Finance Xpress

It’s an acutely haphazard way of paying workers, and yet it keeps expanding. We dig into the data to find out why.

Listen and subscribe to our podcast at Apple Podcasts, Stitcher, or elsewhere. Below is a transcript of the episode, edited for readability. For more information on the people and ideas in the episode, see the links at the bottom of this post.

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Time for a riddle. Name something that many people say they dislike, and yet they do it all the time. Something that many people consider a tax, and others see as a form of altruism. Something that almost always happens in many circumstances and yet, in many similar circumstances, never happens.

Danny MEYER: Everybody, practically, leaves a tip in a full-service restaurant. Nobody leaves a tip when they go to McDonald’s.

Today on Freakonomics Radio: we wade back into the tipping wars. We discuss the lessons learned when one gigantic company that didn’t used to have tipping changed its mind.

John LIST: There’s a lot of social pressure to give a tip in that situation.

What happens when a famous restaurateur goes the opposite direction, and gets rid of tipping.

MEYER: I think the biggest thing we’ve learned is that this is really tough.

And why tipping — as controversial is it may be — isn’t likely to go away.

Michael LYNN: They’re wrong when they say that, but they believe it.

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Let’s begin with some history. Courtesy of John List, an economist at the University of Chicago.

LIST: Some people argue that tipping goes all the way back to the Roman era. And some argue that it was the 17th century in England. But either way, tipping ended up coming to the U.S., roughly, in the 18th century. And there was actually a lot of resistance. So you had people like Mark Twain saying, “we pay that tax knowing it to be unjust and an extortion.” And you had The New York Times, in 1897, writing that tipping was the “vilest of imported vices.” And even in 1915, in America, there were actually six states that abolished tipping. And they abolished it because they viewed it sort of like Twain did, as kind of a social-pressure way to extort money.

Uri GNEEZY: Tipping is one of the most interesting behaviors that we have, right?

And that is Uri Gneezy. He’s an economist at the University of California, San Diego.

GNEEZY: I sometimes tip when I go to my coffee place in the morning. I always tip at the restaurant. I never tip in McDonald’s. So why is it that it’s so different for me?

So you can see why economists would find tipping to be a topic worthy of their inspection.

GNEEZY: It’s really a very strange behavior and we seem to be acting according to some kind of norms. And these norms are very hard to follow.

LIST: The social norms around tipping in the United States — it’s like no other that I’ve ever witnessed.

It’s estimated that tipping in America adds up to at least $40 billion a year. That is larger than the entire health-and-fitness industry; it’s double the annual budget for NASA. Forty billion dollars is a lot of money, especially when you consider that tipping is optional. But of course in some cases — restaurants, particularly — it’s not really optional. If you try to not leave a tip of at least 15 or 20 percent in a full-service restaurant, you may well be told, quite directly, just how not optional tipping is.

There are more than two-and-a-half million waiters and waitresses in the United States; they are often paid below minimum wage, in which case the bulk of their pay comes from tips. Most of us are accustomed to this. Others think it’s strange that restaurants — rather than paying employees a set wage, as most industries do — instead pass along their labors costs to customers in the form of a quasi-voluntary tax. Yes, it is a way to keep menu prices low — but it’s a weird custom, don’t you think?

And once you look more closely, you’ll see there are a lot of weird things about tipping. Why, for instance, is it now customary for casual restaurants and coffee shops even to ask for tips on takeout orders? Or think about going to a nice hotel. A porter carries your suitcases to the room; it takes about two minutes, and that’s his job — and yet we usually tip him, even though he doesn’t ask. Now think about the person who cleans your hotel room. There’s often a little envelope in the room to leave a tip for the housekeeper. Do you know how often that envelope is used? One study that was conducted in an “upscale, independent” hotel showed that for every 100 nights spent there, tips were left on just five of those nights! And cleaning your room takes a lot longer than the two minutes to carry your bag. It also means dealing with the mess you left behind.

So why does the housekeeper not get a tip, while the porter does? A couple possible answers: the housekeeper is usually a woman and the porter a man; probably more important, she’s invisible; he’s standing right there in front of you. Still, it’s weird. Here’s another weird one: why is it that you’re always expected to tip a taxi driver but, when you use a car-service app like Uber, you’re not? Oh, hang on. That’s how it used to be. But if you use Uber, you’ve noticed that now you are asked, after the trip, if you’d like to tip. Would you like to know one of the people who made that happen?

LIST: My name is John List.

Who, you’ll remember, is—

LIST: I’m a professor of economics at the University of Chicago.

But also:

LIST: I am also the chief economist at Lyft.

DUBNER: Now, I understand you used to be the chief economist at Uber.

LIST: That’s correct. I was a chief economist at Uber for nearly two years. And I decided to move over to Lyft and do similar work at Lyft.

There’s one more thing you need to know about John List, and his friend Uri Gneezy. They both love to run huge experiments out in the real world. Economists didn’t use to do this. If they ran any experiments at all, they were likely to be small lab experiments, the kind often run by psychologists.

GNEEZY: You can learn a lot from this, but it’s limited.

Limited in that your research subjects are likely to be a few dozen undergraduates, making artificial choices in an artificial environment. Big field experiments, meanwhile: the new breed of economist sees this as a great way to gather meaningful data. The most recent Nobel Prize for economics went to three economists — Abhijit Banerjee, Esther Duflo, and Michael Kremer — for using real-world experiments to address poverty. A lot of people in the field say it won’t be long before John List gets his Nobel Prize. Here are some of the questions he’s tried to answer by running big field experiments:

LIST: Why do people discriminate against one another? Why do women earn less pay than men in labor markets? How do we convince people to pay their taxes on time?

So it’s not very surprising that John List, when he was working at Uber, would try to cook up an interesting experiment. And what’s more interesting than tipping?

LIST: Even though it does have a spotty history, when you think about the potential economic incentives of tipping, it actually presents an interesting way to induce higher quality amongst your workers, your drivers, your contractors.

In other words: a tip is an incentive for better service. That’s always been the main argument for why we tip the servers in restaurants. Here’s Danny Meyer.

MEYER: I’m the founder of Union Square Hospitality Group.

Meyer is one of the most successful and prolific restaurateurs in New York.

MEYER: We have nine full-service restaurants and then an enormous number of cafes, whether they’re in ballparks or museums or theaters.

He’s also the man behind the global hamburger chain Shake Shack.

MEYER: Correct. We created Shake Shack, but it’s now a public company, and I remain the chairman of the board.

Meyer is a zealot for great customer service — he likes to say his business is hospitality as much as it’s food. But he does not like the idea of tipping as a means to induce hospitality.

MEYER: The theory has always been, in the tipping system, that the only way I could possibly get someone to be nice to me or to bring my food promptly is to create a scenario in which they know that I will either punish them if they don’t or reward them if they do.

So that’s another weird thing about tipping. There’s also this uncomfortable fact:

LYNN: It’s discriminatory.

That’s Michael Lynn. He is a social psychologist at Cornell, and one of the world’s pre-eminent scholars on tipping.

LYNN: Both groups, blacks and whites, will tip a white server more than a black server. And that’s even controlling for perceptions of service quality.

Lynn’s research shows that tipping is an unfair way for workers to be paid, because personal characteristics like a server’s race, gender, and appearance factor too much into customers’ tipping decisions. We interviewed Lynn several years ago for an episode called “Should Tipping Be Banned?”

LYNN: I think I would outlaw it. You could make the argument that tipping is a condition of employment that has an adverse impact on a protected class. And the Supreme Court has ruled that even neutral business practices that are not intended to discriminate, if they have the effect of adversely impacting a protected class, are illegal.

So there’s yet another reason to dislike tipping. You’d think, therefore, that the last thing you’d want to do is to introduce tipping into a business that seemed to be getting along fine without it — a business like Uber. As I’m guessing you know, Uber was one of the most successful startups in history. Before it went public this year, the company was valued at more than $80 billion. Its stock price has since fallen. But, still: a massive company, and a controversial one too. Its founding C.E.O., Travis Kalanick, was forced to resign after a series of acts unbecoming a C.E.O. Another Uber controversy: its drivers, who are independent contractors and not employees, often don’t make much money. So John List, when he was chief economist at Uber, he saw an opportunity.

LIST: Prior to 2017, you know, Uber did not have in-app tipping on the platform. You might have had some situations where people were giving cash tips, but it was something that did not go through the Uber platform.

Actually, List saw two opportunities: to give Uber drivers a chance to earn more money, and to run a huge field experiment on tipping. There was one big obstacle: Travis Kalanick, the company’s CEO. How did he feel about tipping?

