💵 Economics and policy · Beginner · Policy resolution

Resolved: Restaurants in the United States should replace tipping with service-included prices.

In most American restaurants, a large part of a server's pay comes from tips. Some restaurants have tried raising menu prices and ending tips instead. Which way is better for workers and diners?

Background

Under federal law, an employer may pay a tipped worker a cash wage as low as $2.13 an hour, as long as tips bring the worker up to the federal minimum wage of $7.25; if they don’t, the employer must make up the difference. States set their own rules. As of July 2026, the U.S. Department of Labor lists seven states (Alaska, California, Minnesota, Montana, Nevada, Oregon and Washington) that require the full state minimum wage before tips. [1]

Cornell professor Michael Lynn, who has studied tipping for decades, found that tip percentages are only weakly related to how customers rate the service. In 2015, Union Square Hospitality Group, a well-known New York restaurant company, ended tipping and raised menu prices, partly so kitchen workers could share in the money. It brought tipping back in 2020, when the pandemic cut restaurant sales. Lynn’s research found that some restaurants that dropped tipping saw their online service ratings fall, more so when they added a service charge than when they raised menu prices. [2][3][4]

Where the facts themselves are disputed

Would servers earn more or less without tips?

  • At busy full-service restaurants, servers often earn more from tips than most restaurants could pay in wages, so many would earn less.
  • Supporters reply that tips swing from shift to shift and restaurant to restaurant, and that servers at slower restaurants, and kitchen workers who get few or no tips, could earn more and more steadily.

Key terms

Tip credit
The part of the minimum wage that an employer may count from tips instead of paying in cash wages. Under federal law, up to $5.12 an hour.
Service-included pricing
Menu prices that already include the cost of service, so no tip is expected. Sometimes called “hospitality included.”
Service charge
A set percentage added to the bill by the restaurant. Unlike a tip, it isn’t voluntary and belongs to the restaurant, which decides how to pay it out.
Front of house / back of house
Restaurant workers who serve guests (servers, bartenders, hosts) and those who work out of sight (cooks, dishwashers).

Both sides at their strongest

Each argument is written the way its best advocates would make it, followed by the strongest answer from the other side. Use them to build your case and to prepare for the other one.

Affirmative

Service-included prices give workers steady pay, share it more fairly, and show diners the real price.

  1. A1 Workers deserve steady, predictable pay.

    Why Tips rise and fall with the weather, the shift and the mood of each table. A wage built into prices lets workers plan rent and bills.

    Evidence Studies of earnings volatility among tipped workers; the Economic Policy Institute’s comparison of poverty rates for tipped workers in states with different tipped wages (2014).

    Best answer The negative answers that steady pay can also be lower pay; many servers would trade higher average earnings for steadiness only if the total were the same.

  2. A2 Tips don’t measure service well.

    Why If tips barely track how good the service was, they don’t reward good work. They mostly reflect things the server doesn’t control, like the size of the bill and the customer’s habits.

    Evidence Michael Lynn’s research at Cornell finding tip percentages are only weakly related to customers’ ratings of service.

    Best answer The negative replies that even a weak link is some link, and servers still have a reason to be attentive, which a flat wage doesn’t give.

  3. A3 Kitchen workers are left out.

    Why Cooks and dishwashers help make every meal but usually share little of the tips. Building service into prices lets the restaurant pay the whole team.

    Evidence Union Square Hospitality Group’s stated reason for its 2015 policy: back-of-house workers couldn’t share in guests’ generosity.

    Best answer The negative points out that the same company brought tipping back in 2020, and that tip pools already let restaurants share tips more widely in many states.

  4. A4 Diners should see the real price.

    Why A menu that lists $15 when the meal costs about $18 after the tip makes prices harder to compare. Most countries print the full price.

    Evidence Consumer surveys on frustration with tipping requests; restaurant pricing practices in countries without tipping.

    Best answer The negative replies that American diners are used to tipping and know to add it, and that higher menu prices can drive them to competitors who still list lower prices.

Negative

Tipping lets diners reward service, lets skilled servers earn well, and keeps menu prices low.

