Armchair Expert with Dax Shepard - Flightless Bird: Tipping

Episode Date: August 30, 2022

This week on Flightless Bird, David gets out his wallet and dives into the culture and politics of tipping. Joined by Monica Padman, he sets out to discover why 52% of Americans tip their hairdresser while only 14% always tip their barista. David interviews Mike Lynn, a professor at the Cornell Hotel School, about the social pressures of tipping and why we tip what we tip. David also talks to Saru Jayaraman of “One Fair Wage”, who explains that tipping is a deeply warped version of what Americans brought back from Europe - and that in America tipping has some fairly racist origins - which has led to power imbalances for the 5.5 million Americans that rely on tips. David is encouraged to hear that America is at a tipping point for workers and that there may be a future with a decent minimum wage - as well as tips. Unless you’re one of the 4% of Americans who refuse to tip, ever. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Flightless Bird is brought to you by BetterHelp. I've been doing some therapy lately, figuring out why I'm so avoidant. It's a lot of fun. What have you found out? It's all to do with my childhood. Yeah. Surprise, surprise. I know.

A lot of things are. Thank you for your vulnerability. It's okay. But this is what therapy gives you. Insight. It also gives you the ability to talk about your issues and think about them differently. I mean, it's changed my whole life. Yeah. I like that society, we can talk about this now.

And we worry so much about things like, oh, we've got like a little physical pain. We go to the doctor, worried about all that stuff. Our brain, traditionally, we haven't cared about it. And it controls everything. The whole thing. How we care for our minds affects how we experience our entire lives. It's important to invest time and care into keeping them both healthy there are plenty of ways to support a healthy brain learning a new language or taking power naps but there's also better help online therapy it's awesome because you can use

video phone and live chats you don't have to like go into a place so it's as easy as you can get if you're worried about like traipsing into someone's office and sitting in a chair and having to deal with all that stuff you can just do it from home which is kind of fantastic and it's not a long process you can get matched with a therapist within 48 hours which is very quick it's also more affordable than in-person therapy and therapy can get pretty expensive so when i hear affordable i think great our listeners get 10 off their first month at betterhelp.com slash bird. That's better h-e-l-p dot com slash bird. I'm David Farrier, a New Zealander who ended up accidentally marooned in America, and I want to grasp what makes this country tick. Now in New Zealand, there's one

topic we avoid talking about at any cost, Money. We're mortified at the thought of sharing our financial situation with friends or colleagues, and we'd rather be sent off to clean up nuclear waste than enter any kind of pay negotiation with our employer. So imagine how mortified I was when I was handed a check to pay for a meal and found a small section at the end that talked about a tip. What's a tip? How much are your friends giving? How much are you giving? What if I offend someone? What if I screw up the calculations? What is the calculation? Things have gotten progressively worse since I've been here. I stand in line in a cafe to pay for a coffee, and I'm presented with a giant illuminated screen

requesting a tip. The barista in a line of customers watches on as my finger hovers over the screen. 15% or 25%. I feel like I'm on a game show and if I pick the wrong option the floor will drop out from under me and I'll plunge into a pond of crocodiles where I'll be torn limb from limb. From what I can tell, you can learn a lot about an American from their tipping habits and who they tip. While 52% of Americans always tip their hairdresser, only 14% tip the person who makes their coffee. 4% of Americans refuse to tip anyone. Ever.

Come on, you. Cough up a bucket, cheap bastard. Alright, since you pay for the breakfast, I'll put in. But normally I would never do this. So, prepare to do an in-depth analysis of what the underpaid worker in front of you is worth, as you struggle with a calculator app on your phone, and hope you aren't about to perform social suicide in front of your friends, the entire restaurant, and probably God too, because this is juicy I feel like I'm still coming to terms with tipping Whereas I feel like you have had a lot longer to get your head around it.

Does it ever get any less weird? They don't have it at all in New Zealand. We don't have it. I say that, but it started to creep in in little tiny ways. It has, okay. Mainly, I think the one time I've experienced it more recently, and this was over a year ago now, was on the little machine at the end when you go to pay. It was like it's built in already. Oh, yeah.

It's never a situation of experience where you're handed a check at the table and there's that little bit where you add in the tip. Okay. And so, you know, because we pay employees a fair minimum wage. It's not great, but it's certainly better than the United States. And so this idea that you have to sort of calculate based on the service, who you're with, where you are, what the service is. Yeah. It's scary.

Yes. Okay. So I have a lot of thoughts because our very good friend, Jess, he is a server, acclaimed, well-known, one of the best. He's great. Yeah. He's one of the best. Absolutely. And he takes a lot of pride in it. So he has a lot of thoughts. If you're at a restaurant with him, it can be tough. Oh, if you're out with a service worker, right? And it comes to tip time,

they're really going to be watching what you're doing. They are watching you. Like a hawk. It's scary. He's pretty adamant about cash tipping at a restaurant. scary. He's pretty adamant about cash tipping at a restaurant. So putting like cash on the table. Cash down instead of adding onto your car. Oh my god, I haven't even thought about the difference. Oh, yeah. It's a whole sector of this because they can not claim it necessarily or they just prefer cash. Of course, yeah. Sweep that cash into the pocket.