LIST: Travis had a pretty strong intuition that was a little bit like Mark Twain. He viewed it more as a tax or an increase in price, because he felt that everyone would feel compelled to tip, because it will become a social norm.

We should note that Lyft, Uber’s biggest rival, did allow drivers to be tipped, to reward good service.

LIST: Travis was fine with rewarding great service, but he wasn’t fine with social pressure leading to people transferring some money to another person. So really our first job was to assuage Travis.

Assuage him that tipping on Uber would be truly optional, and not a social-pressurized default option.

LIST: He made arguments that, look, if say 10 to 20 percent of people tip on the Uber app, then I’m going to consider that a win. So we went back to the drawing board and said, “Okay, what do we need to do to make sure that tipping on the Uber app does not become the social norm?” in that we can get roughly 10 to 20 percent of people to tip.

DUBNER: In other words, that was your target? You weren’t going for 50, 100 percent?

LIST: No. Our goal originally was to make sure that this was not a price increase, and loosely, that meant 10 to 20 percent of the rides.

DUBNER: And if it got much higher than that, it would just be a tax, is that the idea?

LIST: That’s correct.

DUBNER: And I’d like to know — especially because in many cases, workers receive tips because their employers don’t pay them enough, and in some cases, employers have been known to take a cut of those tips — what share of the tip in this case, if any, goes to Uber itself, or does it all go to the driver?

LIST: So the entire tip goes directly to the driver. Uber or Lyft, neither of them take a commission on the tip.

So John List, along with Uri Gneezy and two more economists — Bharat Chandar and Ian Muir — turned the sprawling Uber ecosystem into a gigantic tipping experiment. How gigantic was it?

LIST: So in total, we have over 40 million observations of people.

GNEEZY: All ages, all ethnicities, all income levels almost, all over the country — not knowing that they are taking part in an experiment.

LIST: And of those 40 million observations, we have roughly 800,000 drivers in our experiment.

So how did List, Gneezy, and their fellow researchers set up tipping on the Uber app? Remember, they were directed to not make it automatic.

LIST: Okay, we need to separate the act of tipping in space and time from the actual trip.

And that’s important, why?

LIST: If you take a taxicab trip, the person turns around and you give them the fare. And then 90 to 95 percent of people add a tip on it. It’s face-to-face, there’s a social norm. There’s a lot of social pressure to give a tip in that situation.

So here’s how Uber tipping was set up. The app generally wouldn’t give a passenger the option to tip until they were out of the car, and until the driver had given the passenger a rating — which the passenger doesn’t see, by the way. So neither the rating nor the tip would be contingent on each other, which meant no quid pro quo. Especially because, unlike a waiter or waitress in your favorite restaurant, the odds are you will never see that Uber driver again.

LIST: The fact is that very few people meet twice.

In the biggest cities where Uber operates, there is a less-than-one-percent chance that the same driver and rider will ever be matched up twice. So: Uber tipping is presumably not about social pressure, or reciprocity, or extortion. Instead, it’s supposed to represent true appreciation, in monetary form, of good service. So how appreciative are Uber passengers?

LIST: So a first fact from our data is that roughly 15 to 16 percent of Uber rides are actually tipped.

Think about that for a second. That’s about 1 of every 6 rides that get tipped, versus about 6 of every 6 restaurant meals. So: not great news for Uber drivers thinking they’d be raking in tip money. But good news for John List and Uber — who, remember, were shooting for a 10 to 20 percent tipping rate. Now, let’s get into what List learned about the tippers. There are three categories here: passengers who always tip.

LIST: Only 1 percent of people tip on every trip.

There are people who never tip.

LIST: That’s actually 60 percent of people — six-zero percent of people — never tip once.

DUBNER: So that leaves 39 percent who sometimes tip, yes?

LIST: Exactly. You’re talking about people who are tipping one out of eight times.

Okay, so 1 percent of Uber passengers treat the ride like a restaurant meal, automatically adding a tip. 60 percent are saying, “Um, no thank you, I’ve already paid for the ride, so I’m going to not give you more of my money” — which, if you’re even a little bit anti-tipping in general, sounds pretty sensible. But then 39 percent of passengers tipped occasionally. Does that mean that Uber successfully made tipping about exceptional service?

LIST: So one of the most surprising results is that when you look at the data pattern, it’s actually the rider variables that are roughly three times more important than the driver variables.

Let’s translate what List said out of economist-speak. What he means is that the biggest factor in whether a passenger tips is simply what kind of person the passenger is. That is a bigger determinant than the driver or the car itself or the route.

LIST: So if I unpack that a little bit, the first thing you can think about is the star rating.

Remember, just as Uber passengers can rate drivers, Uber drivers also rate passengers.

LIST: The riders who have a five-star rating, they’re more than twice as likely to tip than riders who have a 4.75 rating.

And what kind of passenger has five stars?

LIST: They’re punctual, or they’re nice in the car, they’re giving respect to the driver.

Okay, and these five-star passengers happen to be the same people who are most likely to tip every time. In other words: they’re just wonderful people! But, there aren’t that many of them — just 1 percent of Uber riders. So who are these generous souls? What kind of person is most likely to tip an Uber driver? For starters, they’re most likely to be male.

LIST: A man is about 19 percent more likely to tip than a female rider.

That’s an interesting finding — especially because it’s the opposite of what John List’s own research shows about charitable giving.

LIST: Women consistently, across the entire distribution, give more money to charities than men do.

And why is Uber tipping so different?

LIST: My intuition is it’s because this is anonymous. The world of charitable giving tends to have a lot of social pressure. And what the literature also has taught us is that women are much more likely to change their behavior in the face of social cues. My intuition would be, if you looked at tipping to taxicab drivers or restaurants, that the difference would not be as stark, and women might even tip a little bit more, conditional on having the same income levels as men in those cases.

DUBNER: Now, to what degree, if any, are you able to control for income of the riders in your study? It may be that the men are wealthier, yes?

LIST: What we do find is that riders from lower-income areas tend to tip less than riders from higher-income areas. But even after we correct or adjust for those income-area differences, we still find that men do tip more than women.

DUBNER: You also write that tips tend to be higher during very early morning hours, between 3:00 a.m. and 5:00 a.m., and that these hours have a disproportionate percentage of airport and business trips. What it calls to mind to me is, those trips may be being expensed and may not be coming out-of-pocket, and maybe people are more generous with tipping if it’s not their own money.

LIST: I think you’re exactly right. I think those can be expensed. What you also find, though, is that tips tend to be high on Friday and Saturday evenings. So this is the going-out-to-eat-and-party crowd.

This may or may not mean that the consumption of alcohol makes people more generous. The Uber data cannot answer that question. So: draw your own conclusions. But there is one huge conclusion the Uber data seems to point to: most people, when given the option to tip, do not tip! And when they do, it doesn’t have much to do with the quality of their experience.

LIST: The bulk of the reasons why a driver will get tipped is because of these things that are outside of their control. But that said, there are many things that the driver can control that do impact the tip.

For example?

LIST: For example, if you look at drivers with a five-star rating, they’re tipped close to 50 percent more often than those with a 4.75 rating. So the quality of the driver matters.

It matters — but, again, not very much compared to whether a given passenger happens to be a tipper or non-tipper. Similarly, there are other trip characteristics that may affect tips. How the driver drives, for instance, which Uber can measure via telematics information from the driver’s phone.

LIST: Hard accelerations matter. And if you have more of those, you receive less in tips. Hard braking matters. If you have more episodes of hard braking, you receive fewer tips.

The age of the car also matters a little bit.

LIST: Drivers in the old cars are tipped slightly less than drivers in the new cars.

And the language the driver speaks — which List measured by seeing whether drivers keep the language on the Uber app in the default setting, which is English, or they change it.

LIST: And what we find is that those drivers who change the default language — those drivers end up getting tipped much less as well.

One way to increase your tips as an Uber driver is to be female.

LIST: What we find is a really strong result, that female drivers receive about 12 percent more than male drivers in tips. Now, what’s interesting, though, is that both female and male riders tip female drivers more.

DUBNER: Earlier research of yours at Uber found a gender pay gap, with men earning more, even though the algorithm is gender blind. I’m curious whether tipping substantially shrinks that gap?

LIST: When you include tipping, that difference reduces by about 13 percent. So you still have a pretty large effect. Now, the reason why it doesn’t lessen by more than that is that tips are only about four percent of fares.

Okay, so cumulative tipping on the Uber app is only about four percent of the fare total. Yes, that’s a lot less than the standard 15 or 20 percent tip in restaurants. But still, four percent of extra money on millions and millions of Uber rides. Surely that’s got to be good news for the average Uber driver. Doesn’t it?

