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The Moneyist: ‘I don’t believe servers should make $50 an hour. They get paid as much as nurses!’ If a waiter is making $15 an hour in California, do I really need to tip 20%?

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Dear Quentin,

My wife and I had an argument over tipping a server. Can you help resolve it? It’s turned into a bit of an issue. In California, servers make right under $14 an hour in restaurants with fewer than 25 employees and $15 an hour in restaurants with over 25 employees. So long gone are the days when they were paid $3 or less an hour. 

I tip over $20 on a $100 bill, but my argument is the standard tip should no longer be 20% on the bill — even before tax. It should be lower than that because the average servers now fall in the group of making a good hourly rate. I don’t believe servers should make $50 an hour. They get paid as much as nurses!

I understand that they don’t always make that much, but I do tip so I guess I am griping. Should I be less generous?

Still Tipping

Dear Tipping,

I’m on your wife’s side. Whenever any of us ask ourselves if we should err on the side of generosity, if we can afford it, the answer should be yes. If you don’t want to tip, stay home and cook some spaghetti with tomatoes, onions, garlic, spinach and feta cheese (it’s delicious). 

If you do want to tip, enjoy a meal out, and tip the server between 15% and 20%. Most people tip at the higher end of that range, studies show, and people in their mid-30s to mid-50s tend to be more generous to their servers, likely because they are at the peak of their earning potential.

I’m not sold on restricting tipping based on the contributions servers make to society versus other professions. Teachers and nurses and carers are dramatically underpaid in America. Lawyers, hedge-fund managers and CEOs are, arguably, grossly overpaid. 

“Why should I pay for poor service?” people cry. Most servers are on their feet for eight or more hours a day, but they are smiling and nodding, and graciously overlooking the bad behavior of patrons. “What about factory workers?” they add. Yes, they work hard and are on their feet too.

“‘What-aboutism is a sliding scale of apples and pork chops.’”

As a member of the Moneyist Facebook Group wrote: “It’s a physically demanding job just like anything else. Do you question what your real estate agent makes on a sale? Or how about what your dental hygienist makes? Or the plumber? Or the teller at the bank?”

“It’s a silly argument,” they wrote. “Almost a socialist argument if you think it should be based on some sort of sliding scale of fairness. They’re doing a job. If they do it well and the acceptable norm is to tip, tip them.” What-aboutism is a sliding scale of apples and pork chops.

Direct your ire at the most powerful in society — not the person taking your order. The average CEO at the biggest 350 U.S. companies is paid $17 million a year, and their pay soared 940% over four decades, the Economic Policy Institute, a progressive think tank, said. 

“Exorbitant CEO pay is a major contributor to rising inequality that we could safely do away with,” the EPI said in a report last year. “CEOs are getting more because of their power to set pay, not because they are increasing productivity or possess specific, high-demand skills.

“‘Direct your ire at the most powerful in society.’”

Nurses in general medical and surgical offices earn a median annual salary of $85,000 in the U.S., according to the Bureau of Labor Statistics. Compare that to less than $29,000 a year for servers who are on the frontlines of wild swings in the moods of the general public. 

Even if servers in California were making exactly the same wage as another profession that you hold in higher regard, that does not take into account vacation time, health insurance and other benefits. Service staff, nurses and doctors, as the pandemic illustrated, should all be celebrated.

Finally, people working in Silicon Valley are fleeing California because it’s an expensive place to live. The median sale price of homes in California in May was $818,260, according to the California Association of Realtors, up from $700,000 just seven months earlier.

Wages for servers vary by state, as you say, and also by restaurant and by time of day. Service staff were also among the hardest-hit workers during the COVID-19 pandemic. They don’t need your sympathy or your judgment, nor mine, but they do need every bit of help they can get.

Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

The Moneyist regrets he cannot reply to questions individually.

By emailing your questions, you agree to having them published anonymously on MarketWatch. By submitting your story to Dow Jones & Company, the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.

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