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Tipping Is Bad and We Need to Stop Doing It

When Girard, a new restaurant in the Fishtown neighborhood of Philadelphia, opens in September, its name will be added to a growing list of dining establishments notable for their adoption of a trending policy: no tipping.

In Girard's case, restaurant workers will be paid a percentage of the restaurant's profits, in addition to their hourly wages.

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In Newport, Kentucky, the newly opened Packhouse Meats restaurant pays its servers either $10 an hour or 20 percent of their food sales, whichever is more. Credit card slips don't have a "Tip" line, and signs are posted prominently, advising patrons of the no-tipping policy.

Even as diners acclimate to these establishments' novel approach to pricing their services, the rest of the developed world is yawning, wondering what took America so long to embrace a policy that is so obviously both transparent and fair.

It's a positive for most restaurant workers, as well as for their customers.

The federal minimum wage for tipped workers is $2.13, and has been since 1991. The assumption is that tips will compensate for the paltry minimum, but a recent White House report found that workers dependent on tips were more than twice as likely to experience poverty.

In other words, the optional gratuity system tends to under-compensate workers.

Related to the no-tipping policy but a step in that direction is the set-tip approach: The restaurant simply adds a pre-set amount to the bill, typically between 15 and 20 percent.

Per Se, Thomas Keller's ultra-pricey New York restaurant, automatically adds 20 percent to food and beverage price.

At the other end of the spectrum, I recently ate at a popular Los Angeles sushi restaurant, Sugarfish, that automatically adds 16 percent to every bill.

I'm fine with that, although it's not clear to me why these and other restaurants don't simply fold the cost of the service into the total. What's the point of disaggregating the overall dining experience into its component parts, as though we could choose to request the food without the wait service, or vice versa?

As a consumer, of course I want to get the best price for whatever I buy, whether it's a Honda or a hamburger. As a citizen, on the other hand, I want to see all workers fairly and reliably compensated for their labor. The tipping system doesn't guarantee that, and should be scrapped. Restaurants should pay their servers a living wage, and price their meals accordingly. Like most other businesses.

In what could be another sign that America's tipping culture is eroding, it's worth noting that a featured benefit of such new-generation ride services as Uber and Lyft is their no-tipping policy.

Reader Reality Check

Traditional tipping, set-amount tipping, or no tipping at all: Where should we go from here?

This article originally appeared on FrequentFlier.com.

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