Yeah, I do my best. I do my best, all right,
Thanks you.
Speaker 2 (41:06):
Guys, Stacy.
Speaker 1 (41:10):
You've got some tea scones coming your way. To show
my appreciation for this illuminating conversation about tipping. This really
has been a grown up stuff first, because there's not
necessarily a clear path forward on tipping, but I've learned
so much about how and why it started and a
deeper understanding of what it means. Here's what else I'm
taking away from our conversation with Stacy Vanocksmith on tipping.
(41:33):
The practice of tipping in the United States began shortly
after the Civil War. During reconstruction. People who had formerly
been enslaved had limited job options, so many took on
roles in the food and service industry and agreed to
work for tips without a wage. Tipping is a very
complicated ecosystem, and some restauranteurs have tried to get rid
(41:55):
of tipping and increased the base pay for all of
their staff, but then they faced the chair lenge of
employees going elsewhere to try to make even more money
in a role where the pay is far less, but
there is an opportunity to make a lot more with tips.
Those newer digital tools restaurants are now using to process
payments like square or toasts. You know they're the tablet
(42:15):
screens that turn around to face you and ask you
how much you want to tip. Well, those companies are
taking a percentage of every transaction total, including the tip.
So while these have made tipping very easy for consumers,
and in some cases have even increased the average amount
that we tip, cash is still best when it comes
(42:36):
to tipping service workers. The federal minimum wage rate is
seven twenty five. However, if you are a tipped employee,
then your employer is allowed to pay you a subminimum
wage of two dollars and thirteen cents. If the tipped
employee doesn't make enough in tips and that sub minimum
wage to equal the federal minimum wage, then the employer
(42:58):
has to make up the difference. That being said, is
unclear how often employees are reporting this and receiving the subsidization,
Nor do we know if employers are frequently checking in
with their workers to make sure they did make enough
around the holidays, you should probably think about tipping your
super or building staff. But if that's a lot for
you, you can always do a little less and share things
(43:20):
like baked goods and a personalized note to acknowledge the
relationship and show your gratitude for them. If you're really
struggling to figure out whether or not you should be, tipping,
ten percent is a good baseline to start, and as
Stacy says, the sign of a good negotiation is if
everyone leaves a little unhappy. Don't be afraid to custom tip.
(43:42):
There are a lot of fees and taxes added to
bills today, especially food delivery bills. It is completely acceptable
to tip on the subtotal before all of those additional charges.
And finally, sometimes being an adult is just informing yourself
about a topic, developing a more nuanced understanding, and feeling
(44:03):
even more confused and conflicted on the right approach. Matt,
I never thought i'd say this, but I now think
I would potentially consider tipping on the subtotal rather than
the total. I also feel relieved to hear that Stacy
approves of my holiday tipping practices. But Matt, what stuck
with you from this episode?
Speaker 2 (44:24):
I totally agree with you, and actually I will tip
on the subtotal. But what I will do is carry
cash with me because the thing with me is, like
you know, hearing about all this stuff about sub minimum
wages and how hard people are working in inflation and
people are getting squeeze, I want to make sure that
my tip is going directly to the person who is
providing the excellent service. So cash is going to be
(44:46):
flowing back into my pocket very shortly, and I will
make sure that I am tipping at least twenty percent
in all of the scenarios we covered, but giving that
cash directly to the person that's helping me.
Speaker 1 (44:55):
Yeah, I agree, because that sub minimum wage truly.
Speaker 2 (44:58):
Blew my mind, mind blowing.
Speaker 1 (45:00):
Tell the good people out there listening, what is next
on grown up Stuff How to Adult?
Speaker 2 (45:04):
Next episode, we're digging into dog ownership because it turns
out having a dog is a lot more like having
a kid.
Speaker 1 (45:11):
I wanted a dog for so long, Matt, like a
dog did really just call my own? But I know
that right now I don't have a life that is
conducive to.
Speaker 3 (45:21):
Having a dog.
Speaker 2 (45:22):
Don't yet despair, because we'll find out for sure in
two weeks on the next episode of Grown Up Stuff,
How to Adult Ed.
Speaker 1 (45:28):
Remember you might not be graded in life, but it
never hurts to do your homework.
Speaker 2 (45:32):
This is a production from Ruby Studio from iHeartMedia. Our
executive producers are Molly.
Speaker 1 (45:37):
Soshia and Matt still O. This episode was engineered by Matt.
Speaker 2 (45:41):
Still Ow and written by Molly Soosha.
Speaker 1 (45:44):
This episode was edited by Sierra Spreen.
Speaker 2 (45:48):
And special thanks to our teammates at Ruby Studio, including
Ethan Fixel, Rachel Swan Krasnoff, Amber Smith, Deborah Garrett, and
Andy Kelly. Four
Hey, there, can I give an ice lavender macha latte
with almond milk and light ice. Oh, and I'll take
that carrot muffin too.
Speaker 2 (00:14):
For sure. That'll be eleven seventy eight. And you can
just tap your card to your phone right there, and
then once it's gone through, it'll ask if you want
to leave a tip.
Speaker 1 (00:21):
Oh right, okay. This is a very common scene these days.
You find yourself patronizing a place like a coffee shop,
where you walked up to a counter, ordered and waited
at the counter for something you purchased to be ready
for your consumption. But in the not so distant past,
this wasn't a transaction on which we normally tipped. And
(00:43):
now it's not just coffee shops asking for your choice
of ten, fifteen, or twenty percent. It's the salad bar
across from the office, the dry cleaners down the block,
and even the local grocery store now has a tip
jar at the checkout. According to data from Pew Research Center,
seventy two percent of adults say tipping is expected in
more places today than compared to five years ago. But
(01:06):
the same survey also reveals that people are hella confused
about which services and products they should be tipping on.
Only thirty four percent of Americans feel very confident in
knowing which goods or services to tip for and how much.
Tipflation is a term many economists have started using to
describe the rising pressure for tips in newer spaces. But
(01:28):
how important is tipping to our economy? Should the consumer
be responsible for ensuring a living wage to service workers?
Or is there more to the picture than we're seeing?
And can someone please explain to me how much I
should be tipping for my mancho latte with almond milk.