LIST: Driver earnings actually do not increase on average because of tipping.

Wait a minute, how can that be?

LIST: What happens is, when you add tipping to the app, more drivers come online, and they supply more hours. So that shifts out the labor-supply curve and just that shift alone, of course, decreases wages. But then you have tips added on to that, that make wages roughly the same as what they were before.

John List and his fellow researchers did find one lever they could press to increase the net amount of tipping: changing the default setting of the suggested tip amount.

LIST: One trip might get a default of, “Would you like to tip $1, $3, or $5?”

Another rider, meanwhile—

LIST: They might receive a preset of, “Do you want to tip $2, $3, and $5?” And those defaults or presets matter a lot. Roughly 16 and a half percent of trips are tipped when you have a low preset versus about 14 and a half percent when you have a higher preset.

DUBNER: What’s the median amount tipped, however, in the different options?

LIST: When you have higher presets, people tip less often but they end up tipping more in the end. So if you want to increase tipping, what you want is a higher preset. Within reason.

If Uber really wanted to increase tipping, it could, of course, manipulate the tipping environment. It could, for instance, prompt a passenger to tip during the ride, which would jack up the social-pressure component, and make it more of a have-to, like in a restaurant.

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Danny Meyer grew up in St. Louis, and even though he’s been in New York forever, he still exudes a midwestern sense of hospitality. So, while many of his restaurants — like Gramercy Tavern and Union Square Cafe and The Modern — are well-regarded, high-end restaurants, the style of service is, like Meyer himself, midwestern warm. This combination of warm service and good food translates into big tips for the waitstaff. You might think that Meyer, as the employer of the people getting these big tips, might like this. But you’d be wrong.

MEYER: I decided to take on the tipping system back in 2015 and here we are in 2019, and we’ve learned a lot.

That’s right: Meyer started to eliminate tipping at his restaurants a few years ago. His menus would say “hospitality included,” which meant that prices were higher, but you’d no longer have to add a tip to help pay the server’s salary.

MEYER: We never wanted to hire people who would only be nice to you in expectation of a higher reward.

We made an episode about it back then — it’s called “The No-Tipping Point,” if you want to check it out. As we mentioned earlier, Meyer’s restaurant empire also includes Shake Shack.

MEYER: I will credit Shake Shack with having inspired me to take this step in our full-service restaurants. There are no tip jars at Shake Shack, and there’s no opportunity to tip at Shake Shack. If we can make the economics work where we’re selling a $5, $6, $7 burger, why in the world can we not make this work when we’re serving you a $100 dinner at Gramercy Tavern? It just doesn’t make sense to me.

The haphazard sense of tipping also doesn’t make sense to Meyer.

MEYER: Everybody, practically, leaves a tip in a full-service restaurant. Nobody leaves a tip when they go to McDonald’s. Some people leave a tip in Uber. Almost everybody leaves a tip with a taxi driver. I think that whole social-norm thing is very, very confusing to people. And I’m just happy to opt on the side of saying, “You know that price we put on the menu? That covers everything.”

But Meyer wasn’t only thinking about his customers. One of the biggest challenges of running a restaurant is retaining good employees. It’s a business with a lot of turnover, and turnover is bad for business. One obvious way to keep your employees is to pay them well. The waitstaff and bartenders at Meyer’s restaurants were getting paid well — thanks to all that tipping. But the same couldn’t be said for all the people who actually prepare and cook the food, and wash the dishes, and keep the place running. Meyer found that the tipped employees at his restaurants were earning about two-and-a-half times what the back-of-the-house employees made. Were they really doing two-and-a-half times the work? And the pay gap between tipped and non-tipped kept growing.

MEYER: Every time menu prices go up — and they’ve only gone up over the course of my career — the tipped employee is making more because the tip is just a multiplier of the menu price.

This pay gap had a variety of effects. One was that the people who spent time and money training to be chefs didn’t want to work as chefs.

MEYER: We were seeing more graduates from the Culinary Institute of America, Johnson and Wales, the Institute of Culinary Education, applying for dining-room positions than I had seen in my entire career because they realized they couldn’t afford to live in New York and pursue the thing that had always been their dream.

The pay gap between cooks and servers also created ill will, and led to high turnover in the kitchen.

MEYER: I increasingly saw this divide growing and growing and growing between the compensation possibilities between tipped employees and employees that did not legally qualify to make tips.

What does Meyer mean when he says that kitchen workers don’t “legally qualify to make tips”? Because you’d think one easy solution to this problem would be to simply pool the tip money and redistribute some of it to the kitchen workers. But you can’t do that. One quirk of the hospitality industry is that restaurants are allowed to pay servers what’s called a “tipped wage” — which is below the minimum wage — as long as tips make up the difference. This caveat is called the “tip credit,” and restaurants use it to lower their labor costs. But one restriction of the tip credit is that it applies only to employees who spend at least 80 percent of their time in a customer-facing role. So a restaurant can pool their tips and distribute them among the waitstaff, bartenders, and hostesses — but not the kitchen crew.

MEYER: I might think twice if I believed that the legislature was going to create a new law that permitted tips to be shared everywhere. That has not happened. But even if they did do that, it would still lead me to say this is not a professional way to treat people. Tipping in and of itself, I don’t think fosters the professionalism that we’re looking for in our industry. If you think about every industry where tipping happens, it’s often not a full-time career. I don’t tip my airline pilot or my lawyer or my teacher or the person who’s interviewing me on their podcast. That’s a profession.

Ha! Podcasting — a profession. Anyway: for all these reasons, Danny Meyer decided to eliminate tipping at all his restaurants:

MEYER: We’ve converted about one every four to six months. We just have one more to go.

DUBNER: Okay. So let’s talk about what you’ve learned.

MEYER: Well, I think the biggest thing we’ve learned is that this is really tough, and it’s tough because it’s really a three-legged stool that we’re trying to balance. How do you create a menu price that doesn’t frighten away a prospective customer who’s just casually looking up your restaurant online and may not understand that there will be no tipping on top of that? And then did you actually compensate your team to the degree that you hope to? And now the third leg of the stool is: did you actually make enough money to cover all of the costs involved?

DUBNER: What can you tell us about your restaurant revenues before and after Hospitality Included?

MEYER: Well, I can tell you that our revenues are decidedly higher. But keep in mind we started charging 21 percent more, roughly, on all of our prices. So if they were not at least 21 percent higher, that would be a big fail. What I can also tell you is that the compensation for our staff members, both formerly-tipped employees and never-tipped employees, has also gone up quite a bit.

DUBNER: So if one of the goals was to even out the pay between the people cooking the food and the people serving the food, how much have you closed that gap?

MEYER: Here’s what I know, Stephen: the earning potential before we started Hospitality Included was 2.4 times more for tipped employees than for back-of-the-house employees. Today it’s 1.9 times more. So that’s big. I can also say that the line-cook wages — so the people who cook your food — have gone up 37 percent. Front-of-house compensation, formerly tipped employees, has gone up 8 percent. So we’ve been able to increase both, but we’ve obviously, in order to make some headway in terms of this discrepancy, have increased back-of-the-house pay by a lot more.

DUBNER: And what’s that mean in actual dollar terms for kitchen versus waitstaff? Maybe you could use The Modern as your example?

MEYER: When we started Hospitality Included, in the aggregate the front-of-the-house employees of The Modern were making somewhere around $22 an hour. And today that number is about $25 an hour. Believe it or not, a cook, in the aggregate, in 2015 was making just over $11 an hour. Today they earn $16.50 an hour. So that’s a serious hike.

Meyer didn’t share with us any profitability figures, so we don’t know the degree to which these higher wages are eating into the restaurants’ bottom lines. But at least in terms of wages, the hospitality-included model sounds like it’s working. Kitchen wages went up a lot; even waitstaff wages went up a little, on average. But not everybody likes to be average.

MEYER: Whenever we’ve converted a restaurant, we would experience as much as a 30 to 40 percent turnover in our legacy staff, and I completely understand why that is. Because the way that you got a raise in a tipped house was to have stayed at the restaurant longer than anyone else, which meant that you got the lucrative Thursday, Friday, Saturday night shifts, and it may have taken you six or seven or eight years to earn that schedule.

But the new, no-tipping model made those shifts relatively less valuable. Which, for shorter-tenured workers, was a positive.

MEYER: One of the real benefits is that you can make as much money working on a Monday night as on a Friday night, because the way we compensate our team is a higher hourly rate plus a revenue-share model that averages out the entire week.

And there was another benefit.

