A $140 Dinner, No Tip: The US Restaurant Pay Debate

At a San Francisco restaurant, diners pay $140 per person, and they leave no tip. The menu price is the final price. The restaurant pays a wine waiter about $40 an hour, so she does not have to depend on the kindness of strangers to pay her bills.

But this exchange—higher menu prices for steady pay—is at the center of a US debate. Owners tried this idea in 2015, but many experiments failed. Customers did not like higher menu prices. This happened even when the final cost with a tip would have been almost the same. A professor who studies tipping says people do not always think about the tip they save when they see a higher price.

Supporters say the system is fairer. It sends more money to kitchen workers, who often earn less than servers. One New York restaurant pays staff about $30 an hour, and many customers are happy not to add 20 percent.

But critics warn that removing tips has costs. In many states, workers who earn tips can be paid a lower legal minimum than other workers. So a no-tip restaurant must pay much higher regular pay. A Texas restaurant operator says skilled servers can earn $40 to $60 an hour in tips. Without that chance, they may not work as hard.

Some restaurants tried this and later brought back tips. They did this because higher prices and extra taxes made the change too difficult. The same professor believes the costs are still bigger than the benefits, so a wide move away from tipping is unlikely for now.