Tipping has a chequered past

There is a lively debate in the US about the need to tip. Could it have influence elsewhere?

Restaurateur and Shake Shack founder Danny Meyer has been one of the most vocal advocates for abolishing tipping in America. Scott Olson / Getty Images

Tipping is a social custom that is practised differently across nationalities. In the UAE, where people from 200 nationalities live together, tipping can be, well, confusing. What exactly is the custom?

With one of the most dominant tipping cultures anywhere, the best place to begin a discussion about the custom is in the United States. In fact, there is a lively debate unfolding before our eyes about the use (and uselessness) of tipping.

Restaurateur and Shake Shack founder Danny Meyer has been one of the most vocal advocates for abolishing tipping in America. He recently raised prices at his restaurants (including Shake Shack) to pay his staff a better wage without tips. To make his point, Mr Mayer raised the dark history of tipping in the US.

Contrary to popular belief, the concept of tipping didn’t originate in America. Rather, the roots are in feudal Europe, where aristocratic lords would give their servants extra money when they performed duties above and beyond expectations. When tipping was exported to the US in the 19th century, Americans were actually uncomfortable with the practice.

For a young democracy, many Americans believed it was the responsibility of employers, not customers, to pay their workers. However, business owners – especially in the restaurant business – fought to ingratiate a tipping culture in America for a dark reason. If the burden to pay employees shifted onto the customer, it meant that restaurants and other businesses didn’t have to pay recently freed slaves who were flooding into the workforce.

Over the decades, Europe eventually got rid of the tipping custom, but America entrenched it. In 1938, when the first minimum wage law took effect as part of the New Deal, there was a provision that employers didn’t have to pay a base salary for workers that met their minimum wage through tips.

Few Americans are familiar with the history of tipping in their country. Mr Mayer believes that if they understood how tipping allowed some employers not to pay their workers fair wages, then the culture would change.

Most of Europe has effectively dissolved the tipping burden through government protections that require minimum wages. In Scandinavian countries, where there are robust social safety nets, the costs of goods and services are high precisely to allow employers to pay their staff a living wage without the need of tips. This is also true for Australia.

Closer to home, there are measures that essentially bake the tip into the total cost of a good or service. If you have dinner at a hotel, for example, a service charge is included in the cost. This eliminates any requirement to pay a tip, but it doesn’t remove the personal decision to tip a server, a delivery person or a car attendant.

While Mayer’s attempts to banish tipping in America has raised the issue, it seems unlikely that we will see a world entirely free of tipping.