5 ms·

Thought experiment: what would happen if tipping was made illegal? Would restaurants go out of business because they couldn't pay their servers enough because

Thought experiment: what would happen if tipping was made illegal? Would restaurants go out of business because they couldn't pay their servers enough because their patrons weren't willing to pay when the actual cost of dishes was made explicit on the menu? Or would restaurants ditch table service? Or would waiters settle for a new lower wage?

atonse 9y ago
What usually happens is that restaurants institute an across the board 18% service charge on all receipts. That covers tips for all the staff. There are a couple restaurants that have had good success with this.
- eropple 9y ago
  There are, but at the same time there are restaurants that have had a lot of trouble with this approach because it raises the perceived price of the restaurant. It really seems damned-if-you-do.
  - cstejerean 9y ago
    Sure, if only some restaurants in an area do this. But what if they all did it?
    - eropple 9y ago
      I'm not trying to jump on you, but I rarely find "what if"-inging collective action problems to be a particularly useful mode of thinking. "What if"--but they won't, so perturb not those electrons and stick to the real, yeah?
      - cstejerean 9y ago
        You are missing the point. Changing the law forces all restaurants to play by those rules. If only a handful of restaurants decide to pay livable wages and therefore raise their prices then their competitors will be cheaper. So we know this doesn’t work well. But if minimum wage rises for all restaurants then they will all be on a level playing field. That was the “what if” I was referring to. Let me give you another example. If one or two car dealerships decide they don’t want to be open on Sundays then their competitors will get that business. So everyone is forced to be open both days to be competitive. But what if all dealers were closed on Sunday? Well, in that case consumers would be forced to do all their car shopping on a Saturday and nobody would lose any business. So this is exactly what happened in Texas. The dealers lobbied to make sure car dealerships can only be open one day per weekend (either Saturday or Sunday, but in practice they all chose Saturday to be open). So that’s the value of asking “what if”.
Pxtl 9y ago
Many countries have no-tipping cultures. Generally, more eateries are takeout or otherwise self-serve outside of the USA - not because of the tipping, but because of the hellishly low wage servers are paid before tips, allowing American restaurants to effectively pay servers peanuts when business is slow. Other first world countries' servers are more expensive, and so less plentiful.
dboreham 9y ago
It doesn't have to be a thought experiment : just travel to pretty much any other country in the world besides the USA. Surprise: people are running restaurants, not going broke, and waiters are paid for their time like most other workers.

atonse 9y ago

What usually happens is that restaurants institute an across the board 18% service charge on all receipts. That covers tips for all the staff. There are a couple restaurants that have had good success with this.

eropple 9y ago
There are, but at the same time there are restaurants that have had a lot of trouble with this approach because it raises the perceived price of the restaurant. It really seems damned-if-you-do.
- cstejerean 9y ago
  Sure, if only some restaurants in an area do this. But what if they all did it?
  - eropple 9y ago
    I'm not trying to jump on you, but I rarely find "what if"-inging collective action problems to be a particularly useful mode of thinking. "What if"--but they won't, so perturb not those electrons and stick to the real, yeah?
    - cstejerean 9y ago
      You are missing the point. Changing the law forces all restaurants to play by those rules. If only a handful of restaurants decide to pay livable wages and therefore raise their prices then their competitors will be cheaper. So we know this doesn’t work well. But if minimum wage rises for all restaurants then they will all be on a level playing field. That was the “what if” I was referring to. Let me give you another example. If one or two car dealerships decide they don’t want to be open on Sundays then their competitors will get that business. So everyone is forced to be open both days to be competitive. But what if all dealers were closed on Sunday? Well, in that case consumers would be forced to do all their car shopping on a Saturday and nobody would lose any business. So this is exactly what happened in Texas. The dealers lobbied to make sure car dealerships can only be open one day per weekend (either Saturday or Sunday, but in practice they all chose Saturday to be open). So that’s the value of asking “what if”.

Pxtl 9y ago

Many countries have no-tipping cultures. Generally, more eateries are takeout or otherwise self-serve outside of the USA - not because of the tipping, but because of the hellishly low wage servers are paid before tips, allowing American restaurants to effectively pay servers peanuts when business is slow. Other first world countries' servers are more expensive, and so less plentiful.

dboreham 9y ago

It doesn't have to be a thought experiment : just travel to pretty much any other country in the world besides the USA. Surprise: people are running restaurants, not going broke, and waiters are paid for their time like most other workers.