MEYER: I feel great about the fact that I no longer need to worry that the only way to get a great tip is to have a woman subjecting herself to leering men or if I’m from a different ethnic group than the table that I’m serving, that I need to worry that they’re not going to give me a good tip.

But if you think you hear a hint of disappointment in Meyer’s voice — well, I’m not sure that’s what we’re hearing — but when he set out to eliminate tipping, he thought he was starting a revolution.

MEYER: Yeah. Well, we did not succeed at inspiring an entire industry to change its tune.

The no-tipping initiative got a ton of media coverage; it was easy to think that a lot of restaurants were following suit.

LYNN: Not as many restaurants have moved away from tipping as you would get the impression.

That, again, is Michael Lynn, the Cornell tipping scholar.

LYNN: There are about 200 restaurants across the United States. It’s just not as big a phenomenon as people say.

Nor is this the first time the no-tipping trend seemed to be catching on.

LYNN: In the ‘70s and ‘80s, there was a comparable tendency for a couple of restaurateurs that got a lot of press for it, to eliminate tipping. And some of them survived and continued that policy, but the vast majority ended going back to tipping.

Danny Meyer gets that.

MEYER: I’ve been pretty zealous about how I think tipping actually holds people back. But I also understand that movements happen in a big way when the economics work for everybody. And I don’t think we’re quite there yet. I completely understand it’s not working yet for everybody.

DUBNER: If you were just having the idea today, having gone through what you’ve gone through the first few years of trying it, would you try it again? Or would you consider this an experiment in progress that, while noble and smart, etc., is maybe too difficult? That there’s too much status quo to overturn?

MEYER: Well, I think that’s a fair question and the honest answer is I’m not sure. I think largely because of some of the notoriety of our making this initiative, that has actually brought an awareness to the legislature, which is getting very close, as I understand, to creating a situation where tips can be shared amongst everybody.

Even if such legislation were to happen, it wouldn’t eliminate tipping — in fact, it might strengthen the tipping model. But Meyer sees another development that could kill the model.

MEYER: Each time minimum wage goes up, restaurants that are continuing to have a tipping system have all raised their prices to keep up with the minimum wage increases, and then the guest is tipping 20 percent on top of that. So we’re about one minimum-wage hike away from a pricing advantage over other restaurants while we’re paying our staff more. And I think that’s the point when you’re going to start to see many restaurants eliminate tipping.

But Michael Lynn at Cornell — who once told us he’d like to ban tipping — he’s not so sure we’ll ever see the end. Why?

LYNN: Look, when I started doing research on tipping, I thought tips would be strongly related to service quality. But what I found was that about 4 percent of the variance in tips left by different groups can be explained by their ratings of service quality.

That is, in restaurants — as in the tipping of Uber drivers — there was a weak correlation between quality of service and tip. But Lynn discovered something interesting in his research: a lot of restaurant servers think there’s a strong correlation:

LYNN: About half of the servers in this country will say that they think their tips are moderately-to-strongly affected by the service they leave. They’re wrong when they say that, but they believe it. And because they believe it, tipping in fact does provide an incentive to deliver better service for at least half of the servers in this country. So yes, my opinion about the incentive value of tipping as a system of compensation has changed over time, although the facts haven’t changed. I just learned more about it and began to think a little bit more sophisticated about it.

Okay, did you follow that? Waiters and waitresses think their service significantly affects their tip, even though the data shows it doesn’t; but because waiters and waitresses think it does, they act as if it does. And Michael Lynn found a similar dynamic from the customer side.

LYNN: Tipping increases customer satisfaction. Customers expect service to be better under a tipping system, and that can bias their perceptions. I’ve done a couple of studies based upon recent restaurants that have eliminated tipping. So for example, Joe’s Crab Shack recently, at several of its restaurants, eliminated tipping. Most of them went back to tipping. Their online service ratings declined during the period that they had no tipping and went back up when they reinstituted tipping.

Does that mean the service actually got worse when there was no tipping?

LYNN: I don’t know. I can’t nail down precisely why it occurred. I believe it has to do with customers expect service to be better. I know that customers generally like lower prices and Joe’s Crab Shack, when it eliminated tipping, it raised its prices.

This suggests that many restaurant customers are price-sensitive — and that they’re so accustomed to seeing menus carrying a pre-tip price that they’d prefer to see the low price and then tip even though they’ll end up paying the same or even more. The human mind is a funny thing, is it not?

LYNN: I’m less likely to want to just ban tipping now, because the data I have suggests that customers are happier with tipping. The press mostly focuses on this from the standpoint of servers. But by far the largest group that’s impacted by tipping is customers. As much as people might grouse about tipping, overall it seems to increase consumer satisfaction. And since they outnumber employees by a wide margin, likely it’s in society’s benefit.

So Michael Lynn’s research suggests that Danny Meyer’s no-tipping revolution will have to wait even longer. But Lynn’s research did identify one category of restaurant that’s ready for the transition.

LYNN: And that is really upscale restaurants that replace tipping with higher menu prices.

Any examples?

LYNN: Danny Meyer’s restaurants fall in that category. I think that the price sensitivity of his customers is lower. I also think that he’s got a strong-enough reputation that people won’t anticipate lower service quality. “It’s a Danny Meyers restaurant.” People will still expect good service even if there is no tipping.

So what have we learned — other than the fact that tipping is among the most unpredictable economic activities on earth? I went back to John List to ask whether his research on Uber tipping says anything larger about the human condition.

LIST: I think a first point that the data really highlight is that very few people will be continuously generous and consistently generous. I think that that just jumps out in the data. I think a broader point number two is the heterogeneity across people. We oftentimes have people talking about — well everyone’s different — but we actually have a really good glimpse of an important part of our economy. And it shows you just how important things like, if you’re a nice person and you get a nice rating, that that spills over to this generosity that you can exhibit privately.

I think that’s sort of interesting, because in psychology and in economics, we found that a lot of behaviors don’t spill over to different areas in our lives. So you smoke but then you wear a seatbelt. You’re nice in one setting but you’re mean in the other. This sort of gives you a glimpse that there is some consistency in this generosity, or being nice to another person, that is much stronger than what I’ve seen in the past.

DUBNER: John, what kind of a tipper are you?

LIST: I’m an always tipper. I’m the 1 percent.

DUBNER: And why is that? Is it that you want to give some of your money to those people? Or is it that you want to be for yourself the kind of person who does that?

LIST: I think it’s both. I think that this is an important time to send wealth or income to another person who’s doing a job such as this. But also I feel good about doing it. I have a warm glow. And it makes me feel good inside that I’m not stiffing the person.

If John List is telling the truth, and I have no reason to think he’s not — this is interesting. That an economist, of all people, always tips. Economists — famous for knowing, as it’s said, “the price of everything and the value of nothing.” Economists — who lecture the rest of us about utility- and profit-maximizing; about putting aside our pesky emotions when it’s time to make a decision.

LIST: I have a warm glow.

“A warm glow?” The fact that an economist like John List always tips is, I believe, the best possible evidence of just how weird tipping truly is.

*      *      *

Freakonomics Radio is produced by Stitcher and Dubner Productions. This episode was produced by Matt Hickey. Our staff also includes Alison Craiglow, Greg Rippin, Harry Huggins, Zack Lapinski, Daphne Chen, and Corinne Wallace; our intern is Ben Shaiman. We had help this week from James Foster. Our theme song is “Mr. Fortune,” by the Hitchhikers; all the other music was composed by Luis Guerra. You can subscribe to Freakonomics Radio on Apple Podcasts, Stitcher, or wherever you get your podcasts.

The post Why Does Tipping Still Exist? (Ep. 396) appeared first on Freakonomics.

via Finance Xpress

Should you rollover a 401k to an IRA? We’ll take you through the process and help you decide if this is the best choice for you.

I recently changed jobs. And as part of the transition, I decided to rollover my 401k from my old employer to a rollover IRA. My 401k was with Fidelity, and my plan was to move it over to an existing IRA at Vanguard. In this article I want to walk through the reasons I made that decision, how the process works, and things to watch out for if you decide to rollover a 401k.

Why Rollover a 401k

For me the decision was simple. I prefer the low cost Vanguard funds over Fidelity funds. Fidelity does offer some really low cost index funds, but Vanguard offers a wider variety of funds with rock-bottom expense ratios.