Start taking notes because this.
Speaker 2 (01:45):
Is grown stuff.
Speaker 1 (01:52):
Hey, Hey, my tip weary friends, Welcome to another exciting
episode of grown Up Stuff how To Adults, the podcast
dedicated to help you learn grow up lessons like how
to calculate the tip on your dinner bill and figuring
out how much to tip your barista on a single
cup of coffee. I'm Mollie and as always I am
joined by a man who needs no introduction and always
tips twenty percent. Matt Heillo. Now. A few days ago,
(02:15):
Matt I sent you a link to a Pew Research
Center quiz. It's titled do you tip more or less often?
Than the average American. Tell me what some of your
results are. I'm going to share some of mine.
Speaker 2 (02:28):
My response is were I don't think we're all that
interesting because I typically tip, But seeing where most people
are tipping, so like eating at a restaurant where there
are servers, obviously getting a haircut, I was happy to
see because who doesn't enjoy catching up with their barber.
This is what was interesting though to me, it seems
like a lot of people are not tipping at the
coffee house.
Speaker 1 (02:49):
That's the area that confuses me the most. In this situation.
The question is are you always tipping off and tipping,
sometimes tipping, rarely tipping, or never tipping? And buying a
coffee or other beverage at a coffee shop. Twelve percent
said they always tip, another twelve percent said they often tip,
twenty seven the majority said they sometimes tip, twenty three
percent said they rarely tip, and twenty five percent said
(03:12):
never tip. I fell squarely in that twenty seven percent
because it's a quick interaction. I'm not sitting down and
being served consistently over a period of time, and I
just don't know now. I usually because again I have
built relationships with the coffee shops that I go to,
especially in my neighborhood, so I tip those places. But
if it's like a place that I don't have a
(03:34):
strong connection to, I don't know that I'll always tip.
Speaker 2 (03:37):
I worked at a coffee bar, and so there definitely
are different types of coffee. Like if I go to
a shop and they're just like opening a tap and
pouring coffee into it and giving it to you in a cup, like,
that's a different situation. But if you're going to what
they call like a third wave coffee bar, where they're
doing all the drinks, all the espressos, the mochas, they're
whipping up the phone, they're pouring your latte art, I mean,
that is a really big skill, and you're you're paying
(03:58):
for a little bit more of a bespoke coffe the
experience in bespoke surface, and so in that situation, I
would definitely tip.
Speaker 1 (04:04):
Well, Matt, I'm curious, what are some of the questions
you have about tipping still, Like, what are the biggest
points of confusion for you?
Speaker 2 (04:13):
You and I were talking about this where it's just
like if there is this big divide between like if
you're eating a restaurant with their service people are tipping,
and there's a restaurant withe there's no servers, people aren't tipping.
Then what we were talking about is kind of like,
then what are we tipping for? Are we tipping for
just the fact of someone having bringing walking food out
of a kitchen and putting it on your table? Like
is it like are you tipping for like the kindness
(04:35):
or the friendliness of the interaction, or how quickly people are,
you know, coming out to you, or.
Speaker 1 (04:41):
On the quality of the product.
Speaker 2 (04:42):
It's the quality of the product itself, you know, is
it situational? So are there any hard and fast rules?
Was like my biggest question? What about you? I agree?
Speaker 1 (04:52):
And on top of that, I want to add like
tipping practices during the holiday season, like for people who
you interact with every day, like I've you know, often
read about or heard about like tipping your landlord or
or yeah, what exactly are the rules? And like how
much should you be tipping during the holidays? But I
think you and I will get answers to all of
(05:12):
our tipping questions because if you haven't guessed it yet,
we're talking about tipping today.
Speaker 2 (05:19):
This is accurate and we're going to learn about it
all from our guest Stacy Vanocksmith.
Speaker 1 (05:25):
Stacey is the author of the book Machiavelli for Women
and also a long time public radio reporter and audio journalist.
You may know her from her work with NPR's Planet
Money and from her time as the Global Economics correspondent
for NPR.
Speaker 2 (05:39):
And while she was at NPR, Stacy guest hosted an
episode of the show Life Kit about tipping culture and practices. Today,
she is a senior story editor for Bloomberg Audio.
Speaker 1 (05:50):
Stacy Vanicksmith, Welcome to the show. We are so excited
to have you here. We are going to talk about tipping,
and I want to start off with a very very
basic question. How did tipping begin? Where did this all
come from?
Speaker 3 (06:03):
Well, thank you for having me. I'm really excited to
be here. I feel like this is a hard question
to start with because it gets very dark very quickly there.
It started after the Civil War when slavery ended. Okay,
so people who had been enslaved were suddenly on the
job market getting jobs, and I think a lot of
(06:24):
service jobs were suddenly opened up to people who'd been enslaved,
and the pay for these was abysmal. And so this
practice started of people tipping because tipping seemed like sort
of a middle ground between someone making a living wage
and someone being enslaved essentially. So it's the history of
it is horrific. And you know, if you go to
(06:45):
other countries, if you travel abroad, a lot of times
a tip is like a couple bucks or you know,
just sort of a like thank you. It's not like
a substantial part of someone's pay. It's only really here
that we do that tipping. It's just a mess. And
I've looked at tipping for a while. I find it
really interesting. It is a huge part of our culture.
(07:08):
I think there are good things about it, for sure,
But I don't think I've ever talked to anyone who
is like this system is awesome, Like no one likes it. Yeah, no,
but it's our system. This is the system we have.
Speaker 2 (07:20):
It's actually interesting to learn that because like, there's something
to me that is always and I used to work
in restaurants and stuff, there's something to me is always
felt inherently wrong about tipping. That like, if people are
like depending on this as part of their cell, then
you're not paying your staff what they deserve to be paid.
You know, my wife and I one of our favorite
restaurants is this Japanese restaurant called Ichran, and they've carried
(07:42):
over their culture of it being a no tipping establishment,
and that's part of why we love it so much.
It just feels like if they're not asking for a tip,
then they're paying their workers a fair wage and the
service is still awesome. But that said, tipping doesn't exist
in many cultures. But are we seeing a shift where
other places are starting to adopt our system?
