Tips are less than 20% of restaurant worker pay in Arkansas
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Tips make up an increasingly large share of restaurant workers' pay, per data from the payments company Square.
Why it matters: The rise of tipping culture means that servers and bartenders are getting tipped more frequently for services — like takeout orders — that used to go without gratuities.
By the numbers: In October, tips made up 23% of restaurant worker pay — up from 14% in 2019, according to Square's report, which examines payroll data.
Zoom in: Tips make up about 18.2% of an average restaurant worker's wages in Arkansas, the second lowest in the U.S. behind Oklahoma and Mississippi, which are tied at 18.1%.
- For better or worse, this means workers rely less on tips for their income.
Patrons in the Natural State on average tip just under 16% of their check.
The big picture: The restaurant business fell off a cliff in the pandemic, but it bounced back fast. Americans went back to dining out, and restaurants scrambled to hire, driving up wages and prices.
- In recent months, the industry has seen a slowdown. But overall, restaurants have seen an increase in sales volume over the post-pandemic years that has translated into more customers per hour — and more tips, says Ara Kharazian, research lead at Square.
Reality check: Relying more on tips leaves workers in a more precarious position.
- "If you're a restaurant worker who's already in an industry subject to a lot of ups and downs, a large component of your income coming from tips isn't gonna simplify that," says Kharazian.
Between the lines: One of President-elect Trump's more popular campaign proposals was to eliminate taxes on tips.
- Looking at this data, that would mean exempting nearly a quarter of restaurant workers' income from taxes — a meaningful chunk.
Worth's thought bubble: Like most people, I don't love tipping culture, but try to remember advice a wise person once told me: "I'm pretty fortunate. A few dollars here and there won't break me, but it could be a big deal for that person."