The truth about tipping

A tip jar sits on an ice cream truck at the display of Republican presidential candidate Michigan Congressman Thaddeus McCotter at the Iowa Straw Poll on August 13, 2011 in Ames, Iowa.

The holidays provide a chance for us to show our appreciation for the people we've done business with throughout the year. Giving a little something extra to the hair dressers, mail carriers, housekeepers and doormen is part of our society's code of etiquette. The spirit of generosity is remarkable this time of year, especially to the people who rely heavily on tips to supplement their incomes.      

Tipping is a way to say thanks to someone who has made your life a little easier. It creates a personal connection, even if just for a moment. And indeed, tipping is all about relationships.

Holona Ochs is an assistant professor of political science at Lehigh University and an expert on America's tipping industry and she says tipping may be more about emotions than economics.

"Individually whether or not somebody can identify with the person that they are tipping, whether or not the person that is receiving the tip feels that they can make a connection...these things affect not only the size of the tip, the regularity of the tipping, but also how people experience the norm of tipping itself," says Ochs.

According to Ochs, the U.S. tips more money, more often than any other country. More than 90 percent of Americans tip, and if it feels like more and more occupational categories are recieving tips these days, that's because they are. Ochs notes that teachers in wealthy school districts are more likely to get a tip nowadays.

In her work, Ochs has found that the tip amount more often reflects on the tipper than the tippee's service.

"Tipping does not serve as a clear signal about the quality of service and it doesn't serve a monitoring function," says Ochs. "In the strictest economic sense it doesn't have an economic purpose. It's an emotionally and culturally driven practice."

About the author

Veteran journalist Tony Cox has joined American Public Media as guest host of Marketplace Money.
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Amazing that your story left out that many people, such as waitresses and waiters, make their living from tips. Thanks to Ronald Reagan, wait persons are paid as little as $2-5 an hour and have to supplement their income on taxable tips. Your show should be ASHAMED of leaving out such a detail. Incredible, are you out of touch, or what?

this segment single-handily made the lives of hundreds of thousands of people much more difficult! I am extremely disappointed that Ms. Oaks had no understanding of how tipping works in the food service industry. In nearly all restaurants in this country the service staff are paid well below minimum wage per hour! When the national minimum wage was raised to 4.25 per hour the servers minimum wage was increased to 2.15 an hour. The thought is that the tips received will make up the difference. This 2.15 per hour is still what most servers make! They are also generally taxed on what they sell and many, many employers use this tax as a way around ever passing the types employees any hourly wage on their paycheck! For most of the industry, what you tip is what that server takes home to live off of! 15 per cent should be a base tip unless the server spits in your face. you may not think that you got the best service but that person did SERVE you! If the tipped staff is paid a higher wage you WILL pay more for your food!

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