Now you're saying this, I remember many years ago talking to a friend who was working here in a service industry and the only way they made money, because I don't think they had the right visa, the only way they really made money was via cash tips. Cash. But who carries cash anymore?

Literally. Well, that's a DuckD duck duck goose to an armchair expert episode because we did one on society becoming cashlet like how we're moving towards a cashless society and this is part of it like people don't carry it and i don't so when i'm with jess i always have to be like i don't have any yeah completely and it's also and again you ought to cover this in your episode but it's such a sign of class because so many people, you can't assume everyone has a bank account loaded with money. Some people just operate with cash. And so you take that away and suddenly, anyway, that's a whole other topic.

That's another entire topic. So Jess says you must tip with cash. He really wants you to. It doesn't mean if you don't have cash, you don't tip. You still do. But it's highly preferred to pay in cash and that's only at restaurants i don't know how he feels about other places okay because that's my other panic i feel like i begin to get my head around the restaurant situation and the food

situation but then i was for this show it was in san francisco recording a baseball episode as i left the hotel room i realized oh, I haven't left a thing. And someone's been cleaning my awful mess the whole time. I've left them nothing. Went back in and left them something. Oh, you did. I did, but I always forget. Okay, I'll be on it.

This is going to expose us a little bit, I think. Yeah, I'm worried in advance. I'm thinking very carefully about what I say. Because remember how we got torn apart for the dogs? Oh my god, god forbid you should have a fun conversation about dogs and not adore them at every moment. Exactly. We're setting ourselves up in this one too. But I am the same. At hotels, I am much more lax about tipping. I feel really bad, but I get kind of confused. Circling back to our Disney episode where some people don't tip the guides because they're paying so much money. They assume

that a lot of that money is going to them. Oh, absolutely. Absolutely you do. And with a hotel room, they're not cheap. The 20% rule doesn't come in, obviously, because that's crazy. But how much are you meant to be leaving? Where do you leave it? Yes. It all gets confusing because, of course, for room service, I tip. Anytime there's a line that says tip, I do. I never leave that blank. You're not that 4% of America that just never tips. You're not that, to be clear. I want to be very clear. I pride myself in being a really good tipper. Then there's the doorman as well, or the door woman or the door person. What do you do there? And what about the people that bring your bags up?

I also worry because I hate anyone. I feel so bad if anyone lifts my bag or takes my bags. Yes. But now I'm worried in America, if someone offers to pick up my bags, I'll always say, no, I'll take them. Right. As a nice thing to do. But I'm now worried, are they thinking I'm so cheap I don't want a tip that I'm ripping my bags off them to walk them to the room myself or something?

You know? There's all these weird social things that really mess with my brain. It opens up a lot of questions. We're not the only ones. I went out, as always always and surveyed some of the American population. Not a massive sample size. I'm going to be honest about five people. Okay, great. But hey, this represents all of America. How much would you typically tip? At least 20% if the service was good. What would take it down from 20? I guess slower than usual service. But

I mean, you have to factor in things like, for example, during COVID, people are short staffed, so you have to be patient. But also, the only reason why tipping is even a thing is because they don't pay the waitresses enough for a livable wage anyway, so that's the biggest issue. It makes me anxious. You want to give the right amount, but if tipping is expected, then why not just bake it into the price? What don't you like? When they have the screen and they turn the screen so everybody can see you tipping. That's a new thing, having the screen, because they're staring at you.

What do you typically do on one of those screens? 15, 20, or 25? Probably around 15, because most of the time it's counter service. I would probably even do 10% for counter service. Even when they're staring at you as you do it? Depends on if 10% is an option. If 15 is the lowest percent and I would have to like manually change it, then that is way not worth it. Every once in a while, someone just

doesn't tip. And sometimes it's because they're just angry or a mean person, but sometimes it could be because they're foreign and they don't know. I dislike it because it's subjective to the person who's doing it. So even if they did a great job, people may not tip them appropriately. I think they should make a better wage and not need to be tipped. If the service is good, why not tip? I do not tip for takeout ever. Oh, oh boy, oh boy, oh boy.

Yeah, takeout's a whole other discussion. Takeout is another entire... Your face was shook when someone said they tipped 15%. And then 10. 10 is insulting. You might as well not tip. Okay, so we'll get into this a bit in the documentary, but if you're getting a coffee at a Starbucks or something, you tip 20% for that as well?

I do, because I don't know what else you're meant to do. I tip... This is going to sound like like brag, I tip the highest button, which is normally 25. Sometimes it's 30. Always, if it's on a screen. Now, if I'm writing it in, recently I'll do around 25, because I can do fast math with 20. Yes. And then I add a couple. Yeah, just bump it up a little bit. Yeah, exactly. On the screen, why do you go for the highest? Is it because you're aware of people watching?

Is it because it's an easy thing to do? Is it because it's a visualization of your options? Because I'm a good person. I always, to keep my life sane, I always keep it at 20 because the maths is easy I know I'm not insulting anyone Look, I wish we could talk to someone Wait, should I text Jess?

