Why The U.S. Won’t Do Away With Tipping

It’s no secret that we’re tipping like never before - everywhere and for everything. While it can certainly be frustrating, there’s a greater issue at hand: There are 5.5 million tipped workers in the United States and out of all 50 states, 43 have a lower minimum wage for these workers than for non-tipped hourly workers. Many states adhere to the federal minimum wage for tipped workers, which has remained at $2.13 for more than three decades. That means these workers rely on tips to make ends meet. In 2022, more than one million workers made the federal minimum wage of $7.25/hour or less. And with tablets at every establishment and more workers outside of just tipped workers asking for tips, servers and bartenders are bearing the brunt. In the second quarter of 2023, tipping at full-service restaurants fell to the lowest level since the start of the pandemic. Watch the video above to learn more.

Chapters:
1:50 Who relies on tips
5:47 Challenges
8:59 Hospitality included
14:22 The debate

Produced, Shot and Edited by: Emily Lorsch
Edited by: Darren Geeter
Senior Managing Producer: Tala Hadavi
Animation: Jason Reginato
Camera by: Jeff Bush
Additional Footage: Getty Images

About CNBC: From 'Wall Street' to 'Main Street' to award winning original documentaries and Reality TV series, CNBC has you covered. Experience special sneak peeks of your favorite shows, exclusive video and more.

Connect with CNBC News Online

#CNBC

Why The U.S. Won’t Do Away With Tipping

[mydogisbailey]

As a consumer, I believe that any restaurant that cannot afford to pay their employees proper minimum wage deserve to shut down. Plain and simple

[TheBlawdfire]

How does this video not once mention that the entire rest of the world manages to pay servers non-tipped wages with zero drama? The businessowners saying they "can't afford to pay" are either lying or never had a viable business model in the first place

[aaronoutdoors]

Kinda funny how restaurants raise thier prices but as soon as you ask them to pay a decent wage it’s “poor little unprofitable me, can’t afford it, your food will be super expensive”

[kevine]

I will tip you if you give me extra good service but if all you’re gonna do is drop off my food and pour my drink, then as far as I’m concerned, you’re just doing your job

[TC-cdsm]

There is a popular ramen chain in Japan, Ichiran ramen, that has three restaurants in the NYC area. They do business exactly the way they do business in Japan: no tipping. They make it very clear as you enter the restaurant and at the checkout, they are NOT a tipping establishment. They adjust the pricing accordingly on the menu and when the bill is paid at the front, you pay what you owe, NO tip.

This is how restaurants in the USA should handle it. No need to tip, just adjust your pricing.

[TheBourbonWrench]

Just came back from a trip to Italy. An item on the menu would say “$25.” I would get the check and it would be exactly $25. No taxes, no tip.

I even tried to tip a bartender for bringing a bottle of wine to our rooftop patio and he downright refused. He told me “this is what I am paid to do.”

Tipping is ridiculous. People should be paid for the work they do by their employers; not from the “kindness of customers hearts.” If for some reason you go above and beyond the line of duty serving food, then by all means leave a tip. But their livelihoods shouldn’t be based on some sort of expectation.

[AliColak]

I’ve worked as a server before. I feel tipping just encourages businesses to cut corners on salaries. Tips should be a bonus not a means of how you make your living

[HotRodDad]

Sorry, if you’re adding a 20% “hospitality” charge, don’t expect a tip, too. THERE. WILL. BE. NO. TIP!

[christiansantiagophotography]

Anyone who has done a fair bit of traveling to other countries will truly appreciate just how antiquated and silly tipping is. It’s a myth that eliminating it would cause drastic price increases. I actually spend less money eating higher quality meals in Europe than I do in America despite their staff making living wages.

[pancake_george]

It’s crazy how they say “we can’t pay our workers because we don’t have money” and they’re just allowed to exist

[craigime]

at this point it's not tipping anymore... they're just guilting you into giving them more money

[lethercreate]

Why has this industry relied on the consumer to pay waitstaff. It’s ridiculous. People should be paid for their work.

[davidsucks]

It's not even having to pay more for a tip that bothers me, it's the displeasure of trying to go out to eat and have a good time and suddenly being responsible for the waiter being able to make a living or not. That should fall on the employer, not me. As a result I avoid eating out, or try to find no-tip establishments. These places might make more money by foregoing tips and raising prices just because it might bring more people in the door

[brianthesnail]

Its ridiculous for a restaurant to claim that they can afford to pay a waiter/waitress but then expect the customer to make up the wages with a tip. It still costs the customer the same as being honest and putting it on the bill to start with.

Its happening more and more in the UK too.

[mikegarrens]

Tipping needs to stop and the employer needs to pay the workers more. If you insist on paying the difference for the employee yourself then that's your problem.

[mattwoodford]

The whole tipping thing in the US just reeks of putting emotional pressure on your customers to cover your staff wages. it's not the customer being mean when they don't tip, it's the employer being mean not paying their staff enough. Feeling bad for not tipping, even when the service/food is poor, is a sign of having been brainwashed. We tip in the UK, but it's not a case of a default percentage added to every bill, if we feel like tipping, we do. If we don't then we don't but usually good food and service leads to a tip and poor food/service does not. Should be the same in the US but I bet there's places with terrible service and terrible food where they feel like the customer has done them an injustice if they don't tip. What's the point of tipping if it's not up to you to decide whether to tip and how much. It is supposed to be a reward for good service/food, not just a given!

[ricnyc]

Tipping is out of control. I like to help people and treat them well, but I think there must be a limit.

[dimplypaprika]

So if I understand this correctly, the sub minimum wage of $2.13 is allowed because it is understood that if the worker does not receive at least $5 in tips per hour then the business will supplement that amount. So basically, your tip actually does not benefit the worker as much as it benefits the business by saving that business from having to pay the worker the extra $5 per hour. Basically your tip is benefitting the business for the first $5/hr, then after that amount is reached, anything extra will benefit the workers? This sounds like a scam to me.

[territryX]

Even Starbucks has tipping options now it’s so annoying

[JRKZT]

ABOLISH TIPPING. Workers should be paid for their work done by the employer. Not paid based on luck.