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TAAH Flashback (2003): Blacks Tip Less Than Whites
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I occasionally use Journalscape's JournalScan feature to see if people have commented on posts older than the past week or so. Today someone posted a comment on a 2003 entry about a study mentioned on NPR looking at tipping trends based on race.

Sometimes I wonder how people find these things, because I was unable to find the entry through Google using combinations of words from the title of the entry and/or the blog.

Anyway, sometimes it's interesting to go back and look at old entries. I think it's a pretty interesting issue, and it's also interesting to see the 41 comments piled up over time. Some of them are obviously fakes, and others are inflammatory (though I don't believe in moderating comments, except in the case of advertising).

I think there is something to the argument that it's a causal cycle: If waiters expect Blacks to tips less, they'll provide worse service, leading to lower tips. But that doesn't explain the whole picture, since data on the quality of service often showed high ratings for service still combined with lower tips. And it seems that whatever the root causes, the effects are a continuing source of racial bitterness.

I've always thought that tip-based systems, if communicated clearly to consumers, had some nice advantages. Specifically, it provided low-income service workers some level of control over their income (rather than the flat-rate minimum wage worker who has no incentive to provide anything other than baseline service). In other words, tipping should allow for a positive correlation between better service and higher wages. Sounds like a win-win, right? This assumes that everyone in the system collectively agrees to the terms, and it seems clear that's not the case. And it seems like the tipping system actually has created a dynamic which seems to be generating racial animosity.

This makes me think that it is probably a good idea to do away with tipping systems. Charge flat rates for services like valet parking, and simply roll an additional 15% into the price of food. So wouldn't that kill incentives for service providers to do well? Personally I've have always thought that profit-sharing should be in widespread use. Basically, everyone in the business gets paid a flat wage (from the dishwasher to the manager), but everyone gets a bonus based on the profits of that particular location. That would give everyone an incentive to do their jobs better, and to urge their fellow employees to perform better, and it would lend a sense of combined purpose to an otherwise crappy job.

It would also solve the problem of differential tipping. I'm not sure if any retail or fast food chains use such a system, but I think it would work well.

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