We have published an article today under the title of “A New Guide to Tipping in the Gig Economy”

The story relates “the history of rewarding good service with additional money is murky, but it most likely originated in Europe, possibly in medieval times, when a serf would receive a tip from his lord for performing well. This practice gained popularity in 17th century England among the upper classes and then spread to the U.S. after the Civil War, when wealthy Americans began traveling to Europe more regularly.”

“According to a Consumer Reports survey of more than 1,000 adult Americans in December, 27% of respondents said there are more situations today where they are expected to tip than there were even two years ago.”

When I grew up in England it was not the common practice to tip. Then at restaurants it started to become common place. What started at ten percent changed to fifteen per cent. In the USA it is now twenty per cent.

What does irritate me is when you read the menu and the prices it states a 15 or 20 percent “service charge” WILL be added to your bill. At least you know.

Because it has become the norm some of our local bar/restaurants here in the Cayman islands present you with a bill that states GRATUTORITIES ARE NOT INCLUDED”.

What is the difference between “a tip” and a a “service charge”.

Nothing much, except tips are more on the voluntary side. It is for you to decide the amount.

Then we have “cover charges” that is a FIXED charge and not a percentage of the bill.

Tipping is often something employees rely on because they are paid a sub-standard wage.

Mandatory tipping should, in my opinion, be illegal. This would seem to suggest a gray area whether this amount should be taxed. Tipping should be at the discretion of the customer. Especially so, when some restaurant customers have been arrested for refusing to pay the mandatory tip.

There is a problem with discretionary tipping, however. Ian Ayres, Fredrick E. Vars & Nasser Zakariya published a paper suggesting that tipping contributed to racial prejudice, since ethnic minorities would often be less able to pay a large tip. Another paper by Yoram Margalioth of Tel Aviv University argued that there was a negative externality associated with tipping, and that the practice facilitated tax evasion. Two other American studies have contributed to the thesis that tipping is racially discriminatory, finding that ethnic minority servers and taxicab drivers received lower tips on average than their white counterparts. In the study of the servers, an attempt by the author to isolate other possible contributing factors, such as poor service, found that “After controlling for these other variables … the server race effect is comparable across customer race.”

Tipping in China is frowned on and in Japan it is offensive to give a tip.

I don’t have any tips for our readers. Sorry.