Last night my wife and I had a video call with my brother. As usual, the topics of our conversation drifted around various subjects; how his new house is going, how we’re going, what we’ve been up to and so on. And of course, it also drifted onto Australian politics.
He wanted to know my thoughts on the latest ruling by the Fair Work Commission on reducing Sunday penalty rates closer to Saturday rates. We discussed the background a little, and how the news had spread like wildfire across social media. It’s clear this is going to be a big political issue, regardless of the detail of who set up the commission in the first place (Labor) and who instigated the inquiry (the Coalition played their part by referring it to the Productivity Commission, whose analysis was used by FWC).
Overall we agreed that it was pretty disappointing, but then conversation turned to what we, by which he meant “Australia”, should do about it. Around the same time, the three of us agreed that the idea of “Australian Hospitality Service” wasn’t all that crash hot.
He suggested bringing in Tipping, just like the United States.
And I got mad.
Like, really mad.
Neither my wife nor him were expecting it either, and that much was clear in their immediate reaction. So I thought I’d explain why.
First, a crash course. Occupations that largely base their remuneration structure (the amount the worker takes home) on tips are mostly based on hospitality. Usually some form of service job, either food (think a diner, cafe or restaurant), or working in a hotel. The income the worker actually makes consists of a base wage, paid by the owner of the establishment, and an amount provided as a gratuity, by whichever customers came in that day. The theory goes that if part of a worker’s income relies on the customer being happy enough to provide a tip, that worker will do whatever they can to make them happy.
This is the logic that justifies the continued existence of the tipping system. The business pays a base wage, sometimes as low as $4 an hour, and the customer’s tips make up the rest.
This is all well and good, but just like any theory related to social dynamics, it has deep flaws.
For a start, the amount paid in tips is never, ever guaranteed. Most of the time the amount the customer pays on top of the asking price of the meal is a suggested amount, and the amount changes depending on the context, such as the type of establishment, or the region, or even the country. Tipping culture still exists in a lot of European countries, just like in the United States, and the suggested amount always changes depending on context, and for people who arrive from places that do not have tipping culture it can come as a shock to have to remember every time to add 10%, or 15% or even 25% to your order as a standard tip.
The problem here is that the control over the actual amount rests entirely with the customer. Have you ever had a bad day and just wanted to take it out on the next person you see? Ever turned up somewhere with only enough money for a coffee but no tip?
Are you offended by what they are wearing? Are you just a dickhead?
More importantly, do you believe the prices charged are fair? What do you base this on?
Any of these factors can enter into your final calculation as to what to offer as a tip, and they regularly do. People are fickle, they have emotions and the idea of being granted permission to pay less inevitably results in them doing so.
To complicate this, the amount the wait staff earns also depends entirely on how many customers come in that day, and often this is entirely within the power of the business owner to influence. If the owner is shitty at marketing, or the food is shitty, or they just carry a bad reputation, the owner is protected substantially by paying such a low amount in base labour costs that they can get away with being crap for a long, long time.
Tipping as a culture in the United States in particular also has an insidious history. Throughout the history of the US, service jobs were primarily performed by immigrants and non-white workers. Tipping became a way to ensure those workers remained polite and went out of their way to please their customers, who were usually wealthy (and white) enough to decide whether the worker went home with next to nothing, or with a few extra Benjamins in their pocket.
Today’s America though features a substantially different demographic performing those jobs. The service industry is one of the largest growing industries in the country as primary and secondary industries slowly mechanise, automate and relocate offshore. As a result, there is a growing diversity within the services from people who never thought they would be there, and these people enter an industry driven by a long need to treat them as second class citizens serving their social betters.
In Australia, the spread of tipping as a form of remuneration has been largely restrained to places like five star hotels and restaurants, basically anywhere with a significant tourist component of its customer base. This is for a number of reasons, one of which is that the base pay of all hospitality workers is fixed, by government legislation and the Award system, at a high enough rate to allow the worker to make a decent enough living without having to rely on tips. Australian hospitality workers can arrive at their place of business, check in, and be safe in the knowledge that if they do their job they will be guaranteed to take home what they expected to.
But this situation is only sustained because of the award system being designed to ensure those workers are paid enough of a base rate to live on. If that rate does not keep up with the cost of living over time, those workers will need something extra to supplement their income in order to live. A second job maybe. Maybe tips from customers.