Speaker 3 (08:02):
I feel like all of us have deep emotions around tipping,
especially lately because money is tight, prices have gone up
so much. The culture around tipping has changed pretty suddenly
and pretty extremely. But the idea of not tipping, it's
so hard, and you know, people will say like, oh,
you don't have to tip here, and it's like, I don't.
But I actually think the culture around tipping was starting
(08:24):
to change here before the pandemic in the US, because
there was like Danny Meyer and David Chang had like
published op eds in the New York Times saying like
we're not having tipping, and they explained it saying, listen,
this creates a lot of inequity in the kitchen. I
think Danny Meyer was like, my chefs are making less
than the bartender because of tips, and they don't get
(08:45):
distributed equitably. And I just make sure I pay everybody
a living wage. And so, you know, you'd go to
one of these restaurants kind of like you were saying, Matt,
and there was this feeling of like, Oh, everybody's actually
being taken care of, they are making a living wage.
This isn't on me. Yeah, And I mean, I think
the reason that we find this topic so endlessly fascinating
(09:06):
and interesting is because we know there's something wrong with
the system, and we feel it all the time. I
think that strange feeling you were talking about, Matt, is
like that you're like, something's wrong here. I'm being asked
to tip as if it's just like a thank you,
but it feels like it's not really a thank you.
You're supplementing someone who's been underpaid. So it's messed up.
Speaker 2 (09:30):
Yeah, yeah, it is.
Speaker 3 (09:32):
This gets very politicized very fast. People have extremely strong
opinions about tipping. I think one of the reasons that
it's hung around is a lot of like kind of
powerful interest groups around restaurants, Like basically it's a way
for restaurants to post lower prices and to still get
a higher amount of money to employees, like a competitive
(09:52):
pay to employees. And I think when restaurants try to
not do that, which Danny Meyer and David Chang did
before the pandem but they both went back to tipping
during the pandemic. There really people were having so much
trouble finding people to work. And if you're going to
pick a restaurant to work at and it's really competitive
and you have like five job offers, are you going
to go to the place that's like, we're not going
(10:13):
to tip you, We're going to pay you a solid
living wage versus Especially during the pandemic, people were I
think had an increased awareness of essential workers and the
importance of that work and the difficulty of it, and
so the tips were pretty good. It's like, I'm not
gonna not get tips. So I think they went back
to a tipping situation just to be competitive enough to
(10:34):
get the workers they wanted they had to.
Speaker 1 (10:36):
Interesting, Yeah, tipping can be super fraught and complicated. While
some service workers saw an increase in tips from twenty
twenty to twenty twenty one, especially food delivery workers and
workers with a more distant role at quick service and
full service restaurants. According to a study published in the
(10:58):
Compensation and Benefits or View, others saw a decrease in tips,
especially those working in full service restaurants with more face
to face interactions with customers. But the global pandemic hasn't
been the only catalyst of change in our tipping practices. Today,
technology may be the largest driver for tipping. In March
(11:18):
of twenty fourteen, NPR reported that in some businesses, employees
saw a fifty percent increase in tips with the introduction
of new swivel screened payment processing systems like Toast, Clover
or Square. These new tools also beg the question how
much of that tip actually gets to the person on
the other side of the counter.
Speaker 3 (11:41):
Now we have like the rise of these tip screens
and the dreaded screen turn and Square owns a lot
of them, and Square takes a cut of the whole transaction. Really, yes,
tip included, So if you tip more, their cut is bigger,
and then the restaurant will choose to you either honor
(12:01):
the whole tip or whatever.
Speaker 1 (12:03):
Wow, Okay, that is very interesting.
Speaker 3 (12:06):
Yeah, so they have an incentive to have higher tipping numbers.
And then I think for employers, like they want to
keep their workers happy, they need to keep their workers,
and it's just easier for them to not deal with
raising prices and pay their workers maybe less than a
living wage and just be like, well, you can make
(12:28):
it up with the tip. And then there you are
in this awkward situation, just trying to get a coffee,
and all of a sudden, you're like, nine dollars feels
like a lot, but you're looking at this person who's
looking at you, and you're like, I guess twenty five
percent is good, yeah, and you know, and then it
raises all these questions and people get very emotional. During
the pandemic, I think a lot of people wanted to
(12:51):
tip more. They wanted to tip workers more. Is just
like a gesture.
Speaker 2 (12:54):
We were all they were essential workers, right, yeah.
Speaker 3 (12:56):
We were trying to help each other out. Now things
are a little different, but tipping has just increased. And
also we started tipping people we didn't use to tip before.
During the pandemic, right like, there was a tip jar
and my supermarket, and the tip jar stayed and now
we're all kind of we don't want to be that
person who's like, I'm not leaving a tip.
Speaker 1 (13:14):
Yeah, you bring up a really good point of like
what is the reason for tipping, Like are we tipping
on skill? Are we tipping on general treatment and personality?
Speaker 3 (13:23):
Ostensibly we're tipping because we are acknowledging exceptional service or
good service as like a thanks, you did extra work,
here's extra money. But functionally that is not how the
tips are being used in a lot of cases, and
this is where it gets even more complicated state by
state and everything. But in a lot of cases like
(13:46):
that money is getting people up to minimum wage. So
in that case, it's not really acknowledging exceptional service as
much as it is like, here is my contribution towards
you making a living wage, and that I think we
recognize both things are going on, and you sort of
feel resentful. It feels like a bait and switch. It's
(14:07):
like this price was presented to me. It's like, Okay,
this coffee is supposed to cost five dollars, but really
the coffee doesn't cost five dollars. Really the coffee costs
eight dollars, and then I can choose to pay five
dollars for it, and I will be taking money away
from this person who is looking at me, who made
my coffee, and like, just tell me it's eight dollars.
(14:27):
I don't know. It puts us off. I think this
is why people get so emotional about tipping.
Speaker 1 (14:36):
Not only do people get emotional about tipping, but there
also doesn't seem to be one school of thought on
how to approach tipping. According to data from the Pew
Research Center, twenty one percent of Americans say that tipping
is more of a choice, while twenty nine percent say
it's an obligation and forty nine percent say it.
Speaker 2 (14:55):
Depends on the situation.
