William Watson: Some points about tipping tipping-points

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomeFP CommentWilliam Watson: Some points about tipping tipping-pointsIf we've reached the point where people want government to start regulating tipping, is there anything at all we won't ask of government?Last updated 28 minutes ago If we’re now such snowflakes we can’t confront an underperforming server, maybe we really do belong in Europe. Photo by Stephanie Pilick/picture alliance via Getty ImagesNow that we’re going to be joining Europe in some capacity, I’m thinking of buying a beret. Is there a more sophisticated un-American look? Amazon offers a wide choice, though all made in China, of course, not France. For 10 times the Amazon price you can get water-repellent ones made in the Basque region of Spain. I wonder if they can add ear muffs for Canadian winters?THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountThis advertisement has not loaded yet, but your article continues below.Or maybe I’ll get a kilt. Amazon has those, too, cotton-polyester ones starting at under $20, though for a regulation eight-yard kilt in the Watson tartan, handcrafted in Scotland to my exact measurements, we’re looking at $899.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againI begin to see that Europe may be expensive — though you’ve got to think 100 per cent worsted wool will be better in our Canadian winters than cotton-polyester.I wonder if we’ll still have tipping after we get associate status with Europe. Many EU countries don’t have tipping. Or rather they have it but the tip is built-in, with 15 per cent or so automatically added to the bill. You pay but you don’t have a choice, which lots of people think is the problem with the EU itself. The Brits who voted to leave certainly do. Also the Danes, who at first voted against the Maastricht Treaty but were browbeaten into endorsing it second referendum around.In some places in Europe they give you the chance to add even more to your bill, though the options are small single-digit percentages, given you’ve already given. These days in this country, the lowest option credit card readers offer is often 18 per cent, neither the traditional 15 per cent nor whatever the HST produces, which became traditional soon after we got HST, since it makes calculating easy. (Once upon a time, long ago though not far away, the traditional tipping percentage was 10.)This advertisement has not loaded yet, but your article continues below.Credit card terminals do give you the option of “other,” which you can put at zero. During COVID I would tip the cashier in the pizza joint even though I was just picking up an order I’d phoned in. I figured they were taking a chance by showing up at work. As “front-line workers” they deserved more recognition than simply the regular early-evening banging of pots and pans. (Did we really live through all that or was it just a nightmare?)Now though, with times back to normal, I choose the zero option when I’m just picking things up or a cashier is only handing me something off a shelf. Yes, it’s unfortunate to have to punch zero in with the person standing right there. But you’ll live. It’s your money. They don’t have a right to it. And have they done anything to deserve it?I’ve got tipping front of mind because I spent last weekend helping teach 28 Canadian journalists the rudiments of economics, which two active profs and I (a retired prof) have done for the Fraser Institute at least once a year (COVID excepted) for the past 15 years.We finish up the sessions with an application: the economics of tipping. We get them to read short articles on tipping and then ask them leading questions about any possible effects on wages, relations between servers and owners, servers and diners or servers and cooks, likely incentive effects, and any other consequences, intended or unintended, they can think of.This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.We also ask (pretty sure I’m responsible for this question) whether there’s any role for government in setting tipping policy.The answer I’m looking for is no: how much you pay for a service and how the restaurant or other business charges you is a private matter between you and them. There’s no market failure here. We’re not talking public goods (like lighthouses or national defence) or goods that throw off externalities, either positive or negative: your dinner is your dinner and no one else’s. No “tragedy of the commons” is involved: unlike in a high-seas fishing bank, where anyone can rustle the fish, the establishment polices the salad bar.Sad to say, many people say government does have a role to play in setting tipping policy. “Sad to say” because you might think two and a half days packed with economics would imbue some appreciation for the virtues of voluntary actions in free markets.True, if the tips are on top and you didn’t like the service, filling in a low or no amount on the terminal takes a little gumption and may ruin the mood. But if we’ve reached a situation where we need government to step in so moods aren’t ruined, is there anything we won’t ask government to do for us?If we’re now such snowflakes we can’t confront an underperforming server, maybe we really do belong in Europe.This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. 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