No Whining in Pittsburgh

A letter to the editor in today's Post Gazette is ripe for a skewering at Chad Hermann's Radical Middle, so vividly does it illustrate the entitlement culture that permeates the worst of contemporary American society. I really, really hate whining, and this is great big whine:

Tipping reminder

As a server, I'm writing this letter as a means to inform (or remind) the general public of the federal minimum wage standards for tipped employees such as waitresses and bartenders. In Pennsylvania, the law requires a pay of only $2.83 per hour.

Some people may not be aware of that fact or may choose to ignore it. Yes, there is such a thing as bad service. We've all had that experience. But instead of not tipping, speak to the manager so the problem can be corrected for the next patron. And if you can't afford to tip appropriately, maybe you should think twice before dining out.

Economists will tell you that American-style tipping is wildly inefficient. If you really want good service, you should bribe, er, tip your server before the meal begins. That way, you reap the benefits of your own investment, instead of investing in good service that benefits the next customer. Economists will also tell you that European-style tipping, in which the tip is automatically added to the bill and the customer is not expected to add more, is also wildly inefficient, because the server has no incentive to improve the quality of the service. The American system of tipping post-meal is the worst of possible worlds.

Fortunately for all concerned, I'm not an economist.

I'm a teacher. I used to be a lawyer. Around teaching circles, occasionally you will hear a wry joke along the following lines: Teaching would be a great profession if you didn't have to deal with all of these students. Lawyers sometimes say the same thing about clients.

When I was starting out as a lawyer many years ago, I used to hear that joke, and occasionally I would repeat it. And then I stopped, after I heard a partner in my firm repeat a simple, obvious proposition:

It's a service business.

Full stop.

Sure, when you're working hard, what you get paid doesn't always match what you think you deserve, or what makes sense from society's perspective. Teachers are often underpaid and sometimes overpaid. Lawyers are often overpaid and sometimes underpaid -- but other things being equal, the actuarial tables will get them in the end. Students raise hell and underachieve. Clients bitch and moan and won't pay their bills. Add it up: No whining. It's a service business.

Restaurant servers (not to mention all of the other folks who staff restaurants)? Almost certainly underpaid, all of them. And restaurant jobs are hard, and these days, like almost any job, they can be difficult to come by.

But do not blame your customers for their alleged ingratitude when service -- your service -- is lousy. It's a service business. When I eat out, I walk in with a default setting that says I will leave a 20% tip at the end of the meal. For some people, that default is 15%; for others it is lower. That default, whatever it is, is part of an implied bargain: hold up the restaurant's end of the deal -- adequate service, not even spectacular service -- and that default is yours. Keep it all, or share it with your colleagues; that's up to you. Drop the ball, and the deal's off. No whining. It's a service business.

Occasionally I wonder whether Pittsburgh's reputation for mediocrity across a wide range of services is deserved, and whether the entitlement mentality indirectly reflected in that letter has something to do with it. I can't say; maybe Pittsburgh simply reflects a broader national trend. But I can say that I am surprised and impressed as hell when I do receive great service in Pittsburgh, that is, when I see a local shoulder and there is no chip on it.

Take Casbah, for example. It's a very good restaurant, though in my view not a great one. I've eaten there a lot, both lunches and dinners, and the food, while good, is a little uneven. The wine list is excellent, but the main part of the restaurant can get so crowded and noisy that conversations are difficult. Still, the service is a regular delight, and it's a big reason that I keep going back and using it as a main destination for dinners with out of town guests. You want to know how to earn a tip? Have what they're having.


15 Responses to "No Whining in Pittsburgh"

jet said... 8/18/2009 8:33 AM

I recently spent two weeks in Japan where there is NO tipping and experienced two weeks of the best service in restaurants and bars that I've experienced in my entire life.

It seems that paying your employees well and expect the best out of them can, in fact, work in the service industry.

Mike Madison said... 8/18/2009 9:09 AM

Read also this piece from last Fall's NYT on the experiences of a "no tipping allowed" restaurant. It's a controversial approach.

