17 ms·

Just do away with tips. It's a terrible and stupid system. If you want to do it as a customer, go ahead, but it should never be considered as part of the employ

• Noos 6y ago
  I'm sure famously low margin, high risk places like restaurants can easily raise employee wages anywhere form 2 to 6 fold. As I said downthread, all a restaurant has to pay is $2.13 an hour if they make enough tips to earn an effective wage of over $7.25 an hr in a week. That's $290 a week for 40 hours of work pretax. For a tech comparison look at Amazon's Mechanical Turk. It probably is closer to the $2.13 minimum wage in practice than the $7.25 one for what I hear. Now imagine they had to raise what they paid to make sure its an effective $15 an hour based on spending an hour. You think it would still exist? Would you pay that much? Or is it's value proposition precisely because you can pay them shit wages overall?
  • boulos 6y ago
    To be clear, in California the tipped minimum wage is at least $13/hr state wide (and $14/hr for businesses with 25 employees or more). I believe in San Francisco, it’s also just strictly the same as minimum wage of $16.07/hr (and again for larger businesses, Healthy SF medical coverage is also mandatory [Edit: actually, providing coverage is, not Healthy SF, that’s just the cheapest coverage and so very common], and usually passed onto patrons as a 4% fee on their bill, though this isn’t dictated by statute). So your universe already exists: every restaurant in the state of California already ensures a minimum wage more than 6x the federal minimum.
    • etchalon 6y ago
      And … California still has restaurants? I'm told that's impossible. Raising the minimum wage will cause all businesses to close.
      • WillPostForFood 6y ago
        Only 50% of restaurant employees are out of work, not 100%.
      • boulos 6y ago
        I didn’t know about this anecdote before, but apparently Alan Krueger of minimum wage study fame had an interesting follow up: shouldn’t the federal minimum wage be too high somewhere? What about Puerto Rico? Apparently, he didn’t find evidence to suggest a strong effect there. But it’s got me curious to follow up with other territory or county vs state differences in the data. My suspicion is that the current very low minimum wages are just too low to see effects anyway, but that a federal $15/hr would be enough of a jump to see many county-level area median wages suddenly tip over.
    • rahimnathwani 6y ago
      "Healthy SF medical coverage is also mandatory" I don't think Healthy SF coverage is mandatory. From what I've read, businesses have two other options: provide a regular healthcare plan, or set aside a fund to reimburse employee healthcare costs as they arise. Restaurants usually go for that last option. "usually passed onto patrons as a 4% fee on their bill, though this isn’t dictated by statute" I find the last part of what you wrote interesting. It's true that this isn't dictated by statute. But it would be surprising and unusual for a statue to dictate that a business must make its customers pay a specific business cost. Of course, there are instances where businesses are responsible for collecting taxes from their customers (notably sales taxes and recycling fees) but these are explicitly taxes on consumers that the business is collecting for the government's convenience, not taxes on the business that the business is tricking consumers into paying, by making them believe they're responsible for them.
      • boulos 6y ago
        Good point, I updated my comment with an edit: Healthy SF isn’t mandated, providing health care is (and the very limited Healthy SF coverage is basically the cheapest option, so most restaurants do that). On the “dictated by statute”, I actually mentioned that because so many people figured it was! Much like sales tax, it’s often on the bill as if it’s a thing that the city has specified and that it was a city program (rather than the city mandating that larger businesses provide coverage). Many restaurants are quite clear about it “we use this money to pay for healthcare for our workers”, but the biggest surprise for me was that the “market rate” ended up settling at about 4%. When some restaurants instead do an $X/patron or $Y/ticket add on, it catches people by surprise. Either way, I find it amusing what people are “willing” to pay for things, especially if we can get closer to living wages for everyone. (I’m all for more “taxes” on bills that somehow people prefer over menu items going up in price). tl;dr: good point, clarified my statements!
        • rahimnathwani 6y ago
          "and the very limited Healthy SF coverage is basically the cheapest option, so most restaurants do that" If someone works only a few hours per week, the 'Healthy SF' coverage can cost more than the minimum employer spend. So it's not always the cheapest option.
