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Gratuity is the Greatest Wage Innovation Ever Devised

By Dan Whitley | Think Pieces | March 1, 2016 |

By Dan Whitley | Think Pieces | March 1, 2016 |

With all the arguing in the media these days concerning minimum wage, there’s been a kind of secondary argument — a North Africa campaign, if you will — concerning the wages of tipped service workers, and a rehashing of old and tired attacks on the gratuity system that America loves to hate and just cannot quit.

I happen to have a horse in this race, and have had one for over six years; I make my living behind the wheel, slinging food for a local restaurant, and have waited tables as well. Thus am I terribly biased, and I don’t feel any particular need to apologize for that, especially now that I’ve given a warning. Anyhow, gratuity is going to hang around for a long time, and not just because American business and restaurant owners are a notoriously stingy lot.

A history lesson might behoove us here. As far as I know, the gratuity system grew out of Prohibition. Barkeeps and restauranteurs needed a way to pay wait- and cook-staff without having them actually on their books, thus giving the owner more ground upon which to claim he was totally not running a speakeasy, should John Law come knocking. So owners adopted a sort of service favor system that had been running among European gentry for a few decades, and, presto-change-o, you’ve got gratuity as we know it now. Strangely enough, without Prohibition, we also wouldn’t really have cocktails, so I suppose that gross overreach of social policing served something in the end.

Now, anyone who has worked for tips will tell you it’s a total craps-shoot. It really is just like gambling. Our tiny caveman brains cannot believe, despite evidence, that making a steady wage is more lucrative in the long run than working for a fluctuating wage. Windfalls are addicting, and a good working soul will weather huge stretches of cheap customers and asshole four-tops, hoping against hope that some spendthrift will toss them a fiver just to pour a beer. I think it’s something bred into us by centuries and millennia of farming and its boom-or-bust nature, but that’s all speculation.

But in the modern world, this problem is compounded by the nature of wages among unskilled workers (not to imply that waiting tables isn’t de facto skilled labor). You ever work retail? Or fast food? Ignore their other issues for a second and consider how frustrating it is to pull your weight and then some, and make the same paltry wage as the jerkoff who is always one misstep from being fired. And the raises you might earn in such a job fail to reflect the day-to-day flux of the workplace.

The gratuity system tries to side-step that, which is why the system will never die. Even in situations were tips are pooled, you at least come away with the sense that you all sank or swam together. Aside from commission-based and artisanal work, gratuity is the only wage system that rewards the worker directly according to their skill and their effort. In fact, you might describe gratuity as the unskilled version of commission-based workers’ pay. Now this of course assumes an environment where all other participants (read: customers) know the rules of gratuity (15-20% for proper service) and participate fairly.

That said, everything in the previous paragraph is a pipe dream. It is the theory of gratuity, which is hardly ever the reality. There are too many self-righteous cheapskates who “don’t believe” in tipping, not to mention the wildly subjective nature of what qualifies as “proper service.” Beyond this, you have to make a trade, and soldier through the slow days on the job, where everyone makes less regardless of effort.

But that theory, in its half-correct form, is what sits at the heart of anyone you’ve ever heard describe the gratuity system by saying “It sucks, but I wouldn’t change it.” If you are an earnest and socially engaging worker, then you prosper; if not, you get shown the door.

Now I do understand that some people see gratuity as exploitative, and I admit that it can be. No one sane wants to live at the mercy of the generosity of others, after all. But you’re an adult. Do some research if it bothers you so much. Patronize establishments that cut gratuity and pay their staff living wages, instead of just stiffing your server at a gratuity-run establishment. I don’t care if you don’t want to pay someone for “just bringing me my food;” don’t seek a service you aren’t willing to pay for. And I guarantee you those places that eschew gratuity will have menu prices about 18% higher than your expected average. Conversely, if you believe in gratuity, don’t give your business to places that run a shady ship. And as always, support your local businesses. The food’s usually better anyhow.

As I see it, this gratuity stuff is only going to become more prevalent and entrenched as the gig economy continues to grow. Uber already pays its people like shit, but you can bet your jeans that when they get regulated, they’ll try, if they can, to weasel into the category of businesses that can underpay their labor force assuming the rest is made up in gratuity. Hell, I wouldn’t be surprised to learn they don’t already do that.

In a way, gratuity promises you the American dream in a way static wages never could. Because it throws the whole to-prosper-is-to-rise aspect right out the window. Not everyone can be management, and not everyone wants to be management; in fact, few of us do, by my reckoning. But all of us want to prosper with direct relation to our labor, whether we possess a specific skill or not.

So, don’t be That Guy, and tip your service workers properly. The best wage system ever devised depends upon it.