Tipping Point: How America’s Gratuity System Got Out of Hand

From its shady roots to modern absurdities — why tipping culture in the U.S. needs a serious reckoning

Tipping is important, but where do we draw the line?

You walk up to a counter, order a $4 coffee, and before the barista even starts steaming the milk, a screen flashes: Would you like to tip 15%, 20%, or 25%? No service has happened yet. You haven’t even made eye contact. And yet, here you are — guilt-tipping a machine.

This is the modern American tipping experience — and it's spiraling out of control.

But how did we get here? Why does tipping feel less like a “thank you” and more like a requirement just to keep someone fed? And why is it so wildly different in other parts of the world?

The Shady Origins of Tipping in America 

Tipping didn’t even start in the U.S. It was imported from Europe after the Civil War, mostly by wealthy Americans who had traveled abroad and wanted to mimic aristocratic customs. But Europe eventually moved away from tipping — and the U.S.? We doubled down.

In fact, many U.S. employers, especially in the hospitality and railroad industries, used tipping to justify not paying Black workers a wage. The Pullman Company, for instance, paid porters next to nothing, expecting passengers to tip them instead. This wasn’t a bug in the system — it was a feature designed to keep wages low and exploit labor.

This exploitation turned into a norm that persists today, with entire sectors of our economy relying on tipping to make up for substandard pay. This historical context matters because it reveals that tipping in America was never about generosity—it was about shifting the burden of fair compensation from corporations to customers.

Tipping Today: Coercion Over Courtesy 

Fast forward to 2025: you’re now expected to tip for just about everything — food trucks, self-service kiosks, airport coffee stands, even automated checkout screens. What began as a small courtesy for excellent service has become an expectation embedded into every transaction. The worst part? It's no longer clear who the tip is actually going to.

Tipping was supposed to be about rewarding good service. But now it’s become a corporate loophole — allowing companies to pay workers substandard wages while offloading the moral burden to customers. And the tipping prompts are everywhere. Digital interfaces at takeout windows or cashier stands pressure you to choose a tip before anything even happens. Say no, and you’re left feeling like a bad person.

I’ve personally watched this shift happen over the years. In the early 2000s, tipping was still largely confined to restaurants, bars, and services where someone spent time assisting you directly. Now, I’m confronted with tip screens at smoothie shops, food trucks, or when picking up a simple coffee. Tipping has gone from a spontaneous thank-you to a mandatory toll. It used to feel voluntary. Now it feels inescapable.

And you know we are being modest with this number here. Take a look at your account and tally up tips over the course of a month- you'll easily exceed this number if you don't keep tabs.

The Catch-22 for American Workers

 Here’s the trap: tipped workers in the U.S. can legally be paid as little as $2.13/hour under federal law, as long as tips bring their total up to minimum wage. In theory, if tips don’t add up, the employer is supposed to cover the difference. In practice? That rarely happens without a fight, and many workers simply accept short paychecks rather than risk losing their job.

This system traps millions of workers in financial instability. According to the Economic Policy Institute, tipped workers are more than twice as likely to live in poverty compared to non-tipped workers. That’s not a coincidence. It’s the result of a system that places their entire livelihood in the hands of strangers.

So the customer becomes the safety net. If you don’t tip, the worker suffers. If you do tip, the company gets away with underpaying its staff. That’s not generosity — it’s corporate hostage-taking. You can’t win.

Meanwhile in Europe: A Different Model 

Traveling through Europe recently, I was shocked by how different the experience was. In Spain, Italy, and even Eastern Europe, you’re not expected to tip. If service is good, you can leave a euro or two — maybe 5 euros for a big meal or fantastic service. But there is no social pressure, no payment screen guilting you into percentages. The culture around it is different because the economics are different.

That’s because workers in Europe are paid living wages. Bartenders, baristas, and waiters don’t rely on the whims of customer generosity to make ends meet. Their dignity is baked into their paycheck. And guess what? The service was just as good, if not better, because it wasn’t based on performance anxiety. They were professionals, not performers.

This blew my mind because it highlighted how manipulated we've been in the U.S. We've been taught that tipping is "supporting the little guy," but in reality, it's covering for the big guy — the company cutting corners on labor costs.

Corporate Greed: The Real Beneficiary of Tipping Culture 

At the heart of it all is corporate greed. The reason tipping has become so embedded in the U.S. economy isn’t because it benefits workers — it's because it saves corporations billions in wages.

By shifting the responsibility of fair pay to the consumer, businesses avoid paying taxes on higher wages, dodge healthcare benefits, and lower their labor costs. It's no coincidence that tipping prompts exploded in popularity alongside the rise of point-of-sale tablets like Square — tools that let employers install tipping prompts without changing anything about employee pay.

As inflation rises and wages stagnate, tipping is now a tool to guilt customers into plugging the income gap. In 2022 alone, U.S. consumers tipped over $61.6 billion, according to Square's internal data. That’s not a thank-you. That’s a bailout for companies that refuse to pay their workers fairly.

And as corporations rake in profits, they ask you to leave a few extra dollars to support someone else's rent.

My boss makes a dollar, I make a dime. And don't get me started on the overtime.

So What Can We Do About It? 

The solution isn’t to stop tipping. That only punishes workers stuck in a system they didn’t build. But we can push for systemic change:

• Raise the federal minimum wage for all workers, regardless of tips.

• Push states and cities to eliminate the tipped wage system entirely (like California and Washington have).

• Support businesses that pay a living wage and don’t rely on guilt-based tipping models.

• Call out the absurdity when a touchscreen asks you to tip before you’ve even been served.

  
  

For Gen Z, especially, there’s unique power in how we consume and engage. Start by being intentional with your spending. If you have to tip, tip generously to the worker (I suggest carrying cash for tips, and handling it directly to the employee you want to receive the tip) — but make it known to the business (via reviews, surveys, or conversations) that they should be paying livable wages.

Refuse to feel guilted by tip prompts where no service has yet been rendered. Normalize saying "no" to tipping screens at checkout counters where you’re doing all the work. Post about it. Make it a conversation.

Use your platforms — TikTok, Instagram, YouTube — to raise awareness and call out corporate exploitation. Champion businesses that treat their workers fairly, and don’t be afraid to highlight the ones that don't.

Call to Action on Unionizing: Another powerful tool is unionizing. When workers organize collectively, they gain the ability to negotiate better base pay, demand transparent policies, and eliminate dependence on inconsistent tips. Supporting union efforts — or starting one — is one of the most direct ways to reclaim power from corporations and push for lasting wage equity.

And if you're entrepreneurial? Build better. Start ventures that pay fairly and proudly don’t rely on tips to cover labor costs. Culture shifts begin when individuals change behavior and amplify the message. Gen Z can set the tone for a more ethical, transparent, and worker-first economy.

This isn’t about being cheap. It’s about being fair.

Closing Thoughts: Tipping was never supposed to be the foundation of someone’s paycheck. It was meant to be a bonus — a gesture of gratitude for great service. But in America, it’s become a twisted shell game. The more we tip, the more employers lean on that generosity to avoid their basic responsibilities.

It’s time we stop pretending this is normal. It’s time to rebuild a system where people are paid what they’re worth — and tipping goes back to being a choice, not a survival tax.