Andrew Kopplin and his wife Amanda have operated their coffee shop Kopplin’s Coffee in St. Paul, Minnesota for eight years. But they made a big change in January: they swapped the tip jar for a living wage.
A big part of the inspiration for the change came from realizing how unstable Kopplin’s employees were. “They weren’t really disgruntled or anything like that,” he told ThinkProgress. “I was just watching them and realizing…this is a stress we should figure out.” Those who worked Monday mornings were nearly guaranteed to make more tips; those working late on a Friday would probably make less, just because business was slower.
And it didn’t make sense for him to have workers making less during the slower periods anyway. “There’s plenty of work that should be done in the afternoon when not as many people are there,” he noted. Things need to be cleaned; items need to be stocked. “If that doesn’t happen, we’re in trouble,” he said. “That’s not tipped work normally, but it’s necessary work.”
The shop also prides itself in retaining staff and wants to make it even more attractive to stick around. “We’ve been lucky with loyalty… We keep people on average for two years, which is pretty high for coffee shops,” he said proudly. A more stable wage and one that’s easier to live off of can keep people around. That brings the coffee shop benefits, as customers “get to know the baristas who work there, because the baristas stick around for a while.”
He and his wife spent six months running the numbers to make sure that the company could afford to increase pay but that employees would still all make more under the new regime than they had making tips. Then they sat down with employees to see what they thought. “They were like, ‘This is great, we’d love to do this,’” he said. “That was the go point for me, when I had 100 percent employee support.”
The starting wage at the coffee shop is now $12.50 an hour. But he says that most employees are making more because they’ve been working with him for a year or more and they get reviews with the potential for raises every six months.
The change has been positive. “Before, employees were always trying to scrape up enough money to get by,” he said. “Now if I’m working, I don’t have to worry. If you’re working you don’t have to count tips.” He knows this from first-hand experience, as he works behind the counter alongside his employees five days a week. “Tips were big for me too,” he said. “So it was a big shift for me to get paid [without them].”
But it hasn’t come for free for the consumer: To cover the increased cost of labor, the store raised its prices by about 20 percent. He and his wife took potential lost sales with higher prices into account when deciding whether to get rid of tips. But he doesn’t think it’s been a huge disruption for customers. “We’re already a high-end speciality shop, so our prices were already higher,” he said. Plus “for a lot of customers they’re not paying that much different…because they were tossing a dollar in the tip jar anyway.”
Now he says his prices are “honest.” If tipping is optional, he reasons, then why not bake that extra money into the price of the coffee? “If you’re going to be mad at people for not tipping a dollar, just charge them a dollar more,” he said. “This price reflects what coffee costs to make fairly.”
Tipping is such an expected part of the restaurant industry that there’s even a lower minimum wage for those who make gratuity: the federal floor is $2.13 an hour for tipped workers, although some states require them to be paid the same minimum wage as other workers. But Kopplin’s Coffee isn’t the first eatery to think about getting rid of them and paying a higher wage. Restaurants from Pittsburgh to Kentucky to New York to the West Coast have done the same thing, as has a brewpub in Washington, D.C.
Owners have realized that not only does tipping introduce unpredictability into workers’ lives, it doesn’t actually improve the quality of service, which only accounts for a percentage point or so in the difference in tip sizes. Instead, tips have more to do with whether a server is white, female, attractive, or touches a customer on the arm. A server’s need to work for tips can also create an atmosphere that leads to sexual harassment: nearly 80 percent of women in the restaurant industry say they’ve been harassed by a customer.