This appeared in the Wall Street Journal. My comments to follow. :o)
The Point of Tipping
By ERIC FELTEN
February 29, 2008; Page W11
Starbucks' chairman and CEO, Howard Schultz, has embarked on an aggressive campaign to restore the company's luster after various missteps, such as selling glorified Egg McMuffins (bad) and hawking CDs by Kenny G (worse). Stores nationwide were shut down for a few hours Tuesday so that baristas could be retrained to work the espresso machines correctly. But if Mr. Schultz is eager to improve the Starbucks experience, there's a simple place he could start: Lose the tip jars.
During the second half of the 20th century, the practice of tipping largely retreated from American life. The earliest of tipped workers -- railroad porters -- gave way to flight attendants (the first of whom were registered nurses, whose station was deemed above gratuities). Gone are telegrams, the receipt of which required a tip. Men stopped getting shaved at barbershops -- where one stiffed the barber at one's peril. In June 1903, an unlucky New York streetcar conductor named John Shanno failed to tip his barber, Joseph Ferlanto. "I'll teach you not to forget to tip," Ferlanto screamed, and went all Sweeney Todd on him.
But after decades in which tipping was reserved almost exclusively for waiters, waitresses, hairdressers, cabdrivers and bellhops, the practice has begun to expand again. Typical is a sandwich shop in my neighborhood: Pay with a credit card and the signature slip urges the addition of a gratuity, all for a sack handed over a counter. This new expansion of everyday tipping has been driven by the near-ubiquitous tip jar, a phenomenon for which Starbucks bears no little responsibility, having brought the practice to every corner of the country.
For Starbucks' CEO, getting and giving tips are matters of significant self-regard. In his memoir, "Pour Your Heart Into It," Mr. Schultz recalls the degradations of his youthful days waiting tables in the Catskills. "I remember how terribly rude some of the guests were to me," Mr. Schultz writes. "They would be brusque and demanding, and I'd run around and do my best to please them, and when they departed, they would leave only a meager tip." Mr. Schultz promised himself, were he to get rich: "I'm always going to be a big tipper."
One of Henry James's favorite ways to illustrate the naïveté and social insecurity of newly rich Americans in Europe was to show them lavishing excessive tips on everyone in sight. But such extravagance can also be a sign of an unpleasantly aristocratic impulse. The grand tip reached its modern zenith in Frank Sinatra, whose entourage had pockets full of neatly folded 50s and hundreds. At a signal from the Chairman, his hangers-on would "duke" -- Sinatra's lordly slang for his largess -- the lucky waiters, hat-check girls, doormen and anyone else nearby.
When tipping first caught on in the U.S., late in the 19th century, it was the old-world, aristocratic overtones of the practice that drew the most ire. An 1897 editorial in the New York Times declared tipping to be the "vilest of imported vices." The paper lamented not only that "we have men among us servile enough to accept their earnings in this form" but that others were willing "to reward the servility." Joining the chorus against "flunkyism," the Washington Post denounced tipping as "one of the most insidious and one of the most malignant evils" of modern life. Tipping was seen to foster a lord-and-vassal relationship that the prouder professions resisted. Well into the 1910s many bartenders refused gratuities as an insult to their status.
Opposed to vassalage and servility (except to the state, that is), communists have often targeted tipping. When George Orwell arrived in Barcelona in 1936 to fight in Spain's civil war, "almost my first experience was receiving a lecture from an hotel manager for trying to tip a lift-boy." In fact, one of the best arguments to be found in favor of tipping is that Fidel Castro tried to eradicate it in Cuba.
In America, receiving tips long ago lost any stigma; indeed, the "partners" at Starbucks regard their gratuities as an acknowledgment that they are more worthy than their counterparts at McDonalds. But making one's employees dependent on the kindness of strangers is not without cost. Jim Romenesko, known for his media Web site, also runs the popular Starbucksgossip.com, where baristas and customers post comments and questions about the chain. As Mr. Romenesko has noted, the most heated, vitriolic discussions are those on tipping. Most of the postings are by levelheaded employees who make it clear that they deliver good service tips or no. But there is no shortage of workers angry at the "cheap bastards" who risk getting secretly "decaffed" if they don't tip. One barista reminds customers: "I control your daily dose of crack!"
If the tip jar encourages staff animosity, it also makes many customers uncomfortable. On the Starbucksgossip site, plenty of coffee-drinkers echo Mark Twain's complaint about tipping: "We pay that tax knowing it to be unjust and an extortion; yet we go away with a pain at the heart if we think we have been stingy with the poor fellows."
We Americans see ourselves as generous -- we each want to tip a bit more than the average guy. Thus the actual average creeps ever higher. Not long ago, an 18% restaurant tip was a tad better than the 15% that was expected. Now I don't know anyone who tips less than 20%. Soon we'll feel the need to show our generosity by leaving 25% of the tab.
To resist the custom is to be radically antisocial, like "Mr. Pink," the crook played by Steve Buscemi in "Reservoir Dogs." He doesn't tip "because society says I gotta tip." When a fellow hoodlum avers that waitresses are underpaid, Mr. Pink answers: "She don't make enough money, she can quit."
Generous? No. But economically sound. It's not that we tip waiters because they are paid so little; they are paid so little because they can expect to make up the difference in tips. Starbucks is known for paying relatively well and providing respectable benefits. Yet, without the tip-jar take, the company would have to raise its wages commensurately to maintain the same caliber of employees. Perhaps prices would rise too, but I suspect many would be happy to have the full, unambiguous cost of the transaction up on the board. As things stand, the tip jar subsidizes the company's payroll costs. So when you toss a dollar into the cup, you're really making a donation to Starbucks -- and I can think of needier beneficiaries.
To Mr. Felten, I reply:
Imagine your surprise when, after working your first few months at Starbucks, you receive your W2 form from your illustrious employer stating that your yearly earnings are not merely the number of hours your worked times your hourly wage, but includes an additional percentage of your wage calculated as what you "should have earned" in tips. Did anyone keep track of the errant dollar bills that made it into your jar?
From experience, the answer is no. At my illustrious place of employment (which is NOT Starbucks) we lack the capability to process tips on credit cards. It's cash only, and we split them between the two employees at the end of the shift. But contrary to my initial belief, tips are not "free money." I get taxed on them, even if curmudgeons like Felten fail to pay me. In addition, the state of Texas allows my hourly wage to dip below the minimum because I should be earning tips. Is it any wonder that workers at counter-order food service establishments push for your spare change?
However, I couldn't agree more that the practice of tipping is generally ridiculous. In a controlled experiment, it was discovered that the only reliable way to increase tips is to add "phantom dollars" to the tip jar from one's own pocket, sending a subconscious message to customers that "everybody's doing it." It doesn't matter how tasty your latte is, how bright your smile is, or how much bosom you're willing to expose. Disappointing, considering that tipping is supposed to promote and reward quality service and product, especially at un-Starbucks-like coffee bars with manual espresso machines, where the skill of the barista determines the outcome of the product from start to finish.
In conclusion:
Refuse to tip me if I am rude.
Refuse to tip me if I make your drink poorly.
If everything's to your satisfaction, please tip, because Uncle Sam will take the value of your spare change from me even if you fail to plunk it in the jar.