RE: Tipping. The customer ALWAYS pays the wages

[FrodosPet]

Thinkaboutit.

When income is less than outgo, you eventually run out of money.

In order to get rid of tipping, prices need to be raised. Upside is that makes who is ultimately paying the wages (or profits, in the case of independent contractors) more egalitarian.

Downside is many people are always looking for bargains, and will go to the cheapest place.

[hobbit709]

1. Or maybe the owner can make a little less profit.

My housemate works at a restaurant where they won't pay more that $10/hr to anyone. The main manager gets $120K/yr, the other two managers get $80K/yr. The owner gets $25K/mo off the top at each of the 4 restaurants that she owns.

[FrodosPet]

2. How many employees at each restaurant?

I am assuming these are fairly big restaurants. So it took a chunk of change to build and equip them. And it takes perhaps 30 to 40 employees per store.

Is the owner paying back loans? Or is the 25K after debt service?

What do you think an acceptable profit for the owner would be?

Note: I'm a blue collar guy myself. You are probably right in this case that the owner could be a bit more generous with the rank and file. Nevertheless, the owner is probably working 60 to 70 hours a week, and risked either personal savings or debt to start the business.

[hobbit709]

20. The restaurants have been around for over 40 years. Long paid for.

The owner does not put in any time at any of the four places. Total employees is over 200.

that $25K/mo is off the top plus whatever the books show as profit at the end of the year-$25Kx4 is $100K per month. Needless to say there's no profit sharing with the staff.

[rogerashton]

3. Of course. But the theory behind tipping is a little odd.

The theory seems to be that the waitperson will have an incentive to provide good service, hoping to be rewarded by a big tip. But what is the customer's incentive to reward the service with a big tip? If you expect to return, then it will make sense to tip. Although, if it is one of those places where the staff turns over from day to day, maybe not even if you expect to return. Anyway, a one-off customer will never have an incentive to tip. Nevertheless, people usually do tip. If you buy the incentives story, this is crazy.

(On my 65th birthday, feeling a little giddy, I way overtipped the barkeep at a tav I go to from time to time. That was an investment that paid off, for a few years! But he is no longer working there.)

Returns to the same establishment are the real story, though. The idea behind tipping is that the waitperson is a servant -- and the servant of the customer, not of the restaurant proprietor. In Barcelona while the anarcho-syndicalists were in charge, during the civil war, the worker-run restaurants abolished tips with the slogan that restaurant-workers are no longer slaves.

On the whole, tipping might lead to better service, at least for "regulars," or it might not. It might turn out that waitpeople who are paid by the restaurant and see themselves as valued employees, not as free-lancers or slaves, might provide better service to everybody.

Yes, the prices would have to be higher to cover higher wage payments. But probably no higher than the prices plus tips paid by a smart "regular." And the service at least as good. Of course, we don't know for sure until it is tried.

My guess -- tips are a relic of medieval economy.

[Turbineguy]

4. This discussion took place in the Netherlands

when tipping was abolished in the '60's. The bills became "inclusive". In the end it worked out fine. But in the beginning not so much. The unwritten rule is, you pay the bill with folding money and leave the change on the tray.

Still, leaving it to the customer's generosity is a zero sum game. It leaves restaurant workers with an unstable income and some customers without incentive to return.

If I owned a restaurant I would want the workers to work to me and not the customers who tip the most.

Also under the current system there are people who do not participate in the tips, yet they make the whole thing work as well. Getting rid of tipping some people and not others puts everybody on the same team.

[Kilgore]

5. Two perspectives on tipping

The first is mine, the other is my daughters.

Having to travel on business way to much finds me in many restaurants. I consider tipping a way of thanking the waitperson for superior service. The slacker, not so much.

As I have posted elsewhere, My daughter has been a full time waitress at a popular steakhouse for the past five years. She regularly makes between $150 - $200 per night in tips. That's between $18.75 and $25 dollars an hour just in tips. Our state has the same $9.32 minimum wage tips or not, so she ends up making around $30 an hour average. She has a BA and makes much more than getting a job using her degree.