Because is 20% now even still good? Yeah, is it like a huge insult with inflation And the cost of living and everything else? Right Call Jess and put him on speaker Okay Just in case he has input here okay hi monica how are you hi jess roland um you're on the air david and i are recording a flightless

bird episode on tips okay yep and not tips like notes like when you give people notes on how to live, like tips at a restaurant, you know, hospitality. I want to know whether 20% is still okay or if that's now kind of an insult. It is a thousand percent okay. Oh, wow. Okay. What's considered bad? 13%. 13% or less. Like because it's not really like you're a bad tipper, but you just don't know. It's just right in the middle of this weird like what's wrong with you? You thanked me the whole meal and then you left 13 percent. Aha. So even 15 percent,

I think it's sometimes just culture slash their upbringing. And I don't have a problem with it. My only issue is that you're below. But you're very understanding. Yeah, I've been doing it 27 years. What's the best tip you've ever got? I think 450 on 300. They all left cash. They didn't speak English. I came back with the change, and they were just, no, no, that's for you. And it was very unexpected and great and amazing.

That's really nice. And worst tip? Well, there's so many times they leave without the credit card sign. They sign the wrong one or they put it in their pocket. So I leave with zero on 370, zero on 400.

So if I don't have a signed copy and they leave, I get zero. And then I have to tip the restaurant out 4%. So I actually lose 15, 20 bucks. Okay. This is really good to know. Thank you, Jess. Thank you, Jess.

Love you. Bye. Okay. That was helpful. Always leave your paper. Yeah. Always leave the paper. This is making me feel, this is good.

And I'm really happy we've settled at the 20. This is a good place to be. 20 is a great place to be. Mainly just because I can do the maths. Maths isn't my strong suit and thank God it's not some other amount. Okay and also in America it's math singular. What? Oh God. What? You do math. Are you being serious? No, I think this is probably

just me being uneducated in general. I think it's probably the same in New Zealand. Okay. I would say I'm bad at maths, but it should be I'm bad at math. No. That's what you said. You said maths a couple of times and I thought you were joking. Oh, that's what I've said my entire life.

No. No, this is me. Okay. It's math, singular. Okay. Thank you for this education. I'd say it would be the same in new zealand but i've just somehow gotten through this much life without anyone pointing it out thank you so much is there

anything else i say that's been deeply embarrassing as your mom actually can i be honest yes oh okay i feel defenseless in here as well because it's just us okay get stuck in there's one thing that you've said a couple times that makes me laugh out loud every time. Oh, no. Oh, no. Oh, no, you've forgotten. Oh, no. Okay. While you think about it.

Okay. Oh, no. I can't believe you haven't thought of that embarrassing thing. This is the little audio documentary I made about tipping. Okay. The first time I ever visited America was in my early 20s. I came here on holiday and was in awe of the place and how big everything was. Especially the food. The size of the popcorn at the movies. The giant cans of energy

drink at the 7-Eleven. The fact you always got a massive side of chips with everything. But my first dining experience was a bad one. I mean the food was good. It was great. The waiter was amazing. Putting in a lot of effort to make sure my dining experience was exceptional. I thanked them profusely at the end, then headed outdoors into the parking lot. The waiter chased me, because I'd forgotten to tip. It was one of the most awkward, mortifying experiences I've ever had, and I've never fully recovered. I'm a professor at the Cornell Hotel School. My PhD is in social psychology.

I started studying tipping as a grad student and I've been doing it for 30 plus years. This is Mike Lynn. And yeah, he spent 30 years thinking about tipping. His website, tippingresearch.com, is a treasure trove of tipping knowledge. The Encyclopedia Britannica of tipping tidbits. It's a pretty narrow focus and a bit unusual,

but it's an important phenomenon and somebody's got to study it, so I'm it. What was it that sparked a curiosity in your mind? Well, I helped pay my way through school as an undergrad by waiting tables. And I noticed that some people got better tips than others. And it wasn't necessarily related to the quality of service. There were people that I thought I was a better waiter than them, but they got more tips. And I was kind of curious as to why that might be. It was sort of born out of curiosity slash anger. Yeah. In my opinion, anger is a great motivator.

And it sent Mike on his 30-year quest to understand tipping. Yeah, I mean, we're told that tips are supposed to be an incentive slash reward. Whenever you see tip recommendations at the bottom of a check, they're usually higher percentages associated with higher quality of service. You know, tip 10% for adequate service, 15% for good service, and 20% for excellent service. The rules of tipping truly make me feel like an alien. I mean, that's why 90s sitcom Third Rock from the Sun featured tipping as a storyline. that's why 90s sitcom Third Rock from the Sun featured tipping as a storyline. A young Joseph Gordon-Levitt and John Lithgow playing aliens trying to understand America's weird ways. to people for doing things that I'm already paying them to do. It's only fair, Dick. It's a reward

for good service. You know about tipping? Well, sure. That's how I make most of my money down at the bar. But I never tip you. And that's why your drink always has that funny taste. As far as I understand it, 20% is the default amount you tip. Anything higher is due to exceptional service. You tip less if things are a disaster. But being from New Zealand, land of the ultra-polite personality, I'd be too terrified to ever tip less than 20%. Even if a waiter suddenly started bullying me or stole my shoes,

