120 years from now…

This picture is the best I could do. You try finding a picture that represents the world 120 years from now. Its really hard.

In 1891, two philosophers from the United States wondered about the ethics of tipping.

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At that time, US tipping customs were not like they are today. The American public was familiar with tipping, but it was only practised by some people. Tipping was by no means ‘customary’. Many Americans at the time viewed tipping as a European thing, a hangover from the feudal system and its class rigidities. As such, it was something strongly resisted by many Americans, who viewed themselves as belonging to an ‘egalitarian’ society.

Tipping customs in 1891 USA were very similar to 2011 Australia.

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These two philosophers both agreed that tipping was unethical and ‘un-American’. One said that tipping is so repugnant that both governments and individuals should work actively to stamp out the practice, even though it is only a small part of American society and will probably remain as such. The other said that while it was indeed an evil, it is such an insignificant part of American society that it is not worth worrying about. Either way, the basic attitude of both philosophers was that because it was such an iconic European custom it will never catch on in the US in any serious way.

120 years later, in 2011, tens of billions of dollars are paid in tips every year in the US, which is relied upon by millions of people for their survival.

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Given such an enormous shift in the US and the similarities between 1891 America and 2011 Australia, in terms of tipping customs, I wonder what Australia will look like in 120 years from now? For that matter, what will Australia look like in 50 years?

It seems Australians are more likely to tip than they were a few decades ago. Will this trend continue? Will we eventually forget that tipping is ‘an American’ custom just like the Americans forgot it was once a ‘European’ one?

Public policy, with respect to wages and working conditions, will play a big role in the answers to these questions. The more the labour-market becomes deregulated, the wider the gap between high and low incomes and the more service staff will pressure people for tips. On the other hand, the more minimum wages and conditions are protected, the less likely it is customers will feel any pressure to tip, since the livelihood of service-employees has already been secured.

Things could just stay as they are. But the labour-market is changing, the economy is changing, almost everything is in a constant state of change. It is hard to imagine Australian tipping customs will remain the same.

My prediction: The labour-market will become increasingly deregulated and the minimum wage will fall relative to the average. Minimum-wage employees will see an increasingly wealthy society and will want a piece of it for themselves. Those in the service industry will look to their customers for tips because appealing to their employer for a wage rise is not an option. By ‘look to their customers’ I mean service-employees will use a range of strategies to extract tips and such strategies will work. Increases in tip levels will place downward pressure on the minimum wage (in real terms), which will in turn incite service-employees to seek higher tips, and the cycle will continue.

In sum, I am predicting tipping will become an Australian custom. I’m not saying this is any better or worse than the situation we have today, just different.

Those two philosophers thought American tipping customs (or, rather, lack thereof) wouldn’t change because they assumed things would just stay the same. Its impossible to tell, with any certainty, what Australian tipping customs will be in 120, or 50, years, but I doubt they will look the same as they do today.

Of course, I won’t be here in 120 years. I might not even be here in 50 years to see if I’m right, so I am keen to hear alternative scenarios of Australia’s future.

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