Tipping takes a dive along with economy, and workers feel the pinch

By JERRY HIRSCH
THE ASSOCIATED PRESS
and CHRISTINA SALERNO
csalerno@modbee.com

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Katina Hearn has been a waitress for almost 20 years, the past two at Skewers Kabob House in Modesto. She's seeing the same trend now that servers experienced during the recession of the early 2000s: people are eating less-expensive dishes and leaving smaller tips.

"It really does affect us," Hearn said about the economic downturn. Servers must claim 8 percent in tips for their taxes at the end of each night. But on some nights, that isn't balancing out because people may tip only 5 percent, Hearn said.

Amid a tottering economy, rising inflation, increasing unemployment and a housing market meltdown, waiters, beauticians and pet groomers report that customers are growing tightfisted.

It is hard to determine just how much people are cutting back on tipping, but the stakes are huge.

The U.S. restaurant industry employs 13.1 million people, making it the nation's third-largest employer, behind the federal government and the health care industry, according to the National Restaurant Association, a trade organization.

Many others work for car washes, nail salons, taxi companies and in other jobs in which tips play a role in their wages.

Jocelyne Aposaga is a hairstylist who relies on tips for about 20 percent of her income. As the economy slumps, she has a new survival plan: Cut tips.

When Aposaga eats out, she leaves servers a buck or two less than last year. It's not the service that's bad, it's the economy -- and a case of what goes around comes around.

"I am just not getting paid as much as I used to. It's not because I am spending more money on gas or other things," said Aposaga, who works in Pasadena.

The slowdown in tips is an- other blow for increasingly squeezed service workers who often don't have much of a cushion to fall back on when times get tough.

Some restaurants are finding ways to soften the blow.

The Fruit Yard in Modesto is assigning fewer servers on nights when business is slow so they still earn the same amount of tips, said manager Teresa Brasil.

"We want to make sure that our employees are happy," Brasil said.

The longtime restaurant has weathered other economic cycles, and Brasil said it isn't unusual for people to tighten their purse strings when times are tough. For example, more people are choosing the salad bar option for dinner, she said, or ordering just an entree dish with no side salad.

Other industries face similar pressures.

Michael Lynn, professor of consumer behavior at the Cornell School of Hotel Administration, estimated that Americans tip $30 billion annually, although he said there have been no good studies on the issue. "But the testimony is that tips go down in bad times," he said.

Mac Brand, a Chicago restaurant consultant, said gratuities represent 30 percent to 60 percent of a server's wages, and even more at upscale eateries.

"There isn't anyone working at a chain or high-end restaurant so they can collect the minimum wage. If the tips don't come in, it's not worth working there," Brand said.

On a typical Saturday night, Brian Best once earned as much as $200 in tips as a server at Bubba Gump Shrimp Co. at Universal CityWalk in Hollywood. Since the fall, Best's tip take has slid to about $120 on a weekend night.

"People just don't have the money. They will go out to eat, but won't tip as much," Best said.

He now receives 10 percent to 15 percent of what his customers spend at the eatery, down from 15 percent to 20 percent before the economy's nose dive.

"I am hanging out a lot less at clubs and bars. I don't have the money," Best said.