Ben Casselman, a reporter for The New York Times, dives into the tangled web of modern tipping culture. He reveals how tipping has expanded beyond traditional settings, causing confusion and debate, especially during the pandemic. Casselman discusses the stark wage disparities between tipped and non-tipped workers, emphasizing the inequities within the system. He also highlights rising concerns over the sustainability of tip-dependent incomes and touches on political discussions surrounding the future of tipping practices.
Tipping has expanded beyond traditional services due to digital payment systems and pandemic-related changes, creating new social norms around gratuity.
The reliance on tips significantly impacts service workers' income, raising concerns about job security, fair pay, and the future of tipping culture.
Deep dives
The Cultural Shift in Tipping Practices
Tipping has expanded significantly beyond traditional service sectors, infiltrating many areas of everyday transactions where it was previously uncommon. This change can be attributed to the introduction of digital payment systems that prompt customers to tip at coffee shops, fast food establishments, and even self-service machines. The pandemic further accelerated this phenomenon, as many consumers started tipping delivery and takeout workers as a gesture of gratitude for essential services. As a result, tipping has become a social norm across various industries, leading to growing confusion about when and how much to tip.
Economic Implications of Tipping for Workers
Tipping has crucial implications for service workers, as it often constitutes a significant portion of their overall income. Many workers rely on tips to supplement their low hourly wages, with some individuals reporting that tips account for up to 60% of their earnings. The increasing acceptance of tips in new industries has created opportunities for higher earnings, yet it raises concerns regarding job security and fair pay. This dependence on customer generosity can make income levels precarious, especially if consumer habits shift during economic downturns.
Challenges of Moving Away from Tipping
The discussion around eliminating tipping highlights the complexities of adjusting compensation models in the service industry. Efforts by some restaurant owners to abolish tips and raise menu prices instead faced backlash, as customers were resistant to paying higher upfront costs without the option to tip. Additionally, the notion of tips serves an emotional and societal function, allowing customers to feel generous and control their dining experience. The challenges to reforming the tipping culture indicate that, despite the growing criticisms of the system, tipping is likely to remain a part of the service economy for the foreseeable future.
Tipping, once contained to certain corners of the economy, has exploded, creating confusion and angst. Now, it is even becoming an issue in the U.S. presidential campaign.
Ben Casselman, who covers the U.S. economy for The New York Times, cracks open the mystery of this new era of tipping.
Guest: Ben Casselman, a reporter covering the U.S. economy for The New York Times.
For more information on today’s episode, visit nytimes.com/thedaily. Transcripts of each episode will be made available by the next workday.
Unlock full access to New York Times podcasts and explore everything from politics to pop culture. Subscribe today at nytimes.com/podcasts or on Apple Podcasts and Spotify.
Get the Snipd podcast app
Unlock the knowledge in podcasts with the podcast player of the future.
AI-powered podcast player
Listen to all your favourite podcasts with AI-powered features
Discover highlights
Listen to the best highlights from the podcasts you love and dive into the full episode
Save any moment
Hear something you like? Tap your headphones to save it with AI-generated key takeaways
Share & Export
Send highlights to Twitter, WhatsApp or export them to Notion, Readwise & more
AI-powered podcast player
Listen to all your favourite podcasts with AI-powered features
Discover highlights
Listen to the best highlights from the podcasts you love and dive into the full episode