I'd still tip them 20%. Maybe more, just to prove I hadn't noticed anything wrong and would therefore never have to engage in any kind of conflict. So we are being told that tips are supposed to be related to service. And indeed, there is a correlation when I stand outside of restaurants and interview customers about how much they tipped and how they would

rate the service. I find a correlation between the two of about 0.2. Correlations can range from zero to one. Zero meaning there's no relationship at all. One meaning perfect relationship. You tell me one, I can tell you exactly the value of the other. 0.2 is a lot closer to zero than it is to one. It means that about 4% of the differences in tips left by different dining parties can be explained by their ratings of

service quality. So I know this is a question with probably a lot of incredibly complex answers, but if it's not related to the standard of service, why are people tipping 15% versus 20% versus 25%? Largely, it's social approval. I think you might first ask, why are people tipping based on bill size at all? Why tip a percentage of the bill instead of some flat amount? If I order an entree, the server is doing the same work, whether the entree costs $10 or $50. But the social norm says that you're supposed to tip 15% to 20% of the bill size. And people generally comply with that expectation because they either want the approval of the server and the other diners who might notice, or at the very least, they want to avoid the disapproval that comes from disobeying social expectations. When I look at the relationship

between tips and bill size, bill size explains 70% of the variance in tips left by different dining parties. That means it's twice as powerful as everything else combined. People live up to social expectations. We want to avoid disfavor or gain favor from others. And some people's favor is more important than others. If it's an attractive waitress, I'll care what she thinks of me more than if it's a guy. If it's someone who just seems competent, friendly, outgoing, I want them to like me more than if they're kind of nerdy and withdrawn. So I may tip a higher percentage in some settings than others because I care more about what that server thinks of me. This whole time Mike's been talking, my mind's been drifting to Quentin Tarantino's in some settings than others because I care more about what that server thinks of me.

This whole time Mike's been talking, my mind's been drifting to Quentin Tarantino's Reservoir Dogs and Steve Buscemi's character, Mr. Pink. Let me just get this straight. You don't ever tip, huh? I don't tip because society says I have to. All right, I mean, I'll tip if somebody really deserves a tip. If they really put forth the effort, I'll give them something extra. But I mean, it's tipping automatically. It's for the birds. The reason we don't tip in New Zealand is because it's viewed as unegalitarian.

It creates a power difference between the service worker and the customer. As a customer, it seems insulting to the person serving you. You're holding onto their money until the very end, judging them like they're a performing chimpanzee. Nothing about tipping is simple, because also what's expected depends on where in America you are. It is true that in urban environments and on the coast, people are going to tip more than in the middle of the country and more rural areas. The 15 to 20 percent norm is a national norm. But that said, the 15 to 20

percent rule is also getting pretty old. And many people would argue it's now 15 to 25% or even 20 to 30%. The pandemic has thrown everything out a bit, but a survey from May this year had the average restaurant tip in America at 21%. Men on average tip 22%. For women, it's 20%. For Northeasterners and Westerners, it's 22%. For Midwesterners and Southerners, it drops a point to 21%. 4% of diners take the Mr. Pink approach and never, ever tip. Since I've been in America, things have gotten more complicated. I've noticed sometimes the gratuity will be included in the bill. What do I do then?

Am I meant to give a bit more on top? I feel like it's some kind of trick. Okay, first off, I need to qualify anything I say on this with, I'm not an etiquette expert. I'm a social scientist who studies what people do, but I don't see any reason to tip on top of a service charge. Even though the server would like it, I don't care enough about what they think that I'm going to do that. Then there's the issue of the new tipping technology creeping in,

the screens you see at the cafe counter, my biggest point of anxiety. Basically what the research says is people feel uncomfortable with the social pressure and it makes them less happy and they will evaluate the service encounter and the provider more poorly if there's that kind of external pressure. So many circumstances. What to tip the Uber driver? How much to leave in a hotel room for the housekeeper. Tipping 20% for my $5 milky latte in Los Angeles makes for a very expensive coffee.

And there are those other situations where tipping's becoming an expected part of life as well. Sure. What about restaurant carryout? I'm not even using delivery. I'm my own delivery person. And yet they're going to ask for a tip. What do you think about that? Is that something that's crept in more recently, or has this always been a thing?

