PayScale Releases Fourth Annual Year-End Tipping Study

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Developed in conjunction with Cornell University, new study confirms that the recession has slashed workers' tip earnings by as much as 50 percent.

It's no news that 2009 has been an extraordinarily hard year for millions of Americans

PayScale, Inc., the world's largest database of individual employee compensation profiles, today released its fourth annual year-end tipping study. This year's analysis was developed in partnership with the Cornell University School of Hotel Administration.

With the nation struggling to emerge from the recession and the current underemployment rate at a post-Depression record of 17.5 percent, the PayScale study shows that tip earnings have been slashed by as much as 50 percent in some jobs. Even the lucky ones who are still employed have seen their salary, including tips, reduced by 10 percent or more.

As the economy sputters, hours worked and wage increases have slowed precipitously, so gratuities are even more crucial to the financial survival of millions of workers in the United States.

"It's no news that 2009 has been an extraordinarily hard year for millions of Americans," says Al Lee, Director of Quantitative Analysis at PayScale. "But one of the saddest economic stories is that job insecurity for the majority of Americans has translated into fewer and/or smaller tips for those whose financial survival depends on these gratuities."

As in the past, the professions relying most heavily on tips are in the restaurant and hospitality business, which has been especially vulnerable to the economic downturn.

In the hotel industry, housekeepers and concierges earn the lowest median hourly tips, while bellhops and hotel floor managers come out on top. In the restaurant industry, fast food workers are on the bottom: they earn the lowest median hourly tips ($0.50) and the lowest typical total hourly income ($7.80).

"Unfortunately, workers in the restaurant and hospitality industry are taking a tremendous hit during this economic struggle," says Mike Lynn, Professor of Consumer Behavior at Cornell's School of Hotel Administration. "Tips are essential for these people to make a living wage, and the half-empty wallets we're seeing are causing tremendous pain."

Once again, the comprehensive PayScale tipping study provides data that includes: Typical Hours (full-time, part-time, and limited time); Median Hourly Tips; Median Base Hourly Pay; Total Typical Hourly Income; Percent of Total Hourly Income from Tips; and the Frequency of Workers Reporting Being Tipped. ( ) is the leading online provider of employee compensation data. With the world's largest database of individual compensation profiles, PayScale provides an immediate and precise snapshot of current market salaries to employees and employers. PayScale's patent-pending, real-time profiling technology collects and indexes employee pay attributes worldwide and makes this compensation data available through its online salary tools and salary benchmarking reports. PayScale was founded in 2002 and is headquartered in Seattle.


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Steven Gottlieb
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