  1. N1 Many servers earn more with tips.

    Why At busy restaurants, tips can add up to more per hour than a restaurant could afford in wages. Ending tips would cut pay for the workers the policy aims to help.

    Evidence Lynn’s 2018 interview giving New York server earnings of about $25 to $30 an hour, well above cooks’ pay; surveys of servers’ views on tipping.

    Best answer The affirmative answers that those figures describe busy city restaurants; across the country, tipped workers in states with low cash wages have higher poverty rates.

  2. N2 Higher menu prices hurt restaurants.

    Why When one restaurant raises its menu prices 20 percent and the place next door doesn’t, diners see the first as more expensive, even if the total bill is the same.

    Evidence Lynn’s research on restaurants that ended tipping, including falling online service ratings; restaurants that tried and dropped no-tipping policies.

    Best answer The affirmative replies that the problem fades if all restaurants change together, which is what the resolution asks.

  3. N3 Diners like having a say.

    Why Tipping lets a customer reward a server who went out of the way and hold back for poor service. A fixed price takes that choice away.

    Evidence Consumer surveys on tipping, such as those summarized by Lynn and Withiam, including a 1998 reader survey in which most preferred to choose their own tip over an automatic charge.

    Best answer The affirmative answers that the same research found a majority favored guaranteed server wages, and that a choice that barely tracks service isn’t much of a reward.

  4. N4 Tips keep labor costs flexible for small restaurants.

    Why Restaurants run on thin margins. When pay rises and falls with sales, a slow month doesn’t sink the business, which protects jobs.

    Evidence Industry data on restaurant profit margins; reports from restaurant owners about the cost of moving to higher wages.

    Best answer The affirmative replies that this shifts business risk onto workers, who then carry the slow months instead of the owner.

Strawman or steelman?

A strawman is a weak copy of the other side’s view, easy to knock down and unfair to the people who hold it. A steelman is that view at its strongest. Answer the steelman, and you’ve answered the real argument. (More on steelmanning.)

Affirmative

Strawman “They want to take money away from servers.”

Why it’s unfair Supporters want pay to be steadier and shared more fairly, and many expect wages to make up for lost tips.

Steelman Tips barely track service, swing from shift to shift and leave kitchen workers out; building service into prices gives the whole staff steady pay and shows diners the real price.

Negative

Strawman “They just want restaurants to pay workers less.”

Why it’s unfair Defenders of tipping often argue that tips let skilled servers earn more than wages would.

Steelman At many restaurants tips pay servers more than wages could, keep menu prices competitive and let diners reward good service.

Weak arguments to avoid

Affirmative

  • “Tipping is un-American.” Tipping has been common in the United States for more than a century; argue about pay and prices, not labels.

Negative

  • “If servers wanted more money, they’d get another job.” It dodges the question of which pay system works better, and the same could be said of any job.

Questions for cross-examination

Ask the Affirmative

  1. How much would menu prices have to rise to replace tips?
  2. What happens to a server who earns more from tips today than the new wage?
  3. Why did some restaurants that tried this go back to tipping?

Ask the Negative

  1. How should a cook or dishwasher share in a good night?
  2. If tips barely track service, what are they rewarding?
  3. What happens to a server’s rent payment after a slow week?

Reading on both sides

Read at least one source from each side before you debate. Look up each source’s author and publisher too: who wrote it is part of the evidence.

Background and overviews

Both sides in one place

Mostly Affirmative

Mostly Negative

Practice this topic

Sources for the background

  1. Minimum Wages for Tipped Employees, U.S. Department of Labor, Wage and Hour Division (2026-07-01). Accessed 2026-10-25.
  2. Studying the attitudes of gratitude that affect gratuities, Cornell Chronicle (2000-08-16). Accessed 2026-10-25.
  3. Should We Abandon Tipping? Here's What Would Happen, eCornell (2018-01-04). Accessed 2026-10-25.
  4. Danny Meyer Brings Back Tipping at His Restaurants, Wine Spectator (2020-07-23). Accessed 2026-10-25.

Teddy Rook Book doesn’t take a side on this resolution. Updated 2026-10-25.

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