Banning Restaurant Tipping

Welcome back to Middle Ground; this is the fourteenth newsletter of our 28 policies in the 28-day series ahead of the 2025 Ontario provincial election.

Today’s issue will be discussing tipping.

What is the history of tipping?

Tipping in North America is a practice that has its roots in slavery. While tipping has existed since the Middle Ages in Europe, it was a form of compensation (similar to a bonus) offered to a servant who performed a job exceptionally well. In North America, the practice was not used until after the US Civil War when an influx of recently freed black workers began serving in positions such as waiters, barbers and porters. Many of these employers did not want to offer a fixed wage, so these industries began offering jobs with $0 salary but the expectation that guests would tip if work was done well. 

The fundamental purpose of tipping was not to reward hard work but to allow employers to avoid paying their workers. This has remained true throughout most of North America, with only a few sub-national jurisdictions (such as Ontario) passing laws to guarantee minimum wage salaries for all workers. 

Why should we get rid of tipping?

In addition to its troubling history, tipping has an inverse impact on consumers. For many, it can be challenging to gauge the cost of services when the listed prices don’t include gratuity and taxes. Looking at a $100 restaurant bill, after taxes and gratuity, this bill could be $133, a 33% increase (13% tax, 20% tip). 

If tipping were removed, consumers would have more incentive to visit restaurants, knowing that the advertised price is the price they will need to pay. This can increase business for restaurants, helping to support local economies. 

Does tipping create inequity?

Another serious problem with tips is the numerous types of inequity that it create:

1. For servers that are paid minimum wage (like in Ontario), a CBC study showed that 60% of restaurants keep the tips and don’t give them to servers. This means that your tip isn’t going where you expect it to in most cases. 

2. A Cornell research paper showed that tips are often used as a measure of hard work, motivation and effectiveness for waiters. This means that employers will make hiring/firing decisions based on tips despite the same survey showing that there is little correlation between job performance and tips. 

3. For those working minimum wage jobs outside of the restaurant industry without the potential of earning tips, the practice can unfairly lower their comparative wage. Tipping punishes them directly (as they need to tip when going out) and indirectly (through general inflation attributable to higher wages for restaurant workers).

If you learned anything from this newsletter, forward it to one person who would benefit from these insights.

Liam Gill