Well, it was a thing before COVID. After COVID, it's even more common. Yeah, of course, with the pandemic, we had everyone really wanting to thank people in the service industries more, right? So people have been a lot more generous. And I'm curious if that will stick around or not. Yeah. The data was provided to me by Square, the payment systems company. And it's very clear that tips increased during the pandemic. That was true for delivery services, whether it's full or quick service restaurant. That was not true of full service restaurants. Full service restaurant tips actually declined a little bit, but the evidence is that people were tipping more during the pandemic. I've seen some reports that that has started to fall back down, but I've also seen

some reports that it's held steady. And which of those to believe, I don't know. Whether tipping is going up or down, I still struggle with the idea that tipping has to exist in the first place. That people have to get tips in order to survive. Surely there should be a minimum wage that actually allows workers to live. Even with many states raising their minimum wage, most still have a minimum wage that's less than a living wage. The wage that would allow someone to get adequate shelter, food and other basic stuff to stay alive. Tipping is life or death. This seems like a

very flawed system to me. Yes and no. I'm trying to think of a way to say this that doesn't make me sound bad. There's a reason that I took a job as a waiter when I was a student in college. a waiter when I was a student in college. And the reason is that I got more in tip income than I could have possibly made for any other job requiring similar qualifications. And so is it really harming the server? Yes, they're accepting some uncertainty about income from any particular customer. But across a large number of customers, their income is likely to be higher than it would otherwise be. People are generous in tipping and also don't think it's fair to say it's bad for the customer either, because ultimately employers are paying lower wages to tipped workers, but that simply allows them to have lower menu prices and competitive pressures are going to force the

employers to give that bonus to the customer in the form of lower prices. The person who actually hurts the most from this is the employer and the restaurateur. Maybe I was wrong about all this. Maybe tipping is a great system. Maybe my New Zealand ways are backward. Where do you see tipping heading in the United States. Anybody who breaks a prediction about the future with any confidence is a liar. I don't know what the future is. I'm also not a futurist. Okay. But I don't think tipping is going anywhere. Tipping isn't going anywhere. I guess I'll just have to get used to it. Okay. I have lots of thoughts. One thing, I talked to Dax this morning.

He recorded a fact check and I said we were going to do this episode and we were going to talk about tips. And did he have anything to add? Yeah, where was he sitting on it? He thinks what you were saying about New Zealand and these other countries that it's a little condescending to tip in general. It's like, I'm going to decide how good you were. And it is. When I hear it through that lens, I'm like, that is gross, which is why I don't really do that.

I don't really tip based on how good they are. Yeah, you've got your default amount in your head and you'll give that to them regardless because you know they need that money to live, essentially. To live live and even if they didn't do that great of a job maybe i didn't do that great of a job at my job yesterday and like i'm not getting paid less yeah and people have bad days and like if your service is bad i figure that person might have just had a terrible day it's not like they hate you and they're always like this yeah i just feel like it does create this bizarre power structure and like punishment it's

what mike lynn said it's like you give it to them at the end it's like you're holding on to this money yeah and it's like perform for me do all this good stuff and then i'll pay you at the end because i don't trust you enough now to give you it now right have to wait to the end of the night so i do think in these other countries that it is more progressed, but is more equal to just have no tip and pay them what they should be getting paid. Yeah, Mike went on another diatribe that I didn't put in the documentary, but he went to Australia one time. And so imagine this like tipping expert of 30 years going to Australia, a place where they don't tip at all. And he said it was sort of what I feel being in America, the panic and the worry. He felt it over there because he went on this Outback tour.

And this guy just went above and beyond in every way. And all Mike wanted to do as an American in his very being was to give him more money. Yep. And he tried to, but the guide was just so embarrassed and wouldn't take it. Like, no, no, no, don't do that. So it ended up being like the reverse situation where both parties were mortified just like the equivalent of me being here and forgetting to tip yeah and also being in a mortifying situation it was reverse we take for granted the ways we've just grown up what's been in our culture the first time i went to london was

the first time i experienced that too i was, it was for a study abroad program. Our director was like, you don't tip here. Like he had to like really make it really clear. It's like, what? I don't understand. And did you find that hard or did it kind of eventually relax you? And you're just like, wow, this amount is the amount I pay and I go. I got there, but it takes a second when that check comes. Have you been to Sugarfish? I love Sugarfish. I'm a big fan. Well, that gratuity is included.

Yeah, that's probably why I like it so much. It's got me covered. But I feel the same way at Sugarfish because it's so good and the service is normally really good. And I just enjoy that experience so much that I always want to leave more. And I sit there for a second like, should I add more? And I don't. I normally don't. Technically, you shouldn't have to. That's why it's included. But there is that pressure because you're so used to it. And I feel like, am I disrupting their ecosystem?

They have a whole thing down. And if I add more money to it, it might ruin something. You start to mess with it. The other thing I find fascinating, people know you in America, right? And there's that whole thing. Do you give more because they know who you are as well? That's another thing. Oh, 100%. It's one thing for me to go out here where I'm just like, no one has any idea. I can sort of do what I want.

I could go out there in life and create havoc. Yeah. And it's not really going to come back on me. Yeah, like they'll go home. If you go out and have a big night and you under-tip, that's going to come back on you. No, definitely. I mean, Jess has told us stories, but they're all positive. I'll be fair.

But they've been like, blah, blah, blah, comes in. And he tips so well. Like, he'll say it and he remembers it. And now I've remembered it. And I'm like, oh, what a good person. It's probably probably to be honest it probably is why i do the thing or i go up yeah there's that social element where you don't want to be caught essentially being a bad person as well that does come into it absolutely now let

me ask you something if you were on a date and your date was paying oh this is going well it's a good night it It's already good. Come out on top. Let's say you glanced. You're getting up. You guys had a great meal. She was awesome. And clicked.