The only downside to the idea of receiving tips is that tipping culture is driven by two factors. First, effective advocating of providing a tip by the business. “Suggested tip: 10%” for example. I have recently seen EFTPOS machines at cafes that include a step in the process of “Add Tip: Y/N”, to which I usually press “No”. Not because I am a piece of shit (the jury is out on that) but because of the second factor, which is the culture itself.
Culture is not very well definable, but one aspect is the assumptions and unwritten rules that a group of people share about something. In this case, the vast majority of Australians do not share the assumption that you must tip, but more importantly that the worker relies on your tips to survive.
This is not because we are collectively pieces of shit, but because we know through many decades of protected worker rights and entitlements that most employees we come into direct contact with will hopefully be paid enough in their base wage to be able to live on without us supplementing it purely through our good graces.
But somebody from another culture will protest that this leads to poor service from the employee, because they have no incentive to provide good service in their pay. Of course it can lead to poor service. But it doesn’t always.
The alternative to providing incentives for good service through tips is to give incentives through good business management by the owner. Forcing the wait staff to beg for tips is a copout by the owner for not managing their business well enough to pay their workers a living wage. Instead, the owner can do things like bringing more customers to their business through better marketing. They can make the operation more efficient. They also have the power to fire workers for not doing their job of making the customer happy. These are all well within the power of the owner, but they are harder to do.
So what if one or two businesses started regularly pandering for tips, instead of just paying workers enough to not have to?
Funnily enough, there are answers to this from a seemingly unrelated movement from the 20th century. In Australia, for most of the 20th century the typical family household had one income, usually from the father. There were many types of families then, as there are now, but the income situation versus living expenses at that time meant that a family with children could buy a house on one income and pay for a modest life on the typical wage of one person.
Around the second half of the 20th century more women entered the workforce. Part of this was a changing of the culture, relaxing the idea that the woman’s place was in the home, but another part was economics. If a family could have a good life with one income, imagine the life they could have with two! The concept of “getting ahead” was well and truly on the march, but not many ever stopped to think about what exactly a family was “getting ahead” of.
None of this detracts from the importance of allowing women the dignity and grace of being able to earn money for themselves, just like it shouldn’t detract from anybody those rights. The overall effect on the economy though was zero sum.
As more women entered the workforce as part of a dual income home, it became more important for homes to have two incomes in order to afford a modern, balanced and comfortable life. Over time, that tendency has morphed into the necessary, to the point that its very challenging for most people in Australia to live anything more than a modest life without the support from a partner earning alongside them.
Ask any single parent how they cope. Ask a “millennial” how they feel about being forced to houseshare, often with somebody they don’t like. Ask a single woman if she likes being forced to choose between finding some drongo with an income or living somewhere crap.
This happens because the march of economics can usually only be channeled through institutional, often government mechanisms. Taxation. Income controls. Contract law. Market and competition regulations.
And it is often that the culture follows these economics and adapts to them. “This is normal”, says the person trying to “get ahead” of everybody else, who are trying to “get ahead” of them.
Digression aside, back to tipping.
If tipping is the solution to shitty customer service and an increasingly shitty minimum wage, then soon enough every food and service business will come under more pressure to push their customers to tip. This pressure then manifests in a further easing of the award wage, because why would we need a higher award wage when people are “happy” to tip?
Then the suggested tip percentage goes up. And the award goes down. Not necessarily down in monetary terms, but just not rising fast enough to meet the cost of living.
But if we allow tipping to replace the award as the origin of a worker’s income, the smile they plaster on their face for a 10 hour shift may only increase the chance of them earning enough to live on, not guarantee it. The only thing that guarantees it is if the business is magnanimous to do so, and many aren’t, or they are forced to do so against a willing institution acting in the interests of the worker. Usually, in the Australian context, this is the government.
There are fringes of Western society who believe a woman’s place is in the home, but I am not one of them. Their place is wherever they want to be, just like everybody else. But the economic progression in Australia largely bypasses that want by creating a situation where people are almost forced into situations they may not like just so they can live a comfortable life that used to be more easily obtained.
Allowing tipping to rear its insidious head in Australia as a result of shitty workplace relations decisions just because we are frustrated with crappy business management will just lead more people down the path of bad choices for how they live the one life they have available to them.
As a postscript, I am not one to crowd the airwaves with this lengthy an explanation, so I mostly summarised this for by brother and my wife. The reason why is because over my long interactions with The Internet I have learned that the concept of tipping is a fantastic way to get into arguments with people that never fucking end.
I said as much to them and they kind of understood. The length of this post is testament to why.