3 ms·
So essentially subsidizing the profit of the employer and subsidizing the cost of the goods that people who aren't adhering to the implied price structure are p
by blhack 10y ago
So essentially subsidizing the profit of the employer and subsidizing the cost of the goods that people who aren't adhering to the implied price structure are paying (non-tippers)!
I wonder how this came about? Like was this something a clever businessperson invented at some point? It sounds like the US is the only place with a tipping culture like ours.
- whathappenedto 10y agoOne other side effect which is generally not discussed because it's contentious, is that a number of people who receive tips will underreport their tips. Especially those who receive cash tips. So the state and federal governments are partially subsidizing their wages too.
- SilasX 10y agoI don't think "subsidizing profit" is an effect of the tipping system; what the restaurant gains in lower wages, it loses in higher effective food prices. In fact, I think, ignoring the tax evasion effect, the tipping system reduces profitability, because it scares away business by that "compensate-for-unpredictability" tax, which takes from what could be restaurant revenue.