Article • Dean Baker’s Beat the Press
Fact-based, data-driven research and analysis to advance democratic debate on vital issues shaping people’s lives.
Center for Economic and Policy Research
1611 Connecticut Ave. NW
Suite 400
Washington, DC 20009
Tel: 202-293-5380
Fax: 202-588-1356
https://cepr.net
Catherine Rampell has a nice piece in the Post outlining some of the problems with having workers rely on tips for much of their pay. She comments in passing that because people may underestimate the cost of eating at restaurants they may eat out more often, which would provide a boost to the economy by creating more demand.
If this was really true, then the saving cultists who want people to save more money should all be pushing for an end to tipping. (In an economy where we are faced with inadequate demand, which is certainly true today, less demand would slow growth.) As a practical matter, if people spent less on restaurants it would probably mean for the most part that they spent more on something else, but if this line can get the saving gang to oppose tipping, it’s fine by me.