  • imgabe 6y ago
    Seven US states do not allow tips to count towards the minimum wage. These places, as far as I know, still have restaurants. Not to mention most of the rest of the world. https://www.minimum-wage.org/tipped https://www.minimum-wage.org/tipped Figure out what your expenses are, and make sure you charge enough to cover them, plus profit. If you can't manage to do that you shouldn't be running a restaurant or any other business. It's not rocket science.
• bagacrap 6y ago
  In the service industry there's a big difference between doing a job and doing a job /well/. Doing a job well is incentivized by tips.
  • deleted 6y ago
    [deleted]
  • latch 6y ago
    Your parent is talking about tipped minimum wage - a minimum wage that is lower for people who make at least X in tips.
  • imgabe 6y ago
    You can also incentivize people by firing them when they don't do the job well, as every other industry does. Why are you even hiring people who aren't going to do the job well? What kind of crappy attitude is that? "I know you hired me and you're paying me and I'm here to do this job, but I'm going to do it really poorly unless you pay me extra"
    • Noos 6y ago
      the problem with retail specifically is that you are never paying enough to make that a credible threat. If anything, your staff might just turnover every two years naturally, especially if it's only a part time job. Most retail in an area either is lifer staff or constant churn; in a particularly bad job I had, we turned over entire staff almost in a year.
      • deleted 6y ago
        [deleted]
    • bagacrap 6y ago
      Do you not find that some people in the service industry do a better job than others, and make your day more pleasant as a result? > really poorly Your words, not mine. Obviously if you're consistently terrible at your job you can get fired. But what's the incentive to go above and beyond, vs "good enough"? And how are tips for a server different from an annual performance based bonus for a white collar worker? I don't hear people raging about that one.
• adammenges 6y ago
  Agreed. There're several other good articles about this. Here's one: https://www.forbes.com/sites/quora/2017/08/15/why-americas-tipping-culture-is-actually-bad-for-restaurants/?sh=49ab910013d1 https://www.forbes.com/sites/quora/2017/08/15/why-americas-t...
  • viraptor 6y ago
    Or in video form, Adam ruins everything: https://www.youtube.com/watch?v=q_vivC7c_1k https://www.youtube.com/watch?v=q_vivC7c_1k
• refurb 6y ago
  I have a few friends in the service industry who prefer the tips model since the tips are often 200-300% of their base pay. If it switched to fixed hourly pay, they'd be taking a pay cut since there is no way their hourly pay would be $30/hr.
  • jimmaswell 6y ago
    Ssh, your real world observation is getting in the way of the narrative. Can't have that.
  • sellyme 6y ago
    > If it switched to fixed hourly pay, they'd be taking a pay cut since there is no way their hourly pay would be $30/hr. Why not? I live in a country with no tipping culture and we have no problem paying service industry workers this much.
    • Noos 6y ago
      Um..medium hourly income in the USA is $21 an hour or so. I live in a decently expensive state and skilled trades, managers, and various lower-tier technical people make $30 an hour, and that's double the state's upcoming minimum wage. I really don't see how you pay them that much.
      • sellyme 6y ago
        > I really don't see how you pay them that much. But they're apparently already getting paid that much! Either people are drastically misrepresenting how much waitstaff take home in tips, or there's enough money in the economy to pay them that much.
        • alextheparrot 6y ago
          It is a difference in who decides how much they’re paid. In a traditional business their pay is at the discretion of the business and thus in competition with what could be the business’s profits. Tips are inaccessible to the business, so they get paid more closely to what consumers are ok with paying. I’m probably paying more too because of being guilted into feeling like I must tip x% because I’m directly responsible for the person’s wages. These two points mean there’s no guarantee a tipped wage would convert 1:1 into an hourly wage if we simply removed tipping, even if the value provided by the tipped employee stays constant.
• jimmaswell 6y ago
  Tips: -Incentivize doing your job. I don't expect anything crazy and give 20% as long as you did the baseline properly. If you can't be assed to read or follow a two sentence delivery instruction that says how to find me then I'm not rewarding that. -Result in taking home much more money than otherwise in many cases, else the company still has to make up the difference to minimum wage but that almost never happens in practice -Let lower income people keep more of their pay, if cash I really see no compelling argument for eliminating it. If multiplying a two digit number by 2, rounding, and moving a decimal is too hard, we all have calculators in our pockets all day.
