Off to Al Vente next week, in the former Marimar space. Wine style is Italian. Great food, interesting wines and discussion at Muffy's. Thanks to Warren and Ruth. Here's an interesting editorial on the economics and sociology of tipping. August 10, 2005 Tipped Off By STEVEN A. SHAW WHEN Thomas Keller, one of America's foremost chefs, announced that on Sept. 1 he would abolish the practice of tipping at Per Se, his luxury restaurant in New York City, and replace it with a European-style service charge, I knew three groups would be opposed: customers, servers and restaurateurs. These three constituencies are all committed tipping - as they quickly made clear on Web sites. To oppose tipping, it seems, is to be anticapitalist, and maybe even a little French. But Mr. Keller is right to move away from tipping - and it's worth exploring why just about everyone else in the restaurant world is wrong to stick with the practice. Customers believe in tipping because they think it makes economic sense. "Waiters know that they won't get paid if they don't do a good job," is how most advocates of the system (meaning most everybody in America) would put it. To be sure, this is a seductive, apparently rational statement about economic theory, but it appears to have little applicability to the real world of restaurants. Michael Lynn, an associate professor of consumer behavior and marketing at Cornell's School of Hotel Administration, has conducted dozens of studies of tipping and has concluded that consumers' assessments of the quality of service correlate weakly to the amount they tip. Rather, customers are likely to tip more in response to servers touching them lightly and crouching next to the table to make conversation than to how often their water glass is refilled - in other words, customers tip more when they like the server, not when the service is good. (Mr. Lynn's studies also indicate that male customers increase their tips for female servers while female customers increase their tips for male servers.) What's more, consumers seem to forget that the tip increases as the bill increases. Thus, the tipping system is an open invitation to what restaurant professionals call "upselling": every bottle of imported water, every espresso and every cocktail is extra money in the server's pocket. Aggressive upselling and hustling for tips are often rewarded while low-key, quality service often goes unrecognized. In addition, the practice of tip pooling, which is the norm in fine-dining restaurants and is becoming more common in every kind of restaurant above the level of a greasy spoon, has gutted whatever effect voting with your tip might have had on an individual waiter. In a perverse outcome, you are punishing the good waiters in the restaurant by not tipping the bad one. Indeed, there appears to be little connection between tipping and good service. The best service in the Western world is at the Michelin three-star restaurants of Europe, where a service charge replaces tipping. As a customer, it's certainly pleasant to dine in France, where the menu prices are "service compris," representing actual totals, including the price of food, taxes and service. Tipping is hardly the essence of capitalism. Actually, it would seem to have little to do with capitalism at all: it is - supply and demand be damned - a gift, a gratuity decided on after the fact. Waiters and waitresses also believe it is their right to be tipped. A tip, while a gift, is a strange sort of gift in that it is a big part of the server's salary. In most states, servers don't even get paid minimum wage by their employers - there is an exemption (called a "credit") for tipped employees that allows restaurants to pay them just a token couple of dollars an hour (as low as $1.59 per hour in Kansas and $3.85 per hour in New York City). They are instead largely paid by tips, to the tune of $26 billion per year. When you talk to servers, you'll find that most believe they make more money under the tipping system than they would as salaried employees. And that's probably true, strictly speaking. The tipping system makes waiters into something akin to independent contractors. And in most any business the hourly wage of a contractor is higher than that of an employee. Yet in most businesses, people choose to be employees. That is because those who wish to guarantee their long-term financial security sacrifice a little bit of quick cash for longer-term benefits like health insurance, retirement plans and vacation pay. But, of course, most servers see themselves as transient employees - waiting tables before moving on to bigger and better things. Still, this may not always be the case. The large number of waiters I see in their 40's, 50's and 60's put the theory in doubt. While kitchen workers trade low wages and no tips for a future in the business - the opportunity to rise in rank, to one day run a kitchen - what calculation do waiters and waitresses make? Under the tipping system, it seems, they're trading a little extra now for the promise of nothing later. With his announcement, Mr. Keller has sent a signal to his culinary colleagues that there just might be a better way. For their part, restaurateurs believe it is their right to have consumers pay servers, so they don't have to pay their employees a living wage. They prefer the current system because it allows them to have a team of pseudo-contractors rather than real employees. But that too is shortsighted. Over time, as in any service-oriented business, waiters loyal to the restaurant will perform better and make customers happier than waiters loyal only to themselves. In this, the world's most generous nation of tippers, most restaurants don't even offer service as good as at the average McDonald's. While it lacks style, service at McDonald's is far more reliable than the service at the average upper-middle-market restaurant. This is not because the employees of McDonald's are brilliant at their jobs - it's because they are well-trained and subject to rigorous supervision. And come to think of it, at McDonald's there is no tipping. Steven A. Shaw is the author of the forthcoming, "Turning the Tables: Restaurants From the Inside Out." -- ------------------------------ * * Dr. James Lee Ellingson, Adjunct Professor jellings(a)me.umn.edu * * University of Minnesota, tel: 651/645-0753 fax 651 XXX XXXX * * Great Lakes Brewing News, 1569 Laurel Ave., St. Paul, MN 55104 *