You Really Should Be Tipping.

    I have been working in the service industry for about 2 years, and the other day I was working at Wing Wednesday as a server at Asado. After someone tipped me a fun $0.97, I started thinking about tipping culture in the US and how it relates to our discussion about pressure groups and lobbying.

    Groups like the National Restaurant Association lobby heavily to keep the “tip credit” system intact. They spend millions of dollars in political efforts to maintain the policies that set the federal and state sub-minimum wage for tipped employees. The National Restaurant Association’s lobbying efforts are very successful, with wins in 2023 that stopped legislation in 23 states from overturning the tip wage policy. However, according to Olson, larger groups are often unsuccessful when it comes to applying political pressure because of the free rider problem. Where the National Restaurant Association differs is their implementation of selective incentives in the form of membership benefits. By becoming a member of the group, members are given exclusive access to a team of regulatory experts/lawyers, economic research on the restaurant industry, and member discounts on products and health care. With these selective benefits and a massive eligible base in the nation’s second-largest private sector employer, the National Restaurant Association secures a large amount of funding. They use these resources to out-pressure less organized labor groups and effectively influence governments to maintain sub-minimum wage levels of around $2/hour (that really gets taxed out). So, unless you can out-lobby the NRA, please think twice before you decide not to tip after dining in a restaurant that provides table service.