In addition, by moving funds over to Vanguard, I can qualify for even lower fees and more exclusive customer service. In addition to a standard account, Vanguard offers what it calls Voyager, Voyager Select and Flagship accounts. To qualify, however, you must have minimum account balances. By moving more money over to Vanguard, it’s easier to qualify for a higher level of service. Here are the requirements of each account type and what they offer:

Voyager Services®

Investors with $50,000 to $500,000 in Vanguard mutual funds and ETFs qualify for Voyager, which provides the following benefits:

• Commission-free Vanguard ETF® trades and reduced commissions for stocks and non-Vanguard ETFs. No account service fees.*
• A detailed financial plan at a discount. A Certified Financial Planner professional from Vanguard will analyze your investments and saving strategy.

Voyager Select Services®

Investors with $500,000 to $1 million in Vanguard mutual funds and ETFs qualify for Voyager Select, which provides the following benefits:

• Sophisticated support from representatives who can answer your more complex investment questions.
• Commission-free Vanguard ETF trades and additional reductions on brokerage costs. No account service fees.*
• A complimentary financial plan by a CFP professional from Vanguard that analyzes your investments and saving strategy.

There are of course other considerations to make in deciding whether to rollover a 401k to an IRA. But the above two reasons were what prompted my decision.

Flagship Services

Investors with $1 million or more in Vanguard mutual funds and ETFs qualify for a Flagship account, which offers the following benefits:

• Exceptional service from a personal representative who is your guide to all that Vanguard offers.
• “Ask a CFP® professional” program for guidance on particular financial issues as they arise. For long-range planning, a complimentary financial plan by a CFP professional that analyzes your investments and saving strategy.
• Exclusive access to select Vanguard mutual funds that are closed to other investors.
• Commission-free Vanguard ETF trades, 25 commission-free trades for stocks, options, and non-Vanguard ETFs and transaction-fee funds, and significant savings on other brokerage costs. No account service fees.*

The Process was Dead Simple

This part really surprised me. As I thought about how to start the process, I decided to call Vanguard to see what information about my Rollover IRA I would need to give Fidelity. I already had the IRA account from a rollover six years ago, but had long forgotten the actually steps needed to get the process moving.

My call was routed to a department that does nothing but handle rollovers. The rep walked me through the process, and then offered to call Fidelity with me. So he dialed up Fidelity and did all the talking. I guess Vanguard really wanted my money!

We did hit one snag. According to the Fidelity representative, my old employer still had my status as an active employee. So I had to call my employer to get my status changed. That took a few days, and then the three of us got back on the phone to complete the rollover. It took all of five minutes.

You can check out an even more detailed description of the 401k rollover process here.

Watch out for the Distribution Method

One thing you need to watch for is how the funds are distributed. You don’t want the check written out to you or the IRS will treat it has a distribution, not a rollover. Of course, the reps and Vanguard and Fidelity know all these rules and can make sure your withdrawal from your 401k is treated as a rollover. In my case, Fidelity will send me the check made out to Vanguard for my benefit. I’ll then need to mail the checks to Vanguard, with my Rollover IRA account number written on the check.

Once that’s complete, I’ll be able to invest the money in any Vanguard fund or ETF I want.

The Potential Tax Consequences on Retirement Plan Distributions

Apart from my own rollover, and according to the IRS, there are three permitted methods for doing a rollover of any kind:

1. Direct rollover: Ask your plan administrator to make payment directly to the retirement plan or IRA you’re doing the rollover into. You’ll be given specific instructions, but most likely the administrator will issue a check for the amount of the distribution made payable to your new account. Since it is a direct rollover, no taxes will be withheld from the amount of the check. Upon receipt, you will then forward the check on to the new retirement plan.
2. Trustee-to-trustee transfer: This is by far the easiest transfer method because you never take custody of either the check or the funds. In this type of transfer, you ask the trustee holding your current plan to make a payment directly from your plan to the new plan, usually by electronic transfer. Once again, no taxes are required to be withheld on this type of transfer.
3. 60-day rollover: Under this method, your current plan trustee issues a check to you personally. Once you receive funds, you can deposit the entire amount or just a portion of it into the new plan. Any amount of the distribution that is not deposited into a qualified plan within 60 days of issuance will become taxable. It will be subject to ordinary income tax, plus a 10% penalty if you are under 59 ½.

As already mentioned, there is no tax withholding requirement using the first two transfer methods. However, if you use the 60-day rollover, the IRS requires withholding of 10% of the planned distribution in the case of an IRA, and 20% for an employer-sponsored plan.

The Tax Withholding Complication

Unless you’re planning to actually liquidate your plan distribution, you should always go with either the direct rollover method or the trustee-to-trustee method. In my opinion, the trustee-to-trustee method is the simplest, since the funds are transferred directly and immediately from one plan to another. There’s no possibility of human error, that might cause you to miss the 60-day deadline.

But if for any reason you have taxes withheld from your transfer, there’s a major complication. The amount of tax withheld from the distribution means that less than 100% is available to be transferred to the new plan.

Let’s say you transfer $50,000 from an employer-sponsored plan to an IRA. The plan administrator is required to withhold 20%, or $10,000.

For tax purposes, the full $50,000 will be taxable. But you will only receive $40,000, due to the withholding.

If you’re going to take the distribution and keep it, there’s no problem. The taxes for the distribution will already have been withheld.

However, if you ultimately plan the roll the funds over into a new plan, you’ll only have $40,000 distributed to make the transfer. That will leave you with one of two choices:

1. Rollover the net $40,000 received from the distribution, and supplement with $10,000 from your non-retirement assets. You’ll be able to claim a refund for the tax withheld if you complete the rollover within 60 days of distribution.
2. Complete the rollover with just $40,000. Ironically, the $10,000 in tax withholding will become a taxable distribution. However, you should be able to receive a refund of most of the withholding since the actual amount of the taxable distribution will be much lower than the total amount.

This is why I recommend doing the trustee-to-trustee transfer. It completely eliminates the possibility of either situation happening.

WARNING: Watch Out for 401(k) Loans

No discussion of 401(k) plan rollovers would be complete without considering the implications of IRS 401(k) loan provisions.

Millions of people have loans through their 401(k) plans. You can borrow up to 50% of the value of your plan, up to a maximum of $50,000. The loan must generally be repaid within five years. However, if your employment ends and you still have a 401(k) loan outstanding, there may be tax consequences.

Under a typical 401(k) plan loan provision, the employer may allow you up to 60 days from termination to repay the loan, though some may extend that to 90 days. But if you fail to make repayment within the required timeframe, the plan administrator will declare the unpaid loan balance to be a distribution.

Once again, the distribution that will be added to your regular income, subject to ordinary income tax, plus the 10% early distribution penalty if you’re under 59 ½.

The 10% Early Distribution Penalty

I’ve mentioned this penalty a couple of times, so let’s discuss it in some detail. Under IRS rules, retirement funds are eligible for distribution beginning at age 59 ½. If you take distributions before reaching that age, which can certainly happen in the case of a distribution or an unsuccessfully completed rollover, you’ll pay a penalty equal to 10% of the amount of the distribution, over and above the ordinary income tax owed.

But there are IRS exceptions to the early distribution penalty. It can be waived under any of the following circumstances:

• Automatic enrollment – permissive withdrawals from a plan with auto enrollment features
• Death of the plan owner
• Disability – total and permanent disability of the participant/IRA owner
• Domestic relations – an alternate payee under a Qualified Domestic Relations Order (QDRO).
• A series of substantially equal payments
• Medical – amount of unreimbursed medical expenses (>7.5% AGI; after 2012, 10% if under age 65)
• Military – certain distributions to qualified military reservists called to active duty
• Separation from service – the employee separates from service during or after the year the employee reaches age 55 (age 50 for public safety employees of a state, or political subdivision of a state, in a governmental defined benefit plan)

Unless you qualify for one of these penalty exemptions, you should avoid taking direct distribution of your 401(k) plan funds. Also remember that the exceptions apply only to the 10% penalty. You will still owe ordinary income tax on the amount distributed. Taxwise, a 401(k) rollover is by far your best strategy.

Who Should Do a 401(k) Rollover?

We should really start with why you shouldn’t do a 401(k) rollover, since the list is shorter.

Basically, if you’re happy with the old employer plan, you should consider keeping your money there. You can even get help managing the plan through a service called blooom. It’s a robo-advisor designed specifically for employer-sponsored retirement plans. It can be added to virtually any employer plan, as it does not require administration approval. You pay a small fee to blooom and it manages your retirement plan, including moving your money into lower-cost fund options. It’s the perfect service for anyone who isn’t entirely comfortable managing their own retirement plan.

However, if you’re not satisfied with your current plan, either because options are limited or fees are too high, a rollover has to be considered.

Many employers will allow you to roll your old 401(k) plan into their plan. Check with your new employer and see if this is possible. If upon evaluation you feel that the new plan is better than the old one, you can do the rollover into the new plan.