  • sellyme 6y ago
    > Incentivize doing your job Surely keeping your job is a good incentive to do your job? > Result in taking home much more money than otherwise People are still willing to pay the same amount of currency for the same product and service. > Let lower income people keep more of their pay, if cash I don't find "this system is good because it enables tax fraud" to be a strong argument.
  • chillwaves 6y ago
    What about the argument that lets people in the higher income bracket have greater control on whether the lower wage workers will be able to afford rent that month based on their own whims?
• lettergram 6y ago
  I don’t think you’ve worked a job where you got tipped, have you? It’s actually one of the few ways people can make a lot of money for doing a good job. What you describe punishes hard work, the people getting tips would hate it.
  • deepsun 6y ago
    The best service I've seen in Japan. And they get offended by tips.
  • imgabe 6y ago
    Most jobs don't have tips. People working in them still manage to do a good job and many of them make a lot more than people in tipped jobs do.
    • trowawee 6y ago
      My PM doesn’t tip me when I complete a ticket quickly; I don’t tip QA when they catch a bug in my code; the on-call engineer doesn’t tip me when some docs I wrote save them a few hours of time fixing an issue I saw during my last on-call rotation. And yet! The company seems to keep making money and doing well, and we all seem to like each other (mostly, except for that one guy, but he doesn’t like anyone).
      • apsurd 6y ago
        tip based jobs are overwhelmingly minimum wage. of course we can argue whether that’s cause or effect, but the point is, it makes very little sense to compare literally “the minimum allowable threshold for legal employment” to professional salaried employees.
        • lotsofpulp 6y ago
          It makes all the sense because a common argument in favor of tipping is “it improves service” or that it “rewards good service”. In reality, it’s a gesture of pity for those who earn little, and who we don’t want to pay properly via decent wage regulations and increase product prices, but we want them to dance for us and have them hope we will toss a few coins their way. In the process, we get to feel good like benevolent dictators who have chosen to be generous and share their wealth.
• xirbeosbwo1234 6y ago
  I'm kind of intrigued by the opposite idea: extend the system of tips to everything. I'd gladly add a tip to many things I buy if I knew that it would go entirely to the workers and not one penny would go to the owners, managers, or executives. Tips are a kind of direct income redistribution. If I think someone deserves more money, I can directly give it to them. There's no middleman, no politics, and no stigma about charity.
  • siquick 6y ago
    This should never ever be a thing. Buyers already pay enough tax as it is without another stealth tax that employers can take advantage of.
    • xirbeosbwo1234 6y ago
      It's something I wish I could do. It's not a system I would know how to implement. I certainly agree that the existing system of tipping doesn't work very well.
      • siquick 6y ago
        We don't have tipping in Australia but in most cafes, restaurants and bars you can expect good service. A better thing to fix would be to improve people's general happiness by paying them a dependable wage and giving them good health care - you'll probably find they are happier at work and better at their job.
  • endisneigh 6y ago
    My understanding is if what you proposed happened it would be regressive as less money would go into unemployment due to the substantially reduced payroll taxes collected.
  • michaelmrose 6y ago
    People are by and large terrible. They are stupid, incompetent, their own worst enemy, rude, degenerates. They expect to behave like assholes and expect customer service to kiss their asses. Furthermore they are regularly in a semi adversarial relationship with staff because empowerment to help out creates the power to give customers things that may contextually make sense situationally one off but be profit destroying if used broadly. This means that I can corruptly earn more by giving away the store for example. You may be nice and courtesious but making everyone in every case dependent upon assholes for their daily bread will work only if you can reform the human race first.
• buzzdenver 6y ago
  It's been tried in restaurants many times and usually with negative results. People balk at higher prices on the menu.