Speaker 1 (14:57):
Many of us know that tipping is a way to
help work in the service industry make a living wage,
but many consumers feel like the burdens shouldn't fall on them,
and more than seventy two percent of Americans are opposed
to businesses including automatic service charges or gratuity onto their bill.
Speaker 3 (15:16):
People always looking for who to blame, so some people
are like, oh, workers are so entitled, they don't want
to do anything. They expect these huge tips. That's not true.
In a lot of cases, workers are not making anywhere
close to enough to live right or people is like,
it's the business owners. They're underpaying, they're workers, they're exploiting people,
and customers are expected to make up the difference. Well,
(15:36):
that's true, but they are trying to get people to
buy their stuff, and if they price in higher wages,
people aren't going to buy their stuff. So then it's like, well,
it's the customer's faul because they don't want to pay workers.
But we've all seen prices rise faster than our wages,
and our buying power has diminished. Our credit card debt
(15:59):
has gone through the room poof our savings has liked.
Speaker 2 (16:01):
What savings resolved? Savings? What's that?
Speaker 3 (16:04):
I don't it's so true. So we are all struggling
and basically passing this football of higher prices around and
it converges on tips and like this weird cultural awkwardness
that is the American tipping situation.
Speaker 2 (16:23):
And I want to drill down a little bit onto
something that you'd brought up earlier, which is like this
concept of a living wage, the concept of a minimum
wage and getting people up to if not minimum, then
a living wage. This is something that I knew about
for a long time, but I had no idea was
actually legal. So, like minimum wage across the country is
seven to twenty five, but I know some people who
(16:44):
make two dollars an hour because they were getting tipped
on top of it. And you know, my first question
for a long time was like how is that even legal?
But it turns out is it is legal because of
a thing called a sub minimum wage. Can you talk
to us about what a sub minimum wage is?
Speaker 3 (17:00):
So Sylvia Aligretto is an economist. She also worked as
a tipped worker as a waitress and a bartender for years,
so she's very familiar with This is actually what inspired
her work on minimum wage. So, the federal minimum wage
is seven dollars and twenty five cents an hour. States
will often have higher minimum wages, like Washington State their
(17:20):
minimum wage is sixteen dollars an hour. There's also a
federal subminimum wage, which has not changed since like nineteen
ninety three or something. What I know, it's two dollars
and thirteen cents an hour. Oh my god, you can't
pay any work or this. They have to be in
a certain industries, but the rules around it are very vague.
So like a lot of people like if you work
(17:40):
at a car wash or your massage therapist, or work
as a bartender or a server, you are eligible to
get a subminimum wage. Now, a lot of states do
not allow that, like Washington State with its sixteen dollars
minimum wage does not allow for subminimum wages, but a
lot of states do. And so depending on where you live,
the pay and tipping situation is just really different. For
(18:05):
the workers who are serving you your lunch or coffee
two dollars and thirteen cents. It's mind blowing. It's like
what someone would make in the thirties.
Speaker 2 (18:16):
And going back to this, it just feels illegal to me, Like,
I just cannot believe that something like that is legal.
Speaker 3 (18:21):
Well, here's what is supposed to happen. So, technically speaking,
you can pay someone a sub minimum wage, but if
their tips do not get them up to minimum wage,
the employer's supposed to make up the difference.
Speaker 1 (18:34):
Oh interesting, here's the catch.
Speaker 3 (18:37):
So what Sylvia ali Gretto told me, and what she
found in her research was that a lot of times
like this just doesn't happen in practice. Because she used
this example and it sort of rang very true for me.
She's like, you know, let's say it's someone working a
diner shift in the middle of the night. This woman
is desperately trying to get off of overnights, but she's
trying to get in good with her boss. Her tips
(18:59):
fall short. She's supposed to then go to her boss
and say like, hey, I did not make enough money.
You need to supplement my income. But if she's trying
to get in good with the boss, or feels like
that's going to be badly received, or is worried about
losing her job, she may not do that. And Sylvia
Alagreta was like, I had a bunch of service jobs.
(19:19):
No employer ever once asked me to report my income
to be like did you actually get up to minimum wage?
And probably doesn't happen a lot.
Speaker 1 (19:29):
Well, and there's probably no way for the government, local
or federal to penalize the employer if that was the case.
You know that they needed to because the tips aren't
always reported accurately, either right.
Speaker 3 (19:43):
They're in cash or like, you know, the employer can
be like listen, we didn't know. Like it gets really fuzzy,
and I mean, I think Clinton tried really hard to
raise the sub minimum wage, but apparently the Restaurant Association
was like really fought for this and was like, you know,
jobs will be lost if this happens. This is always
(20:03):
the argument around minimum wage, and I don't think it's
a completely false either. Like I don't want to villainize
small business owners because I also think that they're dealing
with a lot, but you end up with people making
two dollars and thirteen cents an hour, and like customers don't.
Speaker 2 (20:18):
Know no, Yeah, And this is the thing that always
makes me like realize that, like, man, I have to tip,
Like I don't really even care if like the service
isn't that bad. It's just like people are making two
dollars a goddamn hour, yes, Like, and I don't think
anyone knows this really, Like I worked in the industry
and I didn't even really understand the concept of the
subminimum wage. So it's really important for people to know this.
Speaker 1 (20:41):
Well.
Speaker 3 (20:41):
It's so hard to know because first of all, like
every state, some states have different sub minimum wages, so
if you happen to travel to a different state, you've
got to look it up. Economic Policy Institute has a
good wage tracker that is free, but it's so confusing,
and you don't know what a particular business is doing either,
Like even if if you know the laws of the state,
you don't know what a business is doing. And like
(21:02):
some employees are sometimes counted a sub minimum wage. That
would surprise you. It's so confusing. If you're a customer,
it's really hard, Like you just do your best. You know,
it's complicated. Tipping, It's complicated.
Speaker 1 (21:16):
Tipping It's complicated. That is the title of this episode,
Tipping It's complicated.
Speaker 3 (21:20):
We are correct to be uncomfortable and upset about tipping.