Otherwise, you can do a rollover from a 401(k) plan into an IRA. This type of rollover is best if you’re comfortable with self-directed investing. In my case, I feel comfortable choosing my own investments in Vanguard. But even if you don’t, you can do a rollover from a 401(k) plan into an IRA held with a robo-advisor. They’re automated online investment platforms, that will design and manage your portfolio for a very small annual fee.

Advantages and Disadvantages of Doing a 401(k) Rollover

We’ve already discussed some of the benefits of doing a 401(k) rollover from an old employer plan to a new one. In this section, let’s focus on the advantages and disadvantages of doing a 401(k) rollover into an IRA.

Advantages:

• You’re an experienced investor, and would prefer to manage your own retirement assets.
• The benefits and costs of using a robo-advisor to manage your money are better than those of the current plan.
• You’re not happy with the investment options in your current plan.
• You have several 401(k) plans from previous employers, and you want to consolidate them into a single IRA.
• Your new employer either doesn’t permit a rollover of an old 401(k) plan, or doesn’t provide the investment options you’re looking for.

Disadvantages:

• You’re satisfied with the current plan and the returns it’s providing.
• By moving retirement funds from a 401(k) plan to an IRA, you’ll be giving up certain protections 401(k) plans provide from creditors and lawsuits.
• You have an immediate need for the funds, due to disability, medical costs, or other distributions that will exempt you from the 10% early distribution penalty.

Final Thoughts on 401(k) Rollovers

As you can see from the advantages and disadvantages above, it will be to your benefit to do a 401(k) rollover in most situations. Just be careful to do it right. Because of the tax consequences, and the often large amounts of money involved, an incorrect rollover can create a very large tax liability.

The best advice is to rely heavily on the new plan trustee. They can handle all the details, including making contact with your current plan administrator, and arrange a smooth, stress-free transfer.

Topics: financial planning • Investing • Personal Finance • Retirement Planning

The post My Experience with a 401K Rollover appeared first on The Dough Roller.

via Finance Xpress

Posted by: John S Kiernan

Settlers of the Plymouth Colony and their Wampanoag tribe predecessors kicked off a grand tradition way back in 1621. And for that we should all be thankful, if for nothing else than a day off from work and school. But the Thanksgiving we celebrate today is a lot different than that first festival in honor of a particularly bountiful harvest.

Sure, we still eat turkey, potatoes and pumpkin. And we continue to use the occasion to reflect on the things we cherish most, such as friends and family. But a pair of additional F’s – football and Friday – has become just as important to some.

The NFL’s three-game Thanksgiving slate earned nearly 79 million combined viewers last year, and we spent more than $6.2 billion on Black Friday shopping – on top of the billions we spent preparing for Thanksgiving itself. So if it isn’t tryptophan that puts you to sleep this Thanksgiving, it might be 12 hours of pigskin or an early wake-up call for a day of deal hunting.

However you plan to celebrate Thanksgiving and the start of the holiday shopping season, we’ve got you covered. WalletHub took an in-depth look at Thanksgiving’s humble roots and how it has evolved over time in preparing this report. The infographic below is filled with all kinds of Thanksgiving facts, from how much we spend to how much we eat. And the Ask the Experts section that follows features a panel discussion on Thanksgiving money-wasters and dining tips.

Embed on your website<a href="https://ift.tt/2fkUdSf"> <img src="//d2e70e9yced57e.cloudfront.net/wallethub/posts/68315/2019-thanksgiving-btn-v6.png" width="" height="" alt="Thanksgiving-2019-By-The-Numbers" /> </a> <div style="width:px;font-size:12px;color:#888;">Source: <a href="https://ift.tt/2qxoT9X> 5 Thanksgiving Facts for 2019:

• $313+: Average spending over the five-day Thanksgiving period.
• 10 Hrs. 33 Mins.: Length of time the average American male would need to spend on the treadmill to burn the 4,500 calories consumed at the average Thanksgiving meal.
• $552+ Million: Estimated amount Americans spend on Thanksgiving turkeys each year, with 46 million turkeys killed for the holiday.
• $19 Million: Amount of property loss caused by residential building fires each Thanksgiving.
• 53%: Share of people celebrating Thanksgiving who are dreading having to talk politics at the dinner table.

Ask the Experts

In search of a deeper understanding of Thanksgiving’s multi-faceted role in modern life, we posed the following questions to a panel of experts in consumer studies, history and economics. You can check out their bios and responses below.

1. What are the biggest Thanksgiving money-wasters?
2. What are the most cost effective days/times to fly around the Thanksgiving holiday?
3. What are the most cost effective ways to put on a feast for friends and family without breaking the bank?

< >

• Melinda Valliant Ph.D., RD, CSSD – Associate Professor, Sports RD, Department of Nutrition & Hospitality Management, School of Applied Sciences, The University of Mississippi
• Milos Bujisic Assistant Professor, Consumer Sciences, Ohio State University
• Kevin Bennett Ph.D. – Assistant Teaching Professor of Psychology, The Pennsylvania State University, Beaver Campus
• Jonathan Deutsch Professor, Drexel University
• K. Annette Burnsed Assistant Professor / Retailing, University of South Carolina College of Hospitality, Retail and Sport Management

from Wallet HubWallet Hub


via Finance Xpress

Looking to find one of the best online tutoring jobs from home? 

There are a variety of work from home tutoring jobs, from teaching English to helping students with their homework.

You might spend 30 minutes teaching a lesson, a few minutes answering questions online, or working one-on-one with a student in a video lesson.

These jobs can be very rewarding because you are helping people learn new things – this is one of the best feelings in the world!

In addition to being rewarding, online tutoring jobs are very flexible ways to earn money.

You get to pick the times and days that work for you so you can work around your full-time job, while you care for your kids, and more.

And, flexibility means online tutoring jobs are great for many reasons such as:

• You can work from home.
• You don’t have to stick to a set schedule.
• You may be able to travel more or even full-time.

If you're looking for a way to make extra money, want to work from home, or want to work while traveling, then learning how to become an online tutor can be a fun way to do so.

Also, making extra money can completely change your life.

Learning how to make money on the side of my day job helped me pay off $38,000 in student loans within 7 months. I eventually turned my side hustle into a full-time job, and I can now travel full-time, pursue my passions, and more!

Finding ways to make extra money can change your life in some really great ways, such as helping you with:

• Paying off your debt.
• Saving up for big purchases, like vacations.
• Getting out of a paycheck to paycheck lifestyle.
• Retiring earlier than you had originally planned.
• Realizing that your job isn’t the only option out there, especially if you are currently feeling stuck.
• Help you to become more diversified and make money in more ways.
• Travel more, or even full-time!

As you can tell, I am a big believer that learning to find new ways to make money can completely change your future for the better. And, online tutoring jobs are one of the many great ways you can start earning more money.

Related articles on how to make extra money:

• 12 Work From Home Jobs That Can Earn You $1,000+ Each Month
• Want To Make An Extra $100 A Month? Learn How To Become A Mystery Shopper
• Want To Make Money From Home? Here Are 17 Of The Best Online Jobs
• 12 Passive Income Ideas That Will Let You Enjoy Life More
• Can You Really Make Money With Paid Online Surveys?

Here are the best online tutoring jobs from home.

 

Tutor online with CourseHero.

Course Hero is a website that helps high school and college students with course-specific questions.

Course Hero was founded in 2007 and is an online learning website where students can access study resources. Students can search by their specific school to find study guides, videos, practice problems, class notes, and step-by-step explanations. 

Using the website, students connect with Course Hero tutors on a wide range of subjects and classes, which makes this a great side hustle for people with different educational backgrounds and experience.

What might surprise you to learn is that you don’t have to be a certified tutor, a professor, or a teacher in order to become a Course Hero tutor.

However, you will need to share information that proves you have expertise in the subjects you would like to help students with.

Tutors earn an average of $3 for each question they answer on Course Hero. Earning between $12-$20 per hour, Course Hero tutors earn an average of $300/week.

Here's how Course Hero tutors work:

1. You apply here to become a Course Hero tutor.
2. When you are available to answer questions, you do so on the Course Hero website.
3. You get paid.

Learn more at How To Make $300+ Weekly As An Online Tutor With Course Hero. 

 

Education First – Teach English online with Education First

Online tutoring jobs are growing every single day.

Surprisingly, you don't need to be a teacher for online English teaching jobs. You also don't need to speak more than one language – you only need to speak English.

Learning how to become an online English tutor has become extremely popular, making it one of the best online jobs for many good reasons – it’s flexible, there’s a high need, it pays pretty well, and almost anyone can do it.

