Tipping and not tipping are fraught with problems. New York City restaurateur Danny Meyer started a trend by introducing a no-tipping policy at seven of his 13 restaurants in late 2015. To replace tips, he hiked menu prices up to 25 per cent (according to a March article in Crain's Business News). The idea was to retain employees (especially cooks) by ensuring back-of-the-house staff such as chefs and dishwashers were rewarded in a similar manner to front-of-the-house servers. Line cooks at one Meyer restaurant start at US$14 per hour, while servers get US$13 (minimum wage for tipped workers in NYC is US$7.50). Staff members are also eligible for profit-sharing. But many American restaurant owners, having learned the no-tipping model is harder than it looks, have abandoned the experiment.
The wage issue is one of many places where the US and New Zealand diverge. Our minimum wage, at $15.75, already sits much higher than Massachusetts', which has the highest state minimum wage in the US at US$11 an hour. The US federal minimum sits at US$7.25. Also, Americans are not guaranteed health insurance through their jobs. Thanks to Aotearoa's Government-funded healthcare system, no hospitality worker forfeits medical attention because he or she doesn't work enough hours to qualify for a company plan, or because an employer doesn't offer subsidised health insurance.
Adopting a 15 to 20 per cent tip (customary in the States) requires rethinking how we budget for dining out. Already, Kiwi restaurant prices are stacks higher when compared to prices in the US. A bacon burger and fries at Cobb and Co will set you back $20.90. The same meal at American family-friendly chain Applebee's costs US$11.49. Are you ready to tack another $4 on to the cost of your Cobb burger?
No doubt we deserve better service in New Zealand. I dined with my family at a restaurant in the Mount a couple summers ago, where we waited more than two hours for our meals. By the time our food arrived, the kids were nearly asleep at the table and my stomach had devoured itself. The server tried to make amends by offering free icecream. In the States, such a misstep would likely have been met with a greatly reduced bill. I suspect food and staff costs here are too high for major freebies. Tipping won't change that.
Servers, chefs and other hospitality workers deserve to be rewarded for good service. Perhaps restaurant owners could incentivise staff with revenue-sharing schemes. More sales would equal more dough.
Rolling out a new national tipping standard requires answering questions such as:
Do all staff share tips?
Are tips taxed?
Can restaurants reduce menu prices to account for the extra cost of tips?
How will business owners communicate a tipping policy to international visitors, many of whom don't tip in their home countries?
If Kiwis start tipping, I'll conform. I wouldn't stiff a server who has worked hard to ensure a pleasant dining experience. As it is, our family doesn't eat out often. If tipping becomes status quo, we'll likely stay home more.
Dawn Picken also writes for the Bay of Plenty Times Weekend and tutors at Toi Ohomai. She's a former TV journalist and marketing director who lives in Papamoa with her husband, two school-aged children and a dog named Ally.