Brianna said... 8/18/2009 1:16 PM

Serious word on this!

Burgher Jon said... 8/18/2009 3:23 PM

So I'm just playing the devils advocate here, because I've never been in food service, but...

Instead of saying the American Tipping System is broken, what if we extend it instead. What if a lawyer who used to bill at $400 bills at $300 and if I'm satisfied with him at the end of the day I tip him the rest and if I'm overwhelmed or underwhelmed I adjust accordingly.

What do you figure is the social institution that keeps this from happening (formal or informal)? Would you be willing to put your legal (or teaching) services up to such a system?

Mike Madison said... 8/18/2009 4:02 PM

Clients do "tip" lawyers and students do "tip" teachers. But only once in a while. And I doubt that many lawyers or teachers would sign on to a system like that, because most lawyers and teachers would expect -- rightly, I guessing -- that most clients and students would *not* tip.

The difference, I suspect, is in the social, cultural and even some physical dimensions of these domains that signal -- or don't signal -- a commitment to play the tipping game. A diner's physical presence in a restaurant -- seated -- signals a commitment to tip. I can imagine equivalent signals emerging in other contexts, but right now I don't see them.

Anonymous said... 8/20/2009 9:45 PM

"A diner's physical presence in a restaurant -- seated -- signals a commitment to tip. "

But that's the issue. I agree that they do signal in that regard. But some of them don't follow through on that. And that sucks.

Imagine if, instead of a contract, law schools paid professors on a "signalling" basis. Some of them thought so much of the signal that they paid, even when the professor sucked. Others refused to pay, even when the professor was brilliant.

Now imagine htat, in this system, one of the professors had the temerity to write a letter to the editor in a law journal, gently nudging the non-payers to, you know... pay.

Would the appropriate response be, "Hey! Stop being a crappy professor! By having you in the classroom, they signalled their willingness to pay! Since they did not pay, you must have offered crappy service!"

That, I think, would be the definition of begging the question.

The issue here is, sure, some waiters offer crappy service. But some don't. And still don;t get tipped. This is what happens when you are forced to operate in a world without contracts,.

Seems to me that it's a poor response to simply say that simply "sitting down" implies that the customers is, in fact, contractually or otherwise bound. No. They are not. Whole hordes of them are free riders.

So are crappy waiters who still collect big tips.

Still, to imply that the current system amounts to an implied contract is wrong.

Mike Madison said... 8/20/2009 10:33 PM

To the extent that Anon has something clear to say, Anon misses the point of the post.

No customer in a restaurant is contractually bound (even by implication) to offer a tip in response to service of any sort. The post doesn't suggest or imply otherwise. The post says that dining in is a signal, not a promise. It's a signal -- to the server -- that the customers are willing to play by the rules of an implied bargain: serve me and I will tip you. It's the signal that matters, not the idea that the implied bargain is some kind of "contract." The signal encourages the server to offer decent service. That signal is important precisely because there is *no* contract that requires the customer to do more than pay for food and drink. How else is the server likely to trust the customer?

But the signal doesn't mean that there's some kind of binding obligation. Trust sometimes leads to disappointment. It's a service business.

From the customer's point of view, if you really want to get precise about it, then consider the situation an option: If the customer gets satisfactory service, then the customer has the option regarding whether to tip. The vast majority of customers calculate this option from a default baseline. Mine is 20%. Tips go down from there; rarely, they go up. Many exercise the option. Some don't.

Why this "begs the question" is a mystery. People who don't tip aren't "free riders"; they're only free riding if you assume that servers are entitled to be tipped, and they're not. It's a service business.

Once upon a time, professors of all types were paid by the lesson by individual students. I don't know whether what we now call "tipping" was part of the system, but I do know that professors organized into universities in part to avoid problems of collecting fees from individual students.

Instead of whining about lousy tips, then, restaurant servers could organize themselves into some kind of institution that would refuse to serve meals to anyone who didn't pay some kind of annual subscription. Sounds silly, I know.

It's a service business.