That is what I would tell everyone. I talked to
a barista for a tipping story I did for NPR,
and he worked in Philly. He's so wonderful. He was
in his thirties and he was like, you know, I
love this job. I love making espresso, Like this is
my career. This is my job. And he's like, people
(21:41):
look at my job like, oh, it's okay if you're underpaid,
because this is a job for like young people or
people who are transitioning, or it's a side hustle. This
is not someone's whole job. But he's like, it is
my whole job. And he said, now this is crushing.
I have never in this since I talked with him.
He had to do the screen turn and he's like,
(22:02):
it's really awkward. People say all kinds of weird things
like and he's like, I'm a human being, Like it's
really hard when someone's like, well I'm not tipping, or
why is the tip so high? Or whatever? And I said, well,
can you tell if somebody doesn't tip? Can you tell
what buttons people push? Essentially? Yeah, because there's always that
weird thing where the person like turns the screen and
kind of looks away. And I said, well, do you
(22:23):
feel bad if someone doesn't tip or just just kind
of roll off your back. He's like, no, I feel
bad because he's like it's like this person is saying
like I don't care if you make a living wage
or not.
Speaker 1 (22:33):
That's so hard.
Speaker 2 (22:35):
Yeah, And I think that's my other problem with the
whole situation too, because it's like they deserve to have
a living wage. Like if you're working a job and
you're working a job eight hours a day, like what
gives here with you know, people feeling like they deserve
less than a living wage. It just blows my mind.
Speaker 3 (22:51):
Yeah, yes, no, that's really that's so true. But I
do also have a lot of sympathy for customers because like,
we are getting asked to tip a lot.
Speaker 2 (23:01):
Oh absolutely, it's tip plac.
Speaker 3 (23:03):
That's the new term, I mean, and it's kind of
it's true, right, And there's some data from bank greet
that people were starting to tip less because it's just
like at a certain point, you can only afford so much.
So like from an economist's perspective, it's like, well that's
not great either. It's like, okay, well I'm just going
to get a coffee once a week instead of five
days a week or whatever.
Speaker 2 (23:21):
It is.
Speaker 3 (23:21):
Well, that's really bad for the coffee and the worker
and everybody too. So I think we're all kind of
in a tough situation together, and it's messy. Why is
it so important that we continue to tip our uber eats,
grub hubs, seamless delivery people, and our Uber and Lyft drivers. Right,
A very tiny percentage of people tip their Uber and
(23:42):
Lyft drivers.
Speaker 2 (23:43):
Right.
Speaker 3 (23:43):
And I was talking with Schubronchu Sing about this. He's
a professor of hotel management and this writing is so true.
He was like, by the time the app asked us
for a tip, our interaction with them is done. It's
not a person standing in front of a screen. And
I think because we do feel so sort of overtaxed
and overtipped and it's like do you want to leave
five dollars? It's like, I don't know. That ride was
more expensive already than I thought it was going to be.
(24:05):
But those workers are often earning like not much. And
this is the same with hotels too. I mean there's
a big socialization cultural issue with this too. Right, we
feel that pressure right with the screen turn or even
at a restaurant when someone leaves a tab. It's like
the personal interaction having to kind of face the person
(24:25):
who is being affected by your tipping decision. I think
affects our tipping decisions a lot. And if you know
you're never going to see the person again, but it
doesn't mean that that person isn't the person who needs
your tip. More so, I think it's worth thinking about.
I do not want to pile guilt on anybody or anything,
but I just think an awareness of how little a
(24:47):
lot of people who clean hotels earn, how little a
lot of uber and lip drivers earn, is important to
just keep in mind and like to just try to
give what you can, or to have a strategy in place,
even if it's not perfect, just to think about it
instead of just like responding to the pressures of the moment,
which I am one hundred percent guilty of.
Speaker 1 (25:06):
I think it's a very adult thing to feel a
little guilt every now and then and to have it
move our actions in a better way.
Speaker 3 (25:13):
I think that's true. Actually, maybe the adulting lesson here
is that, like you learn how to evolve your relationship
with guilt. That's a big adulting topic. I think we're
here for it.
Speaker 1 (25:25):
Though.
Speaker 2 (25:25):
Well, it's interesting because I think this is the first
episode where it's really more like we just need to
understand more about tipping, because again, I think that people
could maybe come into this going like, God, I just
hate tipping. I'm hoping they're gonna come here tell me
I don't need to do it. And it's interesting that like,
the more we know about it, that we realize how
important it is and how people are unfair. You know,
it's a raw deal for everyone. It feels like a
(25:48):
damned if you do, damned if you don't sort of
an episode to me, but also like it is important
to know all this stuff Yeah, it's funny because we're
I guess I'm walking away with knowing more but not
really sure about like what the act item is for
people here.
Speaker 3 (26:02):
I feel like that's the most adult thing of all,
walking away with the more nuanced understanding of the problem
and no solution.
Speaker 2 (26:11):
Yeah.
Speaker 3 (26:11):
I mean, I think what we're really dealing with here
is inflation, and I know I keep talking about that.
But like food delivery, I think is such a great
example because the food delivery situation is so extreme. It's
like you order a burrito that costs nine dollars and
somehow it's forty dollars. Yeah, after all, a sudden done,
(26:33):
and that is so many fees get piled on there,
like fees for everything, and so the Biden administration has
done a big push on this, pushing back against fees,
like hotels are really guilty of this, like resort fees, airlines,
ticket change fees. Some of the fees are huge. But like,
I think food delivery is one that we can all
relate to where you're like, what but at this point
(26:55):
you're like, I want the burrito.
Speaker 2 (26:56):
I guess I'll pay forty dollars for it.
Speaker 3 (26:59):
And then on the top of that would you like
to tip your driver? You know, the one thing I
can recommend is like to exclude the fees when you tip.
The suggested tip will include all those fees, and you
shouldn't be tipping on top of fees and taxes. But
there's a term economists used for all this stuff together,
like higher tips and fees. It's called stealth inflation. And
(27:21):
there's a sort of a school of thought amongst some
economists that inflation is actually higher than we think it
is because of stuff like this. Fees sometimes do get
factored into the inflation index that the government looks at,
but tips don't. So all together, like the prices of
things maybe have risen more than even has been acknowledged.
