If you’ve gotten coffee in the last year odds are that the Barista has flipped around a little Ipad selection to tip her
Looking like this
As you can see, every option is well above the normal 15%.
Even if you just got a muffin. Some of the options are just dollars. Like $1 for them handing you a pastry.
Recent studies show that severs expect an average tip of 20-25% now.
We already know that inflation has caused food prices to rise by 10%.
So wages are rising to keep up with inflation, right?
Well, no. Not exactly.
And that’s the problem.
For the majority of workers. Wages have hardly budged since 1980, while inflation has soared. And in the last 2 years alone, inflation has outpaced wages by 30%.
If you were making $100,000/year in 2019. Then that same 1000,000 salary is now only as good as $70,000 was in 2019. Given that your primary expenses are rent, food, and gas.
Since …
So, instead of employers paying service workers more, they pass the burden on to consumers.
You Should Tip More, Problem Solved
Well, not so fast.
The way tipping works is a great way for employers to turn the animosity employees may have about their low wages towards the customer (who is not responsible for their wage) instead of the employer, the wage decider.
If service workers require more tips to compensate for a higher cost of living that their salary does not provide, then the people providing the tips are also working at a job that does not provide the necessary salary to live.
So we have the people who are least capable of compensating workers, tasked with subsidizing their wages.
Confusing isn’t it?
Let’s look at an example:
For Christmas, Amazon implemented a program where consumers could tip their last-mile delivery drives for the holidays. Great idea, right? Well, on the surface yes. It’s a nice way to spread holiday cheer.
When you look into it, it seems that these last-mile delivery drivers are overworked and underpaid. With common reports of drivers having to urinate in bottles just to meet demanding delivery quotas or risk losing their job.
While the executives in the shipping industry take home well over $1m in compensation each year.
To Top it off, Amazon launched the tipping program on the same day that they got sued for ‘tip fraud’ allegations. The lawsuit accuses amazon of stealing tips from its drivers and tricking customers into thinking the tips were going to workers.
Another example of when employers pass their employees salaries onto someone else is Walmart. They are uniquely subsidized by poverty programs.
In fact, according to this study, Walmart and the Walton family make $ 7.8 billion each year due to tax breaks and taxpayer subsidies.
What is included in this?
Assistance for low-wage Walmart employees like
- Food stamps
- subsidized housing
- medicaid
- $70 million each year in economic development subsidies
While these subsidies don’t directly come out of your pockets like tipping does, they do come from your paycheck in the form of taxes. So, believe it or not, your taxes actually go to supporting low-wage Walmart employees, which in turn makes Walmart shareholders wealthier.