Anonymous said... 8/20/2009 11:50 PM

"People who don't tip aren't 'free riders'; they're only free riding if you assume that servers are entitled to be tipped, and they're not. It's a service business."

This depends on your definition of "entitled." Legally? No. Of course not. There is no law that requires it. You are correct.

But let's say that your neighbor tells you his 18-year-old son has a grass mowing business. You say, "Alright, what's he charge?"

"I don't know," the neighbor says. "Whatever it's worth to you. Pay him two bucks for gas, and then whatever else you think is right."

This arrangement clearly puts the poor kid in some peril. But bless him, the little sucker comes over and mows the grass. Let's set aside whether or not he does a professional-level job. Maybe he does, maybe he doesn't. Either way, assuming he does at least something right... is he "entitled" to more pay? To something beyond covering his expenses? Essentially, to a tip?

Well, no. He is not. His dad set up the deal, and you are within your rights to stiff the kid.

Is that a cool or admirable thing to do? Of course not.

So maybe the kid should shut up and form a mowers union. And that's true. That would be a worthwhile thing for him to do if he were going to work his whole life in mowing. But he probably won't. Instead, the natural inclination would be to keep mowing as long as he has to, and to groan a little bit when someone someone asserts his rights to not give a tip, even when the mowing is done right.

The question being begged is the idea that someone sitting down in a restaurant somehow signals that he is going to play by the unwritten rules. No. That person does not signal that in any way whatsoever. Anyone who has worked tables at a restaurant knows that. Instead, each waiter watches the door for a series of other, more important signals. How are they dressed? Who are they with? Where are they sitting?

These are all imperfect signals, You can always get surprised one way or another. But generally, after a while, you get good at reading the signals. The real signals. Of which "sitting down" is the least important.

And more broadly, in a discussion of free riders, what role does entitlement EVER play? In the classic case, if I put up a park bench and expect sitters to pay. Very few will. Because... I am not ENTITLED to the money.

The lack of entitlement is what causes the free riders to ride for free. If I were entitled to some fee for the ride, they could not ride for free.

Can you think of a free rider problem in which the ride provider IS entitled to some kind of fee? that would seem to eliminate the problem.

Anonymous said... 8/21/2009 12:02 AM

More succintly, this seems wrong:

"People who don't tip aren't 'free riders'; they're only free riding if you assume that servers are entitled to be tipped, and they're not."

Actually, people who refuse to pay for service for which others are entitled are not "free riders." They are technically thieves. That is, accepting a service and refusing to pay for it, even of the provider is entitled to it, is a crime. It's called theft of service.

Free riding is when you are NOT required to pay. And don't, even though you accepted the service. Simply because you don't have to.

I am pretty sure this is the commonly accepted definition of free riding.

Mike Madison said... 8/21/2009 8:26 AM

I spend enough time with economists and economics to know what I'm talking about. The Wikipedia definition of free riding isn't perfect, but it's an easy and decent place to start:

"In economics, collective bargaining, psychology, and political science, "free riders" are those who consume more than their fair share of a public resource, or shoulder less than a fair share of the costs of its production. Free riding is usually considered to be an economic "problem" only when it leads to the non-production or under-production of a public good (and thus to Pareto inefficiency), or when it leads to the excessive use of a common property resource. The free rider problem is the question of how to limit free riding (or its negative effects) in these situations.

The name "free rider" comes from a common textbook example: someone using public transportation without paying the fare. If too many people do this, the system will not have enough money to operate.

If you're not required to pay, i.e., if the provider of the service is not entitled to payment and the service would be provided anyway, regardless of payment, then failing to pay isn't free riding. It's nothing. If I'm invited to a wedding and fail to bring a gift for the happy couple, I'm not "free riding" if I still drink champagne and dance at the reception, even if what I'm doing is bad form (gifts are welcome and usually expected), because the reception would go on regardless.

And it is equally bad form for the happy couple to publicly complain about my bad manners, even if they don't want me as a friend any longer.