(27:44):
And I think that's also why it's so upsetting, because
we are starting to realize that, like maybe there's a
big lifestyle adjustment that has to happen. It's like this
dirty secret in our economy, Like businesses don't want to
acknowledge it. We don't want to acknowledge it. So we're
like charging tons of things on our credit cards, paying
what looks like a pretty reasonable price that ends up
being like much higher than we thought. So I don't know.
(28:06):
I think that's a lot of what's happening. And I
think that's a lot of like why we're upset is
we sort of feel like something's being hidden from us,
which I think it is, and the most vulnerable people
in our economy are the ones often bearing the brunt
of this. We're sort of at the mercy of people's
tips and goodwill and budgets.
Speaker 2 (28:28):
Frankly, I think it's interesting that you brought up tipping
on top of tax and I had never thought about
this until I was at a restaurant with my brother
and he's always been better at math and I and
he's like, you're tipping on top of the tax And
I was like what And he was like, so, basically,
what that means is you're including the tax as a
portion of the total tip you're paying, which is basically
like thanking a fee with a tip. And I was like, Oh,
(28:50):
that's interesting. I've never really thought about it that way.
But when you talk about all the services and fee
attacking on top of it, you're also paying a percentage
of those too. So is this something that you you know?
Because Molly and I were debating about this beforehand.
Speaker 1 (29:03):
Like because I am always just like stop nickel and
diming the people. As we've just discussed, who're earning two
thirteen an hour.
Speaker 2 (29:10):
Yeah, so is there a hard and fast yeat guidance there?
Speaker 3 (29:13):
I mean, I don't think there's hard and fast guidance.
I think Molly has an excellent point. What I would
say to counter that a little bit is if you
were in a position where you were really trying to
figure out what you can afford, and you want to
be a good person and a good customer, but your
budget is really limited, you can just take the core amount,
add the tip onto that, and that is a decent tip,
(29:34):
Like you do not have to feel bad about that tip.
So you can sort of like make some rules for
yourself where you're like, Okay, well I'd love to leave more,
and maybe at some point in the future I can,
but for now I will leave this. It's like, okay,
what's the minimum tip that I leave? Like, Yeah, let's
say the service is terrible, let's say the order's wrong,
everything's bad. The tip now becomes just a function of
(29:57):
you sort of acknowledging and honoring this person's like wage situation,
and so like, what's the amount that you want to
leave in that situation. And then if the service is
amazing and you love the person and they've crafted you
the most beautiful whatever latte art you ever seen, or
you just think they're wonderful and you want to acknowledge that.
(30:17):
I think there's tipping more is never going to be
a bad thing. But I would also recommend one thing
you can do, especially too if you're pinch just tipping
in cash is always better.
Speaker 1 (30:28):
Oh, which, like I know.
Speaker 3 (30:29):
A lot of us don't carry that much cash around now,
but if you want to sort of a fail safe
way to like make sure you're getting money into the
right hands, cash is the best.
Speaker 1 (30:39):
Yeah.
Speaker 3 (30:40):
But also tipping in cash feels weird, and then I
feel like if I do hit the like no tip,
then I feel like I want to be like, but
I tipped in cash. Did you you saw that right?
Speaker 1 (30:50):
Right?
Speaker 3 (30:51):
Yes?
Speaker 1 (30:51):
I always feel like I need to like, yes, I
need to like add that footnote of like it's in cash.
Speaker 3 (30:56):
It's like tipping theater, right, You're like waiting until they're
looking so then you can pretend like you're sneaking money
into the tip jar. But you're like, I just want
you to know I'm tipping you, yeah, or.
Speaker 2 (31:08):
Write down like zero and then put like cash in
the the line on the on the receipt.
Speaker 3 (31:13):
Oh that's smart.
Speaker 1 (31:14):
But the fact that we even have to write cash
is because it's part of the tipping theater. We're like,
we don't want you to.
Speaker 2 (31:20):
I'm writing zero because I like you guys did at there.
I'm like this cash there too.
Speaker 3 (31:25):
Yeah. Yes, I don't know what people in other countries
do with the enormous chunk of our brains that we
were spending like doing all these calculations and dealing with
all this like emotional like navigating this like emotional terrain,
Like it's a terrible situation. Tipping is terrible.
Speaker 2 (31:41):
Hopefully they're putting it towards solving the climate crisis.
Speaker 3 (31:44):
That's what I absolutely, Yes, somewhere on Square there is
a button for saving the planet.
Speaker 1 (31:52):
Coming up on grown up stuff How to Adults.
Speaker 3 (31:55):
I had a plumber come and he was like, oh,
can you pay me on Square? And suddenly I was like,
am I supposed to tip my plumber? That is where
things get really tricky.
Speaker 1 (32:07):
Will be right back after a quick break and we're
back with more grown up stuff How to Adults?
Speaker 2 (32:19):
So now we want to get down to like what
is like common sense practice around tipping. So what really
are the services and or goods that we really should
be tipping for every single time?
Speaker 3 (32:31):
I would say, first of all, look up where you
are and look up what the tipping rules are in
your area. I think that is a big deal. Then
I would say, like anyone who's potentially earning a sub
minimum wage, that is your absolute top priority, because they're
making potentially two dollars and thirteen cents an hour. Other
than that, I mean seven twenty five, which is the
(32:54):
federal minimum wage. Like, that's also not a ton. If
you are in a business that is encouraging you to tip,
or where the tip is sort of part of the transaction,
often that is a signal that that person is not
really making a minimum wage, that they are potentially counting
on your tip to get up to a living wage.
(33:16):
So it's not just like, oh, there's a tip jar
at the dry cleaner. It's like the tipping is a
big part of the transaction here. I think that's a tell.
After that, I would say, I know it's a lot,
and hotels are a lot, but I would say, like
leaving a tip in a hotel or like uber drivers
often things like that, but you don't have to tip
(33:39):
twenty percent in every case, But just I think leaving
something is important, and if you're really really on a budget,
I think even just leaving what you can is good.
And I would say, like the key thing is knowing
where you are and what the rules are where you are,
and that is a really good baseline. And yeah, I
would say, just like be kind to yourself. This is
(34:00):
a mess, Like it's a mess. That's my major takeaways,
Like this is chaos.
