I hate tipping. But it's pretty much expected everywhere, and, as you said, people aren't paid a living wage in many jobs (mostly waiters, I think), so you feel like you have to tip them. It's gone completely away from the idea that if someone has treated you exceptionally well, or worked especially hard for you, you can reward them with some extra money that goes directly to them and not to the establishment. However, now, it's become something expected whether it's been earned or not. A waiter in a good (pricey) restaurant or club can make a hell of a lot of money in one night. And, although they have to report a believable figure to the IRS, I'm sure it's easy to slip several hundred dollars past them each week. :)
ETA - and, the expected amount seems to have increased from 15% to 20% in most cases.