"Tipflation" could be blamed on tablets or the post-pandemic economy — but consumers seem to be giving in to the pressure and leaving more cash behind.
Sure, most Americans report feeling negative about tipping, but service workers are earning exponentially more in gratuity than before the pandemic, according to payroll provider Gusto. From March 2020 to May 2023, hourly wages only rose 18%, compared with a 42% increase in tip earnings, the company found.
"I like tipping mainly because I have a couple of friends that work in the food industry," Saad Kabir, a recruitment coordinator at New York City Public Schools, tells CNBC Make It. "Businesses are hurting right now, so they're just passing the buck to consumers."
The trend seems to be at its height in bars. Bar workers, who on average earn just above the federal minimum wage in base pay, now make an average of $13.33 per hour in tips, both of which are up from the pandemic, according to Gusto. Of the 300,000 small and medium-sized businesses included in the analysis, bar workers made more in tips than employees in other service industries.
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Some consumers say they don't mind tipping bartenders at least 20% because of the amount of labor that goes into the job — mixing the drinks, interacting with customers and sometimes serving tables.
"I feel like it's the most gruesome job to work in a bar, just running back and forth all night," investment consultant Haley Truchan tells CNBC Make It. The Manhattan-based 24-year-old says she almost always tips 20% at bars.
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Kabir agreed, saying he tips upwards of 40% for particularly good bar service.
"Bartenders, to me, are like unpaid therapists," Yonas Haile, a 32-year-old NYC resident, says. In his experience, bartenders have to know menus, pairings and provide cultural insight to visitors. He's even tipped 100% on bar tabs in the past, he says.
To tip or not to tip
With rising costs of living, it's reasonable to argue everyone deserves to make more money. But you're not always required to tip bar workers a full 20%, etiquette experts say.
Typically, people working behind counters are paid a living wage, unlike traditional restaurant servers, Elaine Swann, a lifestyle and etiquette expert and founder of the Swann School of Protocol, told CNBC Make It earlier this month.
In New York City, for example, the minimum wage is $15, but it's $5 lower for tipped food service workers, according to the New York government website. That number is even lower on a federal level: Employers are required to pay tipped workers a mere $2.13 per hour in direct wages, according to the Department of Labor.
It's worth noting bartenders across the country earn varying amounts, depending on the business, occasion and state. Bar workers tend to make more money in tips than restaurant, performing arts or personal care employees, according to Gusto, but that can also mean their income is more dependent on gratuity.
As a rule of thumb, if you're at a bar and not ordering food, a buck or two per cocktail will suffice, Diane Gottsman, founder of The Protocol School of Texas, previously told CNBC Make It.
Tipping as a cultural priority
Regardless of the industry, some consumers seem to have reconciled with the fact they'll have to foot the bill for service workers in a turbulent economy — even though "tipflation" is a uniquely American problem.
"It doesn't really matter what the service or product is. If someone is serving me, they're doing their job," Claire Wegener, 30, tells CNBC Make It. As an Australian visiting the U.S., she tips a standard 20% every time she's asked. But at home, tipping is reserved for exceptional service, she says.
Wegener doesn't appear to be alone in thinking employees, regardless of their hourly wages, deserve to be paid more — especially because the service industry is becoming more reliant on those pressure-inducing tablets. Across industries, tips now make up a quarter of hourly workers' earnings, up about 4% since the start of the pandemic, Gusto found.
"Even if they have a bit of a rough day and they maybe don't give the best service, that doesn't mean they don't deserve to be able to buy their groceries," Wegener adds.
Clarification: This article has been updated to clarify that bartenders can earn varying amounts depending on the location and employer. In certain cases, this includes the reduced minimum wage tipped workers earn.
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