She paid. Yeah, wow. Yeah, glowing. It went so well that you're going to go to get ice cream after. Wow, there's more. There's more. That's always good. It wasn't planned. It's a good sign.

But because it was going so well, you were like, do you want to get ice cream? And she was like, yeah. Check comes, she pays, you guys get up to go. And as you're getting up, you look down and you see that she's tipped 10%. What do you do? Yeah, so as a New Zealander and as me, I could never, ever bring it up. I just internalize it along with a long list of items I keep on everyone and never express. And I would just add that to a little mental list of things. And I would, at that point, I'd still go and get ice cream because I love ice cream. It's just a given,

but I would definitely note it. It wouldn't be a non-issue, but I wouldn't raise it in that moment. If we got ice cream, like things went well, like we get married at some point settle in and stuff and then i'm still noticing again and again never tipping then i would have to bring it up okay because it would get awkward you're waiting until after you get married marriage first lock it in and then bring up my list of grievances after the fact, like a psychopath. Okay, listen, I've done this before. Not on a date, but with friends. I've left more. Oh, so you've countered their bad tip by upping it.

I like see it and I'm like, oh my God, that's unacceptable. We can't leave that. So if they're a little ahead of me, I'll just take some money out out and then just like throw it on the table. Oh, you're so kind. Well, no, it's just embarrassing. They're not noticing it. Yeah, I can't do it. I feel like it's shaming if I do it in front of them, but also unacceptable. You can't leave 10%. I wonder if that friend, everyone has adapted around them and so they're constantly now just like putting down very little. All their friends are topping it up for them and they're just coasting through life. Probably.

Hacking the system. The server's still happy. They're happy because they haven't paid nearly anything. They're getting married. It's not stopping them from getting married. They're marrying you. Oh, I can't wait to marry this person. I've got it all laid out on my head.

So a question I had going back into this documentary is why does tipping even exist in the first place? Why are we doing this? So this was the next question on my quest. Talking with Michael, it seems like tipping is here to stay, which raises another very obvious question. Why is tipping here in the first place? I've been reading about tipping a lot and kept coming up against one name again and again, Saru Jayaraman. She's done TED Talks on tipping and been on Bill Maher's show talking about tipping. She advocates for workers, heading the One Fair Wage campaign, which aims to eliminate America's two-tier wage system. She started this sort of work fresh out of law school in a pretty intense way. So I am the child of immigrants and I had been

working straight out of law school representing immigrant workers in New York City when 9-11 happened. And on 9-11, there was a restaurant at the top of the World Trade Center, Tower One, called Windows on the World, and 73 workers died, and about 250 workers lost their jobs. And so I was asked to start a relief center in the aftermath of the tragedy. But we were soon bombarded by workers from all over the country. And so we grew really rapidly into an advocacy organization fighting to raise wages and working conditions in the industry. Now, wages in America are confusing to me. But for tipped workers, wages are pretty bad. Federal

law for tipped workers says the minimum wage is $2.13 an hour. So that's what it is in states like Alabama, Georgia, and Texas. So of course tipping becomes the make or break for a worker. The funny thing is, despite tipping being so American, it didn't start here. So tipping actually originated in feudal Europe, not the United States. It was something that aristocrats and nobles gave to serfs and vassals, but always on top of a wage. I'd never heard of serfs or vassals before. They're basically peasants who were indebted to lords or monarchs in some way. But Saru's main point is that in feudal Europe, the tips came on top of the decent wage.

There was always that starting point. No feudal serf would have worked for nothing. You know, they were working for wages and tips were an extra or bonus for a job. Well done. That idea came to the States in the 1850s when rich Americans started to travel by ship and they tried to show off that they knew the rules of Europe.

And there was at first a massive populist movement resisting tipping. People wholeheartedly rejected it. Six states passed complete bans on tipping with the rallying cry that we're a democracy, we're not feudalism, and you should get good service regardless of how much you can afford to tip. And by the way, we think employers should pay their workers, not customers. In 1853, waiters who were mostly men and who got a wage at the time, though tipping was not yet so prevalent,

went on strike in major U.S. cities, Philly, Boston, New York, Chicago, and demanded a higher wage. And in response, the restaurant industry replaced them all with women who they felt they could pay a lot less. So that was the first thing to happen. And then 10 years later, emancipation happened. And they said, wow, this is even better. We can hire black people for free and tell them that they will have the privilege of obtaining these things called tips from white customers, and in some cases even charged black people for the privilege of having a position as a shoeshiner or a porter or a server. And so it's so important to stop and understand Americans

mutated tipping at emancipation from being an extra or bonus on top of a wage to becoming a replacement for wages, creating the idea that a worker couldiance on tipping as anything other than a devaluation of women's work and black lives. That is what it is. In 1938, this was all solidified into law as part of the New Deal, a series of programs during the Great Depression aimed to make America prosper again. But employers only had to pay tipped workers

an amount that would add up to the minimum wage when you threw all the tips in. And so today, in many places, we have that grand hourly rate of $2.13. And it's so important to understand that's not an accident. There is a very powerful trade lobby called the National Restaurant Association, the other NRA as we call it, led by the chains, the IHOPs, the Denny's, the other NRA as we call it, led by the chains, the IHOPs, the Denny's, the Applebee's, that's been fighting since 1911 to maintain this sub-minimum wage.

