Tipflation: The Economic Crisis No One Is Talking About

Posted on Wednesday, May 8, 2024
by Aaron Flanigan


Customer handed the cash on bill paper. US dollar banknote tips in leather black bill reciept. USA Inflation concept. economy

As the American people continue to suffer from a floundering national economy and mounting financial hardships caused by Biden administration policies, much of the national discourse has understandably focused on factors like inflation, faltering GDP growth, gargantuan federal spending packages, and the left’s Green New Deal agenda.

But as significant as these factors have been in decimating the U.S. economy, one little-discussed yet increasingly unavoidable phenomenon has also been ravaging the pocketbooks of hardworking Americans: the so-called “tipflation” crisis.

Although a modest level of optional tipping has long been a hallmark of American culture—particularly for hard-working wait staff, bellhops, and other customized services like hairdressing and food delivery—in the years since the COVID-19 pandemic, tipping requests have exploded through the U.S. service industry.

Service workers responsible for basic, low-effort tasks who have historically not relied on gratuity, such as drive-thru workers, baristas at coffee shops, and convenience store employees, now commonly prompt customers for tips starting at 20 percent (which used to be considered an exceptional tip) and sometimes rising as high as 90 percent. Even some computerized self-service kiosks at airports, malls, or businesses—which are not operated by humans—prompt customers for tips. Oftentimes, consumers begrudgingly oblige out of guilt.

In some major cities, restaurants have also implemented “service charges” in the wake of the pandemic, often in the range of 20 percent. These charges were initially sold as a substitute for tips, ostensibly helping restaurants ensure that workers were paid an appropriate wage. But in all too many cases, restaurants are now making clear that these service charges are levied in addition to an expected gratuity for the wait staff.

According to a recent study by Talker Research, Americans spend nearly $500 a year tipping more than they would like. As the New York Post recently reported, “the average [survey] respondent reluctantly tips $37.80 a month due to the pressure or awkwardness of the options presented to them”—adding up to a not-so-negligible $453.60 per year.

Additionally, more than a quarter of respondents indicated they felt forced to tip at a higher rate than they otherwise would.

The survey, the Post continues, “found the average respondent tipped more than they’d like to on six occasions (6.3) in the last 30 days alone. And whether it’s the watchful eyes of a barista, the hastily swiveled tablet, or the waiter handing you the card machine, more than half (56 percent) of respondents note that pressure to tip higher is a regular occurrence.”

Furthermore, a recent survey conducted by CouponBirds found that more than 75 percent of American customers believe tipping culture has gone too far. And according to Pew Research, Americans generally oppose suggested tipping amounts and are overwhelmingly opposed to automatic service charges in restaurants.

In today’s economy, it’s no wonder why.

Under the Biden administration, American families have lost thousands of dollars annually on increased energy prices, food costs, mortgage payments, and countless other increased costs stemming from the inflation crisis.

Why, then, should Americans who are already struggling to make ends meet be expected to dish out an additional $500 a year on unnecessary tipping?

Of course, employees in the American service industry—like most other Americans—work hard to earn a living and will justifiably seek to make as much money as they can, including through tips when their industries enable the practice. But, as political reporter Caroline Downey put it, this “new demand that we tip on all sorts of low-effort activities” is not only placing yet another financial burden on already struggling American families, but it is also “eroding meritocracy and diluting what a service actually is.”

American consumers are understandably frustrated that they often can’t leave their homes to buy a cup of coffee, grab lunch at a drive-thru, pick up an ice cream cone for their kids, or take a short Uber drive without being guilted into leaving a 20 to 30 percent tip.

As the fictional Mr. Pink famously says in the 1992 Quentin Tarantino film Reservoir Dogs, “I don’t tip because society says I have to. All right, if someone deserves a tip, if they really put forth an effort, I’ll give them something a little something extra.” He continues: “But this tipping automatically, it’s for the birds. As far as I’m concerned, they’re just doing their job.”

Not so long ago in American history, tipping was seen as nothing more than an optional way to express thanks to a service worker for doing a good job. And by every indication, the American people remain committed to rewarding waiters and other workers who deserve it. But if tipping culture continues to move away from a culture of meritocracy and toward a culture of entitlement, Americans will likely be hesitant to continue providing handouts.

Aaron Flanigan is the pen name of a writer in Washington, D.C.

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