Trends in Tips

November 10, 2011

Tips are a way of life for many service industry jobs. In fact, for some jobs tips make up over 50 percent of a worker's total take-home pay. During tough economic times these workers often suffer from a decrease in their tips, both due to a decrease in consumerism and to a decrease in generosity.

This is exactly what we found in our Tipping Study in 2009 – the year after the beginning of The Great Recession, tips on average fell. However, the opposite is often true during good times. Tips rise as consumers feel their budgets loosen, causing both an increase in consumerism and a potential increase in generosity.

Today PayScale released our sixth annual Tipping Study, which highlights over 90 jobs that receive tips, the typical amount of these tips, the percent of total take-home pay from tips and the frequency of tips.

Do you work in a job where pay is dominated by tips and curious about how your pay compares to others like you? Find out with a free PayScale salary report.

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Increased Tips: True for Some, But Not for All

Wages in the service heavy industries, such as restaurants, hotels and casinos, suffered heavily in The Great Recession. This can be seen in our quarterly PayScale Index for the Food Service and Accommodation Industry, where we find pay for full-time workers in this industry is down 2.5 percent from its peak in 2008. This is in nominal terms too. The picture is even bleaker if we combine this with the 3.6 percent inflation rate that occurred over the same time period to see wages in real terms fell over six percent.

However, there are some signs of a recovery as tips in these industries rose over the last year. In our study this year (see the methodology for details), we found tips on average to be up four percent over the previous year. This still does not bring them to their pre-recession levels, but this is the first time in three years we’ve observed an increase. It appears that people once again have room in their budgets to eat out, travel and gamble and to reward the workers who help them have fun with higher tips.

Some examples of jobs which saw a significant increase in tips include: pizza delivery driver (+16 percent), taxi drivers (+32 percent), bellhops (+45 percent), food and beverage managers (+50 percent) and night club general managers (+58 percent).

Even though we observed an increase in tips across the jobs on average and for several individual jobs, not all jobs experienced an increase in tips. Some jobs had roughly the same tips as last year (e.g. bartender, barista, dog walker, fast food worker, gaming dealer, etc.).

Other jobs actually suffered a loss in tips. For example, two jobs on the list experienced a 40 percent decrease in tips this year – hunting and fishing guides and automobile detailers. The good news is less than 15 percent of their total take home pay comes from tips so this decrease doesn’t sting quite as bad as it would for a bartender who receives over 50 percent of their total pay for tips.

Do you wonder whether you’re being tipped enough in your job? When you want powerful salary data and comparisons customized for your exact position or job offer, be sure to build a complete profile by taking PayScale’s full salary survey.

Regards,

Katie Bardaro
Lead Research Analyst, PayScale, Inc.