The reason that the "free riding" problem doesn't apply to tipping is that "good restaurant service" isn't really a public good, just like a wedding reception isn't a public good. It's a private good, meaning that it is provided (or not) on terms understood between the restaurant, the server, and the customer. There is no collective action problem that needs to be solved in order to ensure that the good is provided

This is not an indisputable point; some academics conclude that it is a public good. I think that this is wrong, because of the ease with which consumers can be charged directly and *required* to pay for the cost of service. That's the European "service charge" model. As in Europe, the relevant parties could treat the arrangement as part of a contract that legally binds the customer to pay for service. Here, they don't. They treat it (both the service and the tip) as a gift.

One might say that *quality* service is the public good; service charges don't adequately motivate servers to perform *well.* That strikes me as precisely backwards; why would any restaurant owner or manager employ anyone who fails to perform adequately in the first place, sans tips?

In other words, the puzzle and disappointment of people failing to tip is clearly *not* a puzzle or disappointment associated with "free riding" or "theft"(!). This isn't really an economics puzzle; it's a puzzle of social norms. From the consumer's side, it is the puzzle and disappointment that comes from failure to give gifts which are ordinarily expected (as part of a cultural bargain). From the server's side, it is the puzzle and disappointment of not receiving cash compensation, some of which will be kept tax-free.

My "collectivist" suggestion wasn't really so silly. If servers pool their tips, then the effects of low tippers and no tippers are reduced.

Mike Madison said... 8/21/2009 10:46 PM

The problem, Anon, is that you aren't responding to what I'm actually writing.

On signaling: I'm writing about a tip v. no tip signal; you're responding about what kinds of tips servers learn to expect. I would be stunned to learn that waiters and waiters scrutinize the customers from the get-go, trying to put them in "tip" and "no tip" categories. The reason that sitting in the restaurant is a plausible signal of "tip" is precisely because it helps to solve the commitment and trust problem that the lawnmower example reveals. The kid with the lawnmower has no assurance that he will ever get anything; he isn't receiving any plausible "I will pay you signal."

On free riding, you and I are using the phrase in two very different ways. My way, which I prefer to stick with, tracks the use of the phrase in economics and other social sciences: "free riding" occurs with respect to social transactions involving use of some resource, where the parties to the transaction don't full internalize (i.e., capture and allocate all of the value of) the costs of the use. "Free riding" often occurs because one thing or another prevents the parties from negotiating a deal to allow them to internalize the costs. Transactions costs, often involving collective action, are often the culprit. (You use the phrase "free riding," which is actually a metaphor for this economic phenomenon, in an odd literal sense. But if I don't pay the lawnmowing kid, I'm not a free rider. If I promised in advance to pay the lawnmowing kid, then I've breached a contract; if I didn't promise in advance to pay the lawnmowing kid, then I may not be a nice guy -- but nothing else.)

Is that the case (my definition of free riding) here? Are non-tippers free riding in a meaningful sense. You actually answer that question in your last statement, though apparently you don't realize it. In the real world, free riding problems are often solved (when they need to be solved, which is not always the case) by creating or imposing an entitlement to a fee. In other words, there is no free riding problem here at all, because there is no barrier to imposing a service fee on customers.

The same point, put differently, is that true free riding problems are *always* about the presence or absence of entitlements (and in that sentence, I mean "entitlements" both in its casual "Peter owes Paul" sense and in at least one of its more technical legal senses).

Anonymous said... 8/21/2009 11:23 PM

"In other words, there is no free riding problem here at all, because there is no barrier to imposing a service fee on customers."

So the owner of the restaurant, who benefits from the free riding insofar as he can charge $11 for a prime rib instead of $14 because he allows people to CHOOSE whether or not to pay the extra money, is in charge of pricing.

So for him, you are correct. There is nor free riding problem. There is no barrier to him imposing a service fee.

Can you explain to me how the waiter, who does not own the restaurant and does not set pricing policy, can "easily impose a service fee on customers"?

You seem to conflate the waiter with the owner.

These are actually not the same people.

Imposing a service fee on customers is actually a HUGE problem for anyone who waits tables in the United States.