The amount of money you can earn teaching English online will vary, but it's typically around $14 to $22 per hour.

Education First (EF) is a top work from home company that allows you to teach English online, and you can earn up to $16 an hour teaching English online with Education First.

EF has been around for over 50 years, making them the oldest brand in private language teaching. They are also one of the only U.S. based online English teaching companies. They may not pay the highest, but they are still a great company to work for.

Teaching with Education First requires:

• A bachelor’s degree from a U.S. or U.K. university, and you must currently reside in the U.S. or U.K.
• Prior teaching experience or equivalent in education, tutoring, mentoring, or homeschooling.
• High-speed internet, computer, and webcam/microphone.

Please click here to sign up with Education First.

 

VIPKID – Teach English online with VIPKID

VIPKID is the #1 platform for teaching English online to Chinese students. They also recently ranked #1 on Forbes magazine's “Top 100 Remote Work Companies Report” for 2018, and they have won many other awards as well. 

VIPKID is a company that connects native English speaking teachers with Chinese students aged 4-12, and you can earn up to $22 an hour teaching English online with VIPKID.

Because VIPKID is becoming more and more popular in China, they need more English speaking teachers to work for them.

VIPKID develops a curriculum for you so there is no planning time involved. And, their teachers work from wherever they want, set their own schedules, and take home competitive pay. Again, there’s no need to speak Chinese.

The requirements for teaching with VIPKID are:

• Bachelor's degree from a U.S. or Canadian university.
• Experience with children in areas such as: teaching, mentoring, coaching, tutoring, babysitting, etc.
• High-speed internet, computer, and webcam/microphone.

Please click here to sign up with VIPKID.

 

Qkids – Teach English online with Qkids

Qkids is another one of the top online teaching jobs from home that connects native English speakers with over half a million children aged 4-12 who are in need to English lessons. This is a great job for graduate students, stay-at-home parents, and those looking to earn more money.

You can earn up to $20 an hour by teaching English online with Qkids. The lessons are already developed for you, and Qkids focuses on game based learning.

If you want to learn how to become an online tutor with Qkids, you will need:

• A bachelor's degree from a U.S. or Canadian University.
• Experience working with children, like teaching, mentoring, coaching, tutoring, babysitting, etc.
• High-speed internet, computer, and webcam/microphone.

With Qkids:

• You teach English to young learners between the ages of 4-12 years through their online platform.
• Teachers teach classrooms with up to four students.
• Their Class Coordination Team will handle scheduling and student assignment.
• Each in-lesson time is 30 minutes.
• You can work up to 19 hours available weekly.
• Training and support is provided for you.
• The curriculum is preset, meaning lesson planning is not required.

Please click here to sign up with Qkids.

 

Become an online tutor with Tutor.com

Tutor.com is a website that helps with homework, tutoring, coaching, career training, and more. Users can access it 24/7, which makes it a very flexible to find different types of tutoring jobs from home.

This platform pays their online tutors a set hourly rate that is dependent on the subjects that you tutor. Payment comes directly from Tutor.com.

The steps to become an online tutor with Tutor.com are:

1. Apply
2. Take an exam on the subject you want to teach on
3. Complete a mock tutoring session
4. Do a background check
5. Begin tutoring

 

Become a tutor on Chegg.

According to Chegg, top tutors can earn $1,000+/month, starting at around $20 per hour for top tutors.

Chegg is easy to use because they'll send students directly to you, you can tutor from anywhere, and you'll get paid each week from Chegg.

You can sign up to tutor online with Chegg here.

 

Start your own tutoring business.

While the above options were all working for companies, you can definitely work for yourself as a tutor. Most of the time, working for yourself means you’ll make even more money, which you’ll read about below. 

Check out How I Made $90,189 Tutoring In One Year Part-Time to learn how Making Sense of Cents reader Trevor Klee earned $90,000 in one year working part-time with his tutoring business.

He has a website where people can contact him directly if they are looking for help on an exam.

In his guest post, he states:

“I charge $125/hr for the easier exams (GRE and LSAT), and $160/hr for the harder exam (GMAT). Given that most people work with me for 10-20 hours, I make anywhere from $1250 to $3200 per client. I usually work between 15-20 hours per week at this. So I make around 6 figures. In 2017, I made $90,189.”

In our interview, you’ll learn:

• The steps you need to take to find tutoring jobs.
• The problems people run into as a tutor.
• What it takes to become a tutor.

 

Why you’ll love one of these work from home tutoring jobs

In the beginning of this article I talked about how rewarding it is to work one of these online tutoring jobs, and I want to talk about that some more. Working as a tutor gives you the opportunity to make a difference in someone’s life.

We all have teachers we loved and still remember as adults, and I’ve heard from many online tutors that they sometimes think about where the kids they tutor will be in 10, 15, or 20 years. 

That’s because as an online tutor, you get to be part of their future success.

Of course, learning how to make extra money is always a good feeling too!

What do you think are the best online tutoring jobs?

The post The Best Online Tutoring Jobs – A Flexible Way To Make More Money appeared first on Making Sense Of Cents.

from Making Sense Of Cents


via Finance Xpress

Posted by: Adam McCann

Thanksgiving is one of America’s most beloved holidays, giving families a chance to share a meal together and reflect on all the things for which they are grateful. The first Thanksgiving dates back to Plymouth, MA in 1621, and each U.S. president declared a yearly celebration of the holiday until Theodore Roosevelt signed Thanksgiving into law permanently in 1941.

But even though Thanksgiving is centered on family and gratefulness, it’s still become a highly commercialized holiday. That’s apparent from the fact that the next day is Black Friday, one of the biggest shopping days of the year. A survey by the National Retail Federation also found that 34 million people planned to shop on Thanksgiving day in 2018. Luckily, though, it doesn’t cost too much to make a Thanksgiving feast for your family – around $50 on average for 10 people.

To help Americans find the best places to go for Thanksgiving without breaking the bank, WalletHub compared the 100 largest U.S. cities based on 20 key metrics. Our data set ranges from cost of Thanksgiving dinner and share of delayed flights to volunteer opportunities per capita and forecasted precipitation. Read on for the winners and a full description of our methodology.

For fun and interesting facts about Turkey Day, check out WalletHub’s Thanksgiving Fun Facts Infographic.

1. Main Findings
2. Methodology

Main Findings

Embed on your website<iframe src="//d2e70e9yced57e.cloudfront.net/wallethub/embed/67603/geochart-thanksgiving.html" width="556" height="347" frameBorder="0" scrolling="no"></iframe> <div style="width:556px;font-size:12px;color:#888;">Source: <a href="https://ift.tt/36NHlzc>  