That is their primary purpose, is to be the only industry in the world that gets away with not paying their own workers and instead forces customers to pay their workers' wages for them. And so the culture of tipping is not an accident. It's not some organic phenomenon. It is a very intentional political history of a trade lobby that sought to maintain free labor. Do you think many Americans understand its sort of incredibly sexist and incredibly racist origins, or does it not really know it?

Very few people know it. Saru says that when they poll people in red and blue states, one of the questions is whether workers should get a full minimum wage, $7.25 an hour. She says most people answer, I already thought they were getting a full minimum wage. I thought my tip was on top of the wage, not instead of the wage. When people find out that there even is a sub-minimum wage, they are outraged. And like so many other issues in America that you probably will find through your podcast, we are not divided as a country. We are not polarized. It is such a freaking myth. We agree on so many basic issues. This issue, minimum wage, the fact that people should be paid

a decent wage. We are not polarized from each other. We are polarized from our elected officials and the trade lobbies that they fall over to. And in this case, a trade lobby that has held sway over Congress and state legislatures for over a century. There's also the fact that tipping creates some pretty bad power imbalances for the 5.5 million Americans that rely on them. More than two thirds of tipped workers are women, disproportionately women of color, highest rates of single mothers of any industry in the U.S., struggling with the highest rates of poverty and sexual harassment of any industry because when you live on tips and you don't get a wage, you have to tolerate so much from customers to get those tips.

And in fact, the data shows the seven states that require full wage with tips on top have one half the rate of sexual harassment as the states with sub-minimum wages. Why? Because it turns out when you pay a woman a full minimum wage, she's not 100% dependent on that tip, so she can tell somebody who tries to do something to her, buzz off. Saru says the pandemic made things worse too. Sure, people in LA and New York may have tipped for takeout more than usual, but when it came to people going back to work in a world full of masks, things weren't great. Workers found tips went way down, sales were down, harassment went way up, and we already had the highest rates of harassment of any industry.

Thousands of women reported, I'm regularly asked, take off your mask so I can see the pretty face of my server before I decide how much to tip. Which really blew out of the water any notion, which was always false, that tipping in this country is based solely on the merit and the quality of the service. It is not. I thought back to what Mike Leonard suggested to me earlier, that for workers, tipping was a good good thing or it could be a good thing because they could earn more i think he knew he was on the nice suggesting this trying to think

of a way to say this that doesn't make me sound bad so i decided not to dump a minute when i talked to saru i've heard it argued that some servers would prefer the tipping system because they can make more in that system than they could if they were just getting the minimum wage. This idea that that for some is worth keeping in the system. So that argument is based on a complete fallacy and misinformation perpetuated by the restaurant industry and the restaurant association. Because what you're describing is not actually what we're advocating for. Nobody's advocating for the minimum wage and no tips. What we have here in California and the seven states that already do what we're fighting for

is a full minimum wage with tips on top. And in fact, tipping is higher in these seven states than it is in the rest of the country because it turns out when you pay people an actual wage, a full wage, what do they do? They go out and most of all, they eat out. And restaurant workers, when they eat out, they tip better than other people because they know what it's like to live on tips. So tipping is higher in California and Oregon and Washington, Nevada, Minnesota, Montana, and Alaska than it is in the 43 states with a

sub-minimum wage. It is a complete misinformation campaign that there's a choice between wages and tips. There's no choice. And she sees those seven states, California, Oregon, Washington, Nevada, Montana, Minnesota, and Alaska, as a sign that things are getting better. We are in such a historic moment where millions of workers for the first time in 160 years since emancipation are rejecting this wage structure, are saying, no, I refuse to work for these wages. I want a full minimum wage with tips on top. And lo and behold, miraculously, restaurants that said we can never pay a full wage and we'll go out of business are suddenly paying 15, 20, 25,

30 bucks an hour plus tips because they can't get workers to come back any other way. In Portland and Maine, she says the minimum wage is going up to $18 an hour for everybody, including tipped workers. And they're about to be on the ballot in Michigan and multiple other states. It is this very historic moment where something that was created as part of our original sin of slavery is about to be demolished. And it is going to be so much better for all of us as consumers. This is not a once in a lifetime or generation moment. This is a once in a nation's history moment where we have this moment of opportunity to shed some of our ugliest legacies of slavery and it's about to happen.

I guess tipping is here to stay but hopefully it ends up somehow being as originally intended a nice little bonus on top of an existing wage that you can actually live off. For me I think tipping is always going to be awkward, a strange power play between two people. And I'm reminded of another story Mike told me that illustrated this so clearly. Because 30 years ago, before Mike became a social psychologist and tipping expert, he worked at a restaurant and experienced being on the other side firsthand. I was waiting on New Year's Eve, nice French restaurant. I was in a tuxedo. We did table side service. This is a very fancy place. I had a customer who put a stack, pretty big stack of $5 bills on the table and said, this is your tip. But I don't ever want to see a

cigarette butt in my ashtray. and I want my water glasses full. And every time there is an empty cigarette butt in an ashtray or there is an empty glass of water, I'm going to remove one of these $5 bills. And then he proceeded to act on that. I ended up with a good tip because I was a good server. Ended up with a good tip because I was a good server. But he was lording the power differential and really rubbing it in my face and saying that I didn't have any kind of work ethic to do a good job. And I just hated him. Rough.