I know her situation is not average, but just want to point out that working for tips is not always a bad deal.

[DemocratSinceBirth]

15. Exactly, my buddy was an assistant manager at a mid level steakhouse.

Many of the waiters and waitresses earned more than him.

[edhopper]

6. My average tip is 18%

In NYC if you just double the tax, it's around that number.

If they raised prices by that much so the waitstaff made a better, more secure living, i would pay the same and they ould do better.
I could leave an extra buck or two if the service was superb.

So we get better work conditions and no increase to the customer, win-win.

[madville]

7. Tipping demographics are interesting

Damn teenagers, coupon users and foreigners!



http://m.huffpost.com/us/entry/5106466

[Glassunion]

8. Interesting.

From my own experience I'd have to agree with some.

[FrodosPet]

23. This chart is pretty close to spot on

Personally, I still try to give superior service to all those groups.

Other drivers? Not so much. When I was working in transportation sales, it could be difficult at times to get cars to people in the less generous groups.

[wavesofeuphoria]

12. hmm ... now lets see their incomes overlaid with this chart too!

[madville]

14. Makes sense

White people typically earn more than most other groups and men have higher average incomes than women so it would make sense that white males are towards the top.

[treestar]

16. How did they determine who was a Jew, Christian, foreigner or gay

otherwise it could be pretty accurate.

[Iggo]

18. LOL...right?

:hmm:

[tammywammy]

9. When I've visited countries with no tipping

I do find that the cost is comparable to what I would have paid in the US with tip.

I wish we'd go to non-tipping. I think the people that would get upset are those that are shitty tippers already or the ones that like to use the "power" of tipping to lord over their server.

[Downwinder]

10. Do you tip the airline pilot

for getting you to your destination on time or for making a smooth landing? How about the flight attendants for making your trip comfortable? Ever left a tip on the hospital bed when checking out?

[FrodosPet]

22. 1. I can't afford to fly anywhere

2. See #1
3. No, but I leave a tip for the maid when I check out of a hotel or motel.

As someone who worked in restaurants in my youth, and who drives cab now, I know how important tips are. Both financially and emotionally. I tip, nearly overtip, anybody who it is customary to tip unless the service is bad because they don't care. If it is bad because of a "shit happens" day, I still tip.

Above and beyond any financial needs on their parts, I feel like it creates a positive bond and demonstrates gratitude with people that provide me a needed or wanted service.

[Orangepeel]

11. Sure. So?

Yes, menu prices would be higher if the tip were included instead of optional. So what? The price to get your car fixed would be cheaper if you only paid the garage and could choose whether or not to tip the mechanic. That doesn't make it right.

People who tip a decent amount now would pay the same, people who don't could get takeout, like they should, and the customer would complain about poor service the way the do in every other industry.

[Reter]

13. No server is going to support eliminating the tips

For us to agree on this, you're going to have to make our salary $20-$25 an hour. Because that's what most of us get paid now.

[madville]

17. That's about what my coworker's wife makes

She works a 6 hour evening shift at a local BBQ place, averages around $20-25 an hour and does five shifts a week. $600-750 a week isn't terrible for a part time job.

[Iggo]

19. "In order to get rid of tipping..."

Get rid of it?

I tip because I like to tip, and that'll never stop.

[Maeve]

21. According to the Bureau of Labor, the mean hourly wage is $10.04 for waitstaff

http://www.bls.gov/oes/current/oes353031.htm

Yeah, some earn $25+ an hour, but they are not typical.

[ProfessorGAC]

24. Another Downside

I don't think (my information may be out of date because it's been 4 decades since i worked in a restaurant) that servers are required to claim every penny of tips.

Even if i'm wrong, let's face it, with no paper trail most servers are not going to.

It the gratuity is incorporated into the price and even if the wages go up exactly as they would need to,
every dime is now going to be taxed, including SS, SSDI, WC, UEI, etc.

Restaurant workers might see their after tax wages go backward.