Best Cities for Thanksgiving

Overall Rank (1 = Best)	City	Total Score	‘Thanksgiving Celebrations & Traditions’ Rank	‘Affordability’ Rank	‘Safety & Accessibility’ Rank	‘Giving Thanks’ Rank	‘Thanksgiving Weather Forecast’ Rank
1	St. Paul, MN	65.35	6	78	7	6	11
2	Scottsdale, AZ	65.23	29	21	21	11	6
3	Virginia Beach, VA	64.07	20	17	6	33	55
4	Orlando, FL	62.57	1	20	72	52	44
5	Denver, CO	62.48	7	30	37	35	24
6	Gilbert, AZ	62.18	56	62	9	2	4
7	Louisville, KY	62.13	21	3	34	26	76
8	Raleigh, NC	61.81	4	15	56	34	55
9	Irvine, CA	60.57	9	89	1	39	12
10	Norfolk, VA	60.11	95	43	19	19	55
11	Chandler, AZ	59.98	34	60	22	21	4
12	Henderson, NV	59.95	84	44	14	59	2
13	Mesa, AZ	59.92	61	9	65	44	2
14	Minneapolis, MN	59.74	24	56	31	3	21
15	Plano, TX	59.26	36	37	2	13	85
16	Miami, FL	59.11	2	59	48	71	44
17	Lexington-Fayette, KY	59.10	91	6	17	91	76
18	Colorado Springs, CO	58.55	64	36	82	69	1
19	Fort Wayne, IN	58.48	22	26	33	85	63
20	Wichita, KS	57.88	90	28	40	89	54
21	Atlanta, GA	57.63	10	32	84	5	76
22	North Las Vegas, NV	57.46	100	51	52	51	8
23	El Paso, TX	57.16	80	71	4	99	31
24	Boise, ID	57.13	17	45	57	81	23
25	Anaheim, CA	56.81	18	73	18	48	24
26	Irving, TX	56.55	12	69	47	8	81
27	Chesapeake, VA	56.51	97	50	43	29	44
28	Laredo, TX	56.49	86	13	8	100	97
29	Omaha, NE	56.18	60	25	30	77	74
30	Las Vegas, NV	56.06	49	24	54	54	8
31	Washington, DC	56.05	14	74	51	4	44
32	San Diego, CA	55.82	31	68	15	70	8
33	Madison, WI	55.62	57	61	39	73	30
34	Portland, OR	55.04	46	64	36	12	29
35	Jersey City, NJ	54.98	8	77	44	43	60
36	New Orleans, LA	54.97	5	42	62	65	76
37	Austin, TX	54.72	55	5	38	64	91
38	Durham, NC	54.57	23	47	60	76	66
39	Phoenix, AZ	54.53	26	14	89	45	12
40	Aurora, CO	54.48	88	54	68	55	15
41	Birmingham, AL	53.84	73	7	78	18	83
42	Chicago, IL	53.80	27	33	53	57	38
43	St. Louis, MO	53.79	33	48	74	49	35
44	Chula Vista, CA	53.65	98	88	10	58	15
45	Pittsburgh, PA	53.60	13	63	13	16	95
46	Santa Ana, CA	53.42	43	84	20	47	12
47	New York, NY	53.34	3	95	27	42	60
48	Tucson, AZ	53.12	71	18	77	82	36
49	Fresno, CA	53.07	72	39	61	94	33
50	Oklahoma City, OK	52.71	89	4	70	60	53
51	Glendale, AZ	52.70	48	53	86	20	6
52	Cincinnati, OH	52.62	38	19	79	40	76
53	Long Beach, CA	52.47	50	67	23	56	24
54	Charlotte, NC	52.44	52	23	49	41	66
55	San Jose, CA	52.43	16	92	11	32	40
56	Houston, TX	52.36	44	2	91	50	89
57	Indianapolis, IN	52.29	69	11	58	38	66
58	Winston-Salem, NC	52.06	65	57	26	80	66
59	Reno, NV	51.94	75	76	16	92	28
60	Arlington, TX	51.75	32	66	28	23	89
61	Memphis, TN	51.68	79	27	90	7	66
62	Albuquerque, NM	51.63	15	41	99	87	15
63	Tampa, FL	51.62	42	46	81	37	44
64	Baltimore, MD	51.30	39	55	92	15	63
65	Lincoln, NE	51.18	92	85	3	86	74
66	Milwaukee, WI	51.16	76	29	97	30	52
67	Tulsa, OK	51.16	94	12	100	72	49
68	Seattle, WA	50.92	62	83	64	1	43
69	Los Angeles, CA	50.85	28	80	29	67	24
70	Dallas, TX	50.64	41	40	80	17	81
71	Corpus Christi, TX	50.62	96	22	41	97	97
72	Fort Worth, TX	50.49	77	8	55	36	85
73	St. Petersburg, FL	50.23	51	49	50	53	55
74	Hialeah, FL	49.91	66	91	12	61	36
75	Greensboro, NC	49.69	45	34	83	88	66
76	Boston, MA	49.65	54	72	24	14	93
77	Philadelphia, PA	49.03	40	87	42	46	50
78	Newark, NJ	48.88	37	82	69	28	60
79	Garland, TX	48.70	78	81	59	9	85
80	San Antonio, TX	48.64	63	1	71	66	92
81	Bakersfield, CA	48.61	47	58	96	96	20
82	Columbus, OH	48.52	81	10	63	68	85
83	Sacramento, CA	48.24	11	86	67	78	34
84	Riverside, CA	47.51	85	90	32	74	15
85	Buffalo, NY	47.37	30	30	25	83	100
86	Baton Rouge, LA	47.35	59	70	76	84	83
87	Lubbock, TX	47.26	68	75	75	98	65
88	San Francisco, CA	46.59	19	94	73	22	40
89	Nashville, TN	46.54	82	16	85	24	66
90	Toledo, OH	46.41	93	52	35	90	96
91	Honolulu, HI	45.94	83	99	5	79	21
92	San Bernardino, CA	45.70	99	93	66	63	15
93	Kansas City, MO	45.44	53	65	98	27	38
94	Jacksonville, FL	44.86	67	38	93	75	55
95	Detroit, MI	44.64	74	35	87	62	94
96	Cleveland, OH	42.24	25	79	94	25	99
97	Fremont, CA	41.53	35	100	45	31	51
98	Anchorage, AK	41.36	87	96	46	93	66
99	Oakland, CA	39.74	58	97	95	10	40
100	Stockton, CA	38.60	70	98	88	95	32

 

Methodology

In order to determine the best places to go for Thanksgiving, WalletHub compared 100 of the most populated U.S. cities across five key dimensions: 1) Thanksgiving Celebrations & Traditions, 2) Affordability, 3) Safety & Accessibility, 4) Giving Thanks and 5) Thanksgiving Weather Forecast.

We evaluated those dimensions using 20 relevant metrics, which are listed below with their corresponding weights. Each metric was graded on a 100-point scale, with a score of 100 representing the most favorable conditions for a Thanksgiving celebration. For metrics marked with an asterisk (*), we calculated the population size using the square root of the population in order to avoid overcompensating for minor differences across cities.

Finally, we determined each city’s weighted average across all metrics to calculate its overall score and used the resulting scores to rank-order our sample. In determining our sample, we considered only the “city proper” in each case and excluded cities in the surrounding metro area.

Thanksgiving Celebrations & Traditions – Total Points: 25

• Thanksgiving Events per Capita: Double Weight (~8.33 Points)Note: Events include: parades, festivals, parties, galas and performances.
• Turkey Trots per Capita*: Full Weight (~4.17 Points)Note: A turkey trot is a running race that usually occurs on or around Thanksgiving Day all over the United States. This tradition started as a means to combat the over “stuffed” feeling many Americans feel after gorging on a traditional Thanksgiving feast.
• Pumpkin Patches per Capita*: Full Weight (~4.17 Points)
• Google Search Interest for Thanksgiving Celebrations: Full Weight (~4.17 Points)Note: This metric measures the real intent of the population to find information during the month of November about “Thanksgiving activities”, “Thanksgiving dinner”, “Thanksgiving traditions”, “Thanksgiving holiday”, and “Thanksgiving parade”.
• Holiday Decoration Shops per Capita*: Full Weight (~4.17 Points)

Affordability – Total Points: 25

• Cost of Thanksgiving Dinner: Triple Weight (~15.00 Points)
• Prevalence of Affordable Restaurants with Ratings of 4.5+ Stars: Full Weight (~5.00 Points)
• Lowest Price for Three-Star Hotel Room for a Thanksgiving Holiday: Full Weight (~5.00 Points)

Safety & Accessibility – Total Points: 20

• Crime Rate: Double Weight (~5.00 Points)
• Perception of Safety (Safety walking alone during daylight/night): Full Weight (~2.50 Points)Note: These data are based on perceptions of visitors of Numbeo website in the past 3 years. If the value is 0, it means it is perceived as very low, and if the value is 100, it means it is perceived as very high.
• Pedestrian Fatalities per Capita: Full Weight (~2.50 Points)
• DUI-Related Fatalities in Motor Vehicle Crashes around Thanksgiving per Capita: Double Weight (~5.00 Points)
• Share of Delayed Flights near Thanksgiving Holiday: Full Weight (~2.50 Points)
• Traffic Congestion: Full Weight (~2.50 Points)

Giving Thanks – Total Points: 15

• Volunteer Opportunities per Capita: Full Weight (~3.75 Points)Note: This metric measures the number of volunteer opportunities per 100,000 residents aged 16 years and older.
• Volunteer Hours per Capita: Full Weight (~3.75 Points)Note: This metric measures the number of volunteer hours per 100,000 residents aged 16 years and older.
• Charity Organizations per Capita*: Full Weight (~3.75 Points)
• Share of Income Donated to Charity: Full Weight (~3.75 Points)

Thanksgiving Weather Forecast – Total Points: 15

• Thanksgiving Temperature vs. Average Temperature: Full Weight (~7.50 Points)
• Forecasted Thanksgiving Precipitation: Full Weight (~7.50 Points)

 Videos for News Use:

• YouTube (for web embedding National)
• Raw files (for editing into clips)

 

Sources: Data used to create this ranking were collected from the U.S. Census Bureau, Council for Community and Economic Research, Federal Bureau of Investigation, National Highway Traffic Safety Administration, Bureau of Transportation Statistics, Texas A&M Transportation Institute, Corporation for National and Community Service, Google Ads, Eventbrite, Active Network, Yelp, Kayak, Numbeo, VolunteerMatch, Charity Navigator, Chronicle of Philanthropy and AccuWeather.

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