Australians, collectively at least, have a fair amount of control over the society they want to live in. We can’t control everything – technological limitations, international politics and economic realities, among other factors, limit the type of society we can create. Nevertheless there is much of our society we can determine, if the will is there.
Whether or not we have a culture of tipping for service is surely one of those things.
Australians, more or less, have opted against it, preferring instead higher wages for service-employees. There are many reasons for this. One being that tipping is seen as ‘American’, thus not having a tipping culture is part of our identity as ‘Australians’.
But that aside, what would be the outcome if Australians did decide to adopt a tipping culture? In other words, how would aggregate social welfare change if Australians customarily tipped for service – in much the same fashion as in the US?
On the plus side…
- Cheaper restaurant prices.
- Better service?
- Lower unemployment and possibly more restaurants to choose from (due to lower labour costs)
- Increased opportunities for (good) service employees to earn higher income through tips.
- Freedom to pay according to our perceived value of service.
- Possibly a range of new professions would develop (like bathroom attendants), since they could rely on tips as income. (Although maybe that’s not a good thing.)
On the other hand …
- Loss of income stability for service-employees.
- Increased gap between high- and low-income earners?
- An additional social expectation of tipping and the pressure that brings to behave ‘correctly’ even though the rules are unclear.
- Overall loss of certainty when buying products with any sort of service attached (“Do I tip here, or not?”).
- We would have to constantly assess those we deal with and publically announce our evaluations in the form for tips.
Something that cannot really be listed, as either a ‘pro’ or ‘con’, is how tipping changes the dynamics between the customer and service-employee. Under a ‘tipping system’ the service-employee is accountable to the customer, whereas under a ‘non tipping-system’ the service-employee is accountable to their employer. This shift in accountability may have all sorts of consequences that are hard to categorise as positive or negative.
The choice is ours and we are making it everyday. Even by not making a decision and maintaining the status quo we are still making a decision, which in this case is to have a non-tipping culture.
Either way, we should be conscious of the decision we make.