Blog 36 Tipping Point

Blog 36  Tipping Point

The practice of "tipping", or to use its more grandiloquent format, leaving a "gratuity", is it worth a blog comment? Well, you judge.

In Iceland (of recent soccer fame. Note they spell it "Island"), and in Australia and New Zealand I have encountered a resistance to tipping. An Australian friend put it to me this way. "Employers ought to be paying a decent regular wage. Tipping encourages them to pay lower wages.

In North America, however, some of the hotel chains, when quoting for a conference or wedding reception will include the phrase, ("Gratuity included," or even "15% gratuity included.")

I have two questions about that. First, what is the intended message 
in that little tag?
   "You won't have to worry about how much to tip."
   Or "You won't have to worry that you will face hidden costs."
   Or "You don't have to make a donation of satisfaction to our staff. We take care of everything for you"?
   Or all of the above?

Second question. Does all (or any) of that 15% go to the employees who perform the actual customer service? There would certainly be a corporate cost to calculating and handing out the appropriate tip to each employee. So does the employer levy a "handling fee"? In a well-run company the chief accountant could easily calculate the approximate cost of that "service to their employees". 
But then there is the less measurable question: does the employer decide what is the "appropriate" amount to be handed on to each employee?

Why do I not like the answers to these questions?

What does it matter how the employees are paid - all salary, or a mix of salary and tips, or all tips? I hear a company CFO saying, "It's the bottom line that counts for the employee. So what's your beef?"

Well, let me change disciplines and point to another factor at work here, a factor which would be hard to capture with econometrics.

Tipping has been, and still is, 
                        a mark of class distinction.

Tipping says, I am richer. (and therefore better), than you. Or in a more modern phrase, "It sucks to be you." That message is conveyed in the act of tipping, no matter how philanthropic the intent of the tipper. ("Philanthropic," by the way, is a Greek-based word meaning something like "love of one's fellow man.")

So, to history. Many of the first English settlers in New Zealand and, especially, in Australia, had good reason to be resent class distinctions. English prison sentences supplied the first immigrant of many Australian families. Some at least of the new New Zealanders must have risked the long sea voyage and the hazards of their faraway destination because they wanted to escape being in the "sucks to be you" class in England. 

These were people who knew what it was to be a member of the underclass in a rigidly stratified society. So their new home was to be a different kind of country. It was not by chance that Australia is credited with the invention of the secret ballot. Note, too, that in an Australian election, failure to vote has been illegal and carries a penalty.

And what about Iceland? That country got its independence in 1944. But it had been a part of the Kingdom of Denmark for a century, during the time when European colonialism operated on the principle that "Colonies exist to enrich the motherland." 
Since independence, its small population has developed an extremely democratic society. Tipping - sign of class distinction -  seems to have had no part in it.

Let me finish with a little anecdote from R. L. Stevenson's novel, Kidnapped. I summarize from memory:

A Scottish lord, who was without two shillings to spare was honoured for his military service by an audience with the King of England. The King also gave him a little bag of gold coins. As he left the palace the Scot threw the bag of money to the doorman, and strode on, head high. Pride? Yes. Or self-respect? 
So here's a question for you, dear readers. How is the Scottish lord's act relevant to our topic of tipping?