Speaker 2 (34:05):
In some of the research that we did, I came
across this idea of like are we now tipping at
places where we really shouldn't be?
Speaker 3 (34:12):
Oh yeah yeah. I got some very funny comments where
people were like I had a plumber come and he
was like, oh, can you pay me on square? And
suddenly he was like I was like, am I supposed
to tip my plumber? That is where things get really tricky.
And I think the best advice I got was from
Schubronchu Sing and what he said was winn doubt I
(34:33):
tipped ten percent okay, And I was like, okay, Yeah,
it's one of those things where like it's not good, Like,
no one's happy in that situation, but at least, like
the person who you tipped ten percent is not happy.
You were not happy. No one's happy. But I think
it's like it's sort of like a decent feel. I
felt it was like a reasonable and decent way to
deal with a hard situation.
Speaker 2 (34:53):
Maybe this is what we're learning is if we can
get to a place where no one is happy, then
maybe that's exactly where we should be.
Speaker 1 (35:00):
You are a real adult that everybody's happy.
Speaker 2 (35:02):
No, it's happy, everyone's happy.
Speaker 3 (35:05):
Yes, exactly. Actually I talked to a man who worked
in the music industry. He would like negotiate deals with
like musicians and labels, and that's what he said. I
was like, oh, giviny negotiating tips And he said, well,
it's usually the sign of a good new negotiation if
no one's happy, And I was like, okay. He's like,
if someone's like thrilled, usually that means that somebody got screwed.
(35:27):
And if nobody's thrilled, that's usually a sign of like,
then everybody got a little screwed. And maybe that's the
best we can hope for in this world.
Speaker 1 (35:34):
That's true that's something. Pe Research Center said that fifty
seven percent of Americans say they tiped fifteen percent or
less at a sit down restaurant. As we kind of
mentioned earlier, I always do twenty on top of all
the taxes fees. Yeah, is this above and beyond? Like
what is again? Is this a regional thing we talked
(35:56):
a little bit before, like where some people are like,
or is twenty the new fifth? And we should all
be at a sit down restaurant scenario, we should all
be assuming twenty percent, whether that's if you choose to
do it on top of the fees or if you
decided to do it, you know, before all the taxes
and fees.
Speaker 3 (36:11):
I would say the very minimum should be fifteen percent.
I mean, I think just based on the world we
live in now, I think if twenty still is a
good tip, and then above that is like a great
tip and a sit down restaurant, like I really would say,
I mean, if the person throws water in your face,
tip ten percent.
Speaker 2 (36:32):
And this also the thing brings up something that you
had mentioned in your NPR article that like the people
should feel empowered to hit custom tip and to leave
fifteen or twenty if that's what they want to do.
Speaker 3 (36:43):
Yes, this was something that I sort of started doing.
It was like, okay, you make a rule for yourself,
and it was like, I will tip twenty percent, So
I think normalize custom tip.
Speaker 1 (36:53):
I love that.
Speaker 3 (36:54):
Yeah, so I liked that suggestion too because it's sort
of I feel like part of what is upsetting as
a customer is you sort of feel like all this pressure.
It's like one of those things where it's like all
this stuff happens and then you're like outside of the
coffee shop with your coffee and you're like, wait, how
much did I just pay? And you sort of feel like.
Speaker 2 (37:11):
It feels like they're putting this emotional social pressure on
you in the moment, and by putting twenty five is
the minimum they're getting away with something, Whereas like you
should reclaim that moment and that awkwardness probably no going
into the transaction that you might be faced with that
and go like, hey, like I've decided for myself that
I'm going to tip twenty percent, you know, or I've
decided for myself I'm gonna tip fifty percent, so I'm not
(37:32):
going to feel bad in this social moment to hit
custom tip and leave what I'm comfortable with.
Speaker 3 (37:38):
I like that idea, like reclaiming the awkwardness of that moment,
because I do feel like there's this time pressure, there's
this emotional pressure. You're just wantaking coffee, and it's like
it's a lot coming at you all at once, and
you haven't had coffee yet.
Speaker 2 (37:53):
Do you know what I mean?
Speaker 3 (37:53):
Like it's just right coming at you.
Speaker 1 (37:55):
That's the real crime here, and you haven't had your
caffeine yet.
Speaker 3 (38:00):
All this stuff is converging on the screen. Turn It's
like amazing, we're all still upright and talking.
Speaker 1 (38:05):
You know, Yeah, this is so true. I want to
talk about tipping that we experience kind of in a
different context, which is around the holidays. How much should
we be tipping people who we interact with every day
that we don't tip every day.
Speaker 3 (38:20):
It depends, I think, on where you live. Like here
in New York, it's traditional, like if you live in
a building with the doorman, you're supposed to tip the doorman, right,
And from what I've heard, it's like around ten percent
of your rent or something like that of your monthly rent,
yeah yeah, or like tip your super if your super's
the one you interact with. Like I live at Ability.
It doesn't have a doorman, but I have a super.
(38:41):
So that idea is like you tip your super. And
then like you're postal worker is someone you can think
about tipping too at that time because there obviously that's
like a big time of year, they're working really hard.
So those are the two that come to mind. We're
not talking about people who are counting on your tip
to get them to minimum wage. I think that's like
(39:02):
an important thing to remember, like that tip is really
a tip. It's like really an acknowledgment of a relationship
and service to me, that feels like so I would
say that sounds great. I mean I would say, like,
find what feels appropriate to you, sort of figure out
what the custom is, figure out like what the range
within the custom is, and find like the point within
(39:26):
that range where you feel comfortable. And also it's like
depends on what you can afford. And I mean, I
think you just try to do what you can.
Speaker 2 (39:33):
But Molly, you will never be a monster for making
someone baked goods and giving them a personal note during
the holiday.
Speaker 1 (39:40):
But maybe it's just like no, just give them more cash,
get your shit together, give them more cash.
Speaker 2 (39:45):
I think, I think anyone would appreciate that. And I've
had your baked goods and they're delicious. Oh, thank you.
Speaker 3 (39:51):
This is Brooklyn. You're supposed to be able to pay
for things with baked goods. Yes, we still have a
little soul in this country. I like to think it's
not all about money. Thank you, Stacy.
