Both presidential candidates have promised to eliminate taxes on tips for restaurant workers, a bill that, if passed, could be particularly beneficial for workers in certain states.
“When I take office, I’m not going to tax tips or the people who give them tips,” Trump told union workers at a rally in Las Vegas in June. Harris will continue to make the same promise in August.
A recent analysis by payments platform Square found that the share of restaurant workers’ income in tips varies widely by state.
Wyoming has the highest reliance on tips at 33%. As of September 2024, the average tip on restaurant checks in the Cowboy State was 16.11%, down 0.48% from the previous year, according to data from Square payment terminals.
!function(){“strict use”;window.addEventListener(“message”,(function(a){if(void 0!==a.data[“datawrapper-height”]){var e=document.querySelectorAll(“iframe”);for(var t of a.data[“datawrapper-height”])for(var r=0;r[r].contentWindow===a.source){var i=a.data["datawrapper-height"][t]+"pixel";e[r].style.height=i}}}))}();
Alaska and South Dakota are tied for second place, with tips from restaurant workers accounting for 31% of their income. However, the average restaurant worker in Alaska earns a much higher hourly wage of $16.87, compared to $13.49 in South Dakota, where the cost of living is lower. Similar to Wyoming, tipping rates have declined from 2023 numbers, dropping from 0.13% to 15.66% in Alaska and from 0.16% to 16.56% in South Dakota.
Four Los Angeles-area taco stands robbed at gunpoint, severely assaulted by employees
One might think that West Coast states with high minimum wages, such as California, would be first in the list of regions where tips account for the lowest percentage of income. However, Square found that four states with average hourly wages not far behind the Golden State tied for the top spot at 18%. Nebraska, where the average wage is $14.64, Oklahoma ($11.51), Arkansas ($12.89), and Mississippi ($10.66). ). Tipping rates in Oklahoma only increased last year, with diners giving an average of 0.27% more, Square’s research found.
Nationally, the average worker earns almost 23% of their income in tips, which will rise to 22% by 2023, according to Square.
Pandemic and “Fall Fatigue”
Tipping practices in the U.S. have reached controversial levels during the pandemic, in part because the same preset screen suggests the amount often exceeds 15%. That’s what happened.
“We’re exposed to those apps and screens almost every day when we buy a coffee or a sandwich,” etiquette expert Diane Gottesman, founder of Protocol School in Texas, previously told Nexstar. . “So we have to get used to this form of payment… People think it’s manipulative, they resent it, and it reduces their perception of the service.”
Quick-service restaurants due to the ease of increasing tips, a desire to help service workers as the coronavirus wreaks havoc on the industry, and some feeling an implicit pressure to do so. average tip rose to 22% by April 2020.
As the pandemic dragged on, inflation continued to rise, and the cost of eating out rose, consumers became fed up and the average tip amount began to decline.
By April 2021, the average tip at quick-service restaurants had dropped to 18.6%, according to Square. The average total tip at U.S. restaurants in 2024 was 15.4%, down 0.1% from the previous year.
Meanwhile, inflation is calm overall, but not so much for restaurants.
“Despite easing inflation, restaurants continue to face many operational challenges, including fluctuating food prices, employee retention, and rising labor costs,” Square’s Food and Beverage Division said. director Minh Tai Hu said in the report. “Many restaurants are grappling with how to balance these increased expenses while providing affordable prices to customers.”
Source link
