1. For many years, 15-20% was fairly standard. Combined with a more reasonable cost of living, a waiter could live very comfortably on $2.73 an hour in today's dollars. My father was a waiter for many years; he described is actual paycheck as being largely inconsequential compared to gratuities.
The shrinking economy has created two opposing pressures: The cost of living is higher for both customer and waiter. Tipping is reduced, and waiters cannot live as well on what would previously have been an abundant salary.
2. Waitstaffing is often reduced in quantity. According to my father, a restaurant in Ohio with $40+ entrees might have a sommelier and many entrees flambeed tableside. 20% on a $200 table was justified by the increased staff and risk of waiter's potential immolation.
Today, you just get a waiter. If you want something cooked in a chafing dish, they beat you over the head with the bill. (Of which the waiter actually doesn't see any.)
3. The disproportionate spending of "whale" tables often leads waiters to favor them very heavily. If the guys next door order two rounds of beer between my seating and receipt of tap water, you're getting a short tip. Of course, I'm only augmenting the problem, but I don't actually care.
4. Waiters used to be tipped in cash. Now they get a percentage of debit. This is 100% taxed income.
A friend of mine works ~40 hours a week at a nice sit-down restaurant in rural Wisconsin. After taxes, she sometimes only takes home $800 a month in the slow season. She can either get her ulcer checked out, or she can pay rent.
The tipping system works very well as intended: A 15-20% baseline gratuity provides adequate compensation to ensure quality labor, and is proportional to the effort - either in quantity, or quality - provided. It also reduces the overhead for the owner in the event of a slow night. However, when the majority of tables offer meaningless compensation, the quality of labor reduces (you can make more tip-free at Subway) and it becomes advantageous to favor the profitable minority.
Edited by jrshaul, 09 January 2013 - 03:58 PM.