Speaker 1 (40:01):
That makes you feel better.
Speaker 3 (40:02):
It's just an acknowledgement of value. And you could do
that in a number of ways.
Speaker 1 (40:06):
Yeah.
Speaker 2 (40:06):
I like that. You're right.
Speaker 1 (40:08):
You're right now. I don't plan on like just being
like here, Burisa, here's for my coffee today.
Speaker 3 (40:13):
Here's one scone.
Speaker 2 (40:14):
I begged him all every day. You give me a scone,
I would give you.
Speaker 3 (40:21):
I will give you a scone. Yeah.
Speaker 1 (40:24):
Well, Stacy, you are now in a new position. Where
can they find what the next thing that you're working on?
Speaker 3 (40:30):
So I'm at Bloomberg now. I'm working as an editor there,
but I am also filing stories from Marketplace a lot,
so marketplace dot org is probably the best place right now.
It's fine.
Speaker 1 (40:39):
My stuff amazing. I will constantly be reading and listening
to all of it, So, all of your work, So thank.
Speaker 3 (40:46):
You so much, Thank you and I will be thinking
about your scones.
Speaker 2 (40:50):
Thank you, thank you.
Speaker 1 (40:52):
Listen player cards, right, Stacey, I might mail yourself thinking
about and scones.
Speaker 2 (40:57):
Sounds like a good deal.
Speaker 3 (41:00):
Yeah, I do my best. I do my best, all right,
Thanks you.
Speaker 2 (41:06):
Guys, Stacy.
Speaker 1 (41:10):
You've got some tea scones coming your way. To show
my appreciation for this illuminating conversation about tipping. This really
has been a grown up stuff first, because there's not
necessarily a clear path forward on tipping, but I've learned
so much about how and why it started and a
deeper understanding of what it means. Here's what else I'm
taking away from our conversation with Stacy Vanocksmith on tipping.
(41:33):
The practice of tipping in the United States began shortly
after the Civil War. During reconstruction. People who had formerly
been enslaved had limited job options, so many took on
roles in the food and service industry and agreed to
work for tips without a wage. Tipping is a very
complicated ecosystem, and some restauranteurs have tried to get rid
(41:55):
of tipping and increased the base pay for all of
their staff, but then they faced the chair lenge of
employees going elsewhere to try to make even more money
in a role where the pay is far less, but
there is an opportunity to make a lot more with tips.
Those newer digital tools restaurants are now using to process
payments like square or toasts. You know they're the tablet
(42:15):
screens that turn around to face you and ask you
how much you want to tip. Well, those companies are
taking a percentage of every transaction total, including the tip.
So while these have made tipping very easy for consumers,
and in some cases have even increased the average amount
that we tip, cash is still best when it comes
(42:36):
to tipping service workers. The federal minimum wage rate is
seven twenty five. However, if you are a tipped employee,
then your employer is allowed to pay you a subminimum
wage of two dollars and thirteen cents. If the tipped
employee doesn't make enough in tips and that sub minimum
wage to equal the federal minimum wage, then the employer
(42:58):
has to make up the difference. That being said, is
unclear how often employees are reporting this and receiving the subsidization,
Nor do we know if employers are frequently checking in
with their workers to make sure they did make enough
around the holidays, you should probably think about tipping your
super or building staff. But if that's a lot for
you, you can always do a little less and share things
(43:20):
like baked goods and a personalized note to acknowledge the
relationship and show your gratitude for them. If you're really
struggling to figure out whether or not you should be, tipping,
ten percent is a good baseline to start, and as
Stacy says, the sign of a good negotiation is if
everyone leaves a little unhappy. Don't be afraid to custom tip.
(43:42):
There are a lot of fees and taxes added to
bills today, especially food delivery bills. It is completely acceptable
to tip on the subtotal before all of those additional charges.
And finally, sometimes being an adult is just informing yourself
about a topic, developing a more nuanced understanding, and feeling
(44:03):
even more confused and conflicted on the right approach. Matt,
I never thought i'd say this, but I now think
I would potentially consider tipping on the subtotal rather than
the total. I also feel relieved to hear that Stacy
approves of my holiday tipping practices. But Matt, what stuck
with you from this episode?
Speaker 2 (44:24):
I totally agree with you, and actually I will tip
on the subtotal. But what I will do is carry
cash with me because the thing with me is, like
you know, hearing about all this stuff about sub minimum
wages and how hard people are working in inflation and
people are getting squeeze, I want to make sure that
my tip is going directly to the person who is
providing the excellent service. So cash is going to be
(44:46):
flowing back into my pocket very shortly, and I will
make sure that I am tipping at least twenty percent
in all of the scenarios we covered, but giving that
cash directly to the person that's helping me.
Speaker 1 (44:55):
Yeah, I agree, because that sub minimum wage truly.
Speaker 2 (44:58):
Blew my mind, mind blowing.
Speaker 1 (45:00):
Tell the good people out there listening, what is next
on grown up Stuff How to Adult?
Speaker 2 (45:04):
Next episode, we're digging into dog ownership because it turns
out having a dog is a lot more like having
a kid.
Speaker 1 (45:11):
I wanted a dog for so long, Matt, like a
dog did really just call my own? But I know
that right now I don't have a life that is
conducive to.
Speaker 3 (45:21):
Having a dog.
Speaker 2 (45:22):
Don't yet despair, because we'll find out for sure in
two weeks on the next episode of Grown Up Stuff,
How to Adult Ed.
Speaker 1 (45:28):
Remember you might not be graded in life, but it
never hurts to do your homework.
Speaker 2 (45:32):
This is a production from Ruby Studio from iHeartMedia. Our
executive producers are Molly.
Speaker 1 (45:37):
Soshia and Matt still O. This episode was engineered by Matt.
Speaker 2 (45:41):
Still Ow and written by Molly Soosha.
Speaker 1 (45:44):
This episode was edited by Sierra Spreen.
Speaker 2 (45:48):
And special thanks to our teammates at Ruby Studio, including
Ethan Fixel, Rachel Swan Krasnoff, Amber Smith, Deborah Garrett, and
Andy Kelly. Four
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