May 13, 2008
Times are tough if you work for tips

Yet another story in the Chron about the effect of the bad economy and higher prices on ordinary Americans.

Amid a tottering economy, rising inflation, increasing unemployment and a housing market meltdown, waiters, beauticians and pet groomers report that customers are growing tightfisted.

It is hard to determine just how much people are cutting back on tipping, but the stakes are huge.

The restaurant industry in the U.S. employs 13.1 million people, making it the nation's third-largest employer, behind the federal government and the health-care industry, according to the National Restaurant Association, a trade organization.

Many others work for carwashes, nail salons, taxi companies and in other jobs in which tips play a role in their wages.

The slowdown in tips is another blow for increasingly squeezed service workers who often don't have much of a cushion to fall back on when times get tough. Some restaurants have closed in recent months or have begun scaling back and laying off employees.


On a typical Saturday night, Brian Best once earned as much as $200 in tips as a server at Bubba Gump Shrimp Co. at Universal CityWalk in Hollywood. Since the fall, Best's tip take has slid to about $120 on a weekend night.

"People just don't have the money. They will go out to eat, but won't tip as much," Best said.

He now receives 10 percent to 15 percent of what his customers spend at the eatery, down from 15 percent to 20 percent before the economy's nose dive.

"I am hanging out a lot less at clubs and bars. I don't have the money," Best said.

Remember the "Trickle-Down Effect"? It would seem to be at play here. I just hope we all can hold on till January 21, because we're not going to get any help before then.

Posted by Charles Kuffner on May 13, 2008 to Bidness