Or maybe not. Perhaps you can expalin to me how, when I was slinging drinks and fries at the local watering hole, how I might have easily overcome owner and customer resistance to my plan to simply impose an extra charge on everyone.

Please, please don't tell me I should have formed a union.

Anonymous said... 8/21/2009 11:29 PM

"My 'collectivist' suggestion wasn't really so silly. If servers pool their tips, then the effects of low tippers and no tippers are reduced."

Great news! In that case, we no longer need taxes for national defense! Some people will contribute, others will not! That way, all citizens (customers) will be served (defended) and we will pay for it all!

But wait a minute. What is we call the people who would not actually pay for the national defense? And still get defended?

Oh yeah: free riders.

Similarly, as mentioned by you, the waiters will not know the tippers from non-tippers when they come into the restaurant. As such, they will serve all with equal eagerness. So all customers will benefit.

But some will not pay and still enjoy this benefit.

What do we call such people?

Anonymous said... 8/21/2009 11:48 PM

I mean, here is your own definition:

"'free riders' are those who consume more than their fair share of a public resource, or shoulder less than a fair share of the costs of its production."

So after years and years of social norms, society (and waiters) have come to expect 15 percent for decent service. So the average waiter gives the average customer an effort according to that expected tip. So the average customer gets service according to that expectation, and all the associated benefits of such accrue to him. This is, almost by definition, a public resource. That is, the general public has come to expect 15 percent service because of this social norm. And generally does enjoy that levle of benefit.

Now, can you imagine a way for someone, pursuant to your definition, to enjoy this benefit while "shouldering less than his fair share of the burden"?

Wait. I know. Don't tip!

Yes. People who do not tip, but still enjoy the service of someone expecting that tip, are by your definition of free riding... free riding.

I guess the other element of the definition is that thtere is some danger of this good or service being withheld.

In other words... is there a danger that this system will lead to poor restaurant service?

I don't know. Have you ever had poor restaurant service?

This is why your wedding guest example does not hold. That is a one-off event. People wont get married less because they expect you to drink for free.

But let's say rather than a wedding, we restrict it to "party." REGULAR parties to which the host expects some contribution from guests. A tureen, Two bucks for a keg. A covered dish.

Yes, Dr. Madison, as any frat boy can tell you... refusal to contribute does indeed grate. And does indeed cut into the supply of parties.

Free riding.

And regularly enjoying service from people who expect a 15 percent tip--and regularly refusing that tip while continuting to accept the service--is free riding.

By your own definition.

Mike Madison said... 8/22/2009 6:33 AM

Your refusal to read what I actually write has worn out my patience. This will be the last comment on the subject.

The free riding problem arises with respect to public goods. "National defense" is a classic public good. Table service is not a public good. It is a private good, meaning that it is straightforward and easy for the relevant parties to negotiate compensation for the service. The transaction is between the customer and the restaurant, and it is, in the vast majority of cases, a one-shot deal. (Very few people tip in restaurants because they expect good service next time!) The waiter or waitress is an employee of the restaurant, just like the chef and the busboy and the parking valet. The restaurant can charge the customer whatever the restaurant wants, and the customer can choose to eat there, or not. The restaurant can pay the waiter or waitress whatever the restaurant wants, and the waiter or waitress can choose to work there, or not. If the waiter or waitress does not provide adequate service, tip or no tip, then presumably the restaurant will fire the waiter or waitress.

Is there a transaction between the customer and the server? Sure. In that transaction, tips are gifts. Less generously, they are after-the-fact bribes (the after-the-fact part is what makes them economically inefficient). They are socially acceptable bribes, even expected bribes, expected as part of a social bargain -- and the bribe and the bargain is expected on both sides of the dining table.

If you're a waiter or waitress and you don't like the fact that you work for a restaurant that expects them to be compensated via a voluntary gift-giving system, then find another restaurant to work at (restaurants that charge service fees and prohibit tips -- these things do exist) or find another profession. Back to the original point of the post: If you resent your customers, then you're in the wrong line of work. It's a service business.

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