Yuck. Oh, my God. I hate that guy. Weirdly, that's also a plot point on Third Rock from the Sun where John Lithgow's character puts down a big stack and just like removes the notes but you know I did some googling and this is America like it's crazy how where these things come from

and just incredibly depressing that if you go back far enough like so many things here are based on racism or sexism it is it's so embarrassing and these things just morph and change. And like, here we are today in a system that sort of seems accepted, but look at its origins and you're like, oh, God. It's good to know.

It's good to know the history because I definitely did not know that. And I did not know that states were still doing $2. That was wild to me. And I think most people don't know that or assume it is much, much, much higher. But you know, that's what she's fighting for. Right now, the service industry is suffering majorly. A lot of people post-pandemic have not returned

to their serving jobs because they suck because of all of this, because it's really hard. And all these places, people are making $2 and stuff. So why would they go back? Now they've had a break from it. They're like, I'm going to find something else to do. You're realizing that life can be something else. Yeah. And not this miserable. But if you paid them $18, that's really exciting, I think. Imagine. If you're making $18 an hour and you're getting tipped, that's a huge incentive to join that workforce.

Completely. And to put all of yourself into it and to do an amazing job. And then you have more money and you can go out and spend money out there as well when you're at a restaurant yourself. And exactly. The prices of the items don't have to be insane to cover the cost. Because restaurants, they're always in the black or red red okay always in the red they're always in the red absolutely so they're struggling to survive so i get why they're cutting corners like i can logically understand in some ways why

they're cutting corners so like lifting up the whole system would help it would help everybody and yes something mike said earlier as well, the fact that it is odd that tipping is linked to the cost of the bill. If the server's bringing you out like a little meal versus a big meal, they're sort of doing the same amount of work. So why is it a percentage of that? That still seems very strange to me. It's true.

And I'll never get my head around that. I was incredibly surprised at the stats around harassment still happening and all that kind of stuff. That's incredibly depressing. And you're constantly forgetting that. I mean, I interviewed Mike, who studies this stuff and worked in this area. But his perspective, obviously, from when he was a waiter 30 years ago, was as a guy. Like, it depends what server you talk to and what part of America as to the experience that they've had. Yeah.

Right? I never have worked in restaurants. The only hospitality job or like customer service forward job I've worked in was SoulCycle front desk. And it was in Beverly Hills and people have expectations in Beverly Hills. Uh-huh. I have a very low tolerance for entitlement and bitchiness. Yeah. Especially when I'm making $13 an hour.

And a soul cycle in Beverly Hills is setting you up for a real disaster. Yeah. It wasn't a good fit. But one time this lady was giving me such a hard time and I was like, hold on. And I moved over and I rolled my eyes at her. And it really just, it happens involuntarily i can't the eyes were just they just went up but then she talked to another employee about me and she rolled her eyes at me and i'm like because you fucking deserved it like i just can't i can't so like the man with the stack of the money, I just would have been like, take your money and never come back here again.

Like get the fuck out of here. We don't need your money. Completely. It's just so, it's such an infuriating concept. And the sad thing is the people who have to tolerate this, they're the ones that need it the most. And so they can't do that. They can't say go fuck off. No.

Because they'll get in trouble. They'll get fired and they need the job. Like it sucks. Yeah so they can't do that they can't say go fuck off no they'll get in trouble they'll get fired and they need the job like it sucks yeah they're trapped and it comes back to that power imbalance where you've got someone holding this money over you and if they say to you take your mask down so i can see your pretty face like what a horrible power dynamic to be stuck in when you need to go home and feed three kids or something. Exactly. Yeah. Oh, bleak. This one took a turn. Sorry, it did get really dark. I've learned that 20% is okay.

Yep. I've certainly learned not to go below that. And that things are potentially getting better. There is a swing towards moving up from that $2.14, whatever it is, and actually giving people a decent livable minimum wage, which is huge. I hope so. Yeah.

Well, okay. Then I think you got, I'll be nice, about 20% more American because you're paying 20% tips. Thank you, I appreciate that. I really appreciate the cool scenario you gave me, the cool date and then marriage, that was cool. One last question for you. What did you do to annoy that customer at SoulCycle,

which then made you roll the eyeballs involuntarily? That's a really great question. Do you remember? And of course, I don't remember. I think I was waiting for something to print out and she needed it now. She needed it immediately. She needed it immediately. And she made that known.

Yes. And I was like, I have to wait for this. I was basically telling her to wait a second. Oh, she would not like that. No. She has places to get to. She has fancy restaurants to get to. Where she probably doesn't tip that well.

Exactly. Piece of shit. Ding, ding, ding.