  • accountofme 6y ago
    Not true. Australia does not have tipping in it's culture. We pay our wait staff fair and reasonable rates (legally mandated btw). I don't really think our food costs are too much higher than the USA. And people eat out ALOT here. Food tastes good, service is good. People want to come back. Please expand your horizons.
    • xur17 6y ago
      I think the issue in the US is that it has only been tried at a store level rather than at a state or country level.
      • lotsofpulp 6y ago
        The whole west coast and many major cities in the US have eliminated the lower tipped minimum wages. But the societal norm is to still expect to tip 15% (although some would say 20%) in tips.
    • Clewza313 6y ago
      Eh, service in Australia is generally not particularly great. This is often a function of staffing though, since wages are expensive (national minimum wage $19.84/hr) and many Australian restaurants consequently either operate with a skeleton staff, pay under the table (migrants/students are brutally exploited), or both. Japan, on the other hand, has incredible service and absolutely no tips.
    • decker 6y ago
      Never having a tipping culture is a much different thing than having to transition from one that tips to one that does not. Did Australia have tips then do away with them at some point? If so, how did they pull it off?
• neilv 6y ago
  This is a reasonable comment, and seems a fairly popular idea. But is this the most important comment thread, to be voted to the top, on this particular post? The topic of the post is alleged blatant theft of tips. The question of whether there should be tips in the first place could be a diversion from the more immediate topic.
  • deleted 6y ago
    [deleted]
  • baby 6y ago
    No tips = no theft and people actually get paid a wage that allows them to live well.
    • helmholtz 6y ago
      But what about the people who have actively just been shortchanged out of 61.7M USD in tips? Surely that' the topic here?
      • katbyte 6y ago
        Well as a Canadian I’m going who the hell tips the Amazon delivery person
        • eigenvector 6y ago
          I agree that of all developed countries, tipping is most prevalent in the USA, but as a fellow Canadian I wouldn't assume our Amazon delivery people are being paid anymore. They are independent contractors and not subject to minimum wage laws. If anything, their effective wage might be lower because vehicle operating expenses are higher in Canada.
          • gambiting 6y ago
            I understand that part, I don't understand the part where people find it acceptable to tip the delivery person. It's just not ok, unless they brought your fridge up the stairs or something then sure, I'll slip in a little something for the effort. But an amazon delivery driver? Where they drop the parcel at my door, ring the doorbell and leave? Why would I ever tip them? The same with food delivery drivers - I open the door, say "hi" grab the food and they are gone. There is nothing there to tip for.
• ben509 6y ago
  Tips are fundamentally broken. If you didn't know about tips, and someone offered you a job and said, "I'll pay you crap wages, but you can ask the customers for more money. Don't worry, they'll pay or their friends won't like them," you'd think it was a scam because it's such an obviously terrible deal. Tips are an awful way to incentivize good service. I'm neither qualified to judge my server's performance, and I've got very limited and potentially misleading information about what a reasonable expectation is. I've got no idea what small crises my server had to deal with, or how other customers are treating him. And because tips are everywhere now, nobody knows the going rate for most tips. Obviously tourists have no idea how much to tip. If I reduce the tip, the waiter is only finding out that I was unsatisfied after it's too late to fix anything. But tipping up front makes the exercise entirely pointless. And the moralizing of tips is stupid. Many moral arguments paint people in the service industry as paupers or victims, but a basic level of respsect has to assume they're competent professionals who chose this line of work. A tip is not an act of generosity, either, you're paying a fee for a service rendered. And that's why, as a system, the morality of tipping is entirely backwards: it rewards people who rip off their servers. The thing that really bothers me are the awful motivations behind tipping: being control freaks, conspicuous consumption and all the slimy business incentives to push their payroll onto their customers.
  • ARandomerDude 6y ago
    You're absolutely right, given the premise that we tip to incentivize good service. In reality, we tip so businesses can advertise an $18 meal for $14.99.
    • ryoshu 6y ago
      Exactly. We aren't necessarily pushing the payroll onto the customer, we're discounting the cost of a dish at the expense of the server. And to the parent's post, that's an arbitrary decision that sometimes works out and sometimes doesn't for the person making half of minimum wage.
    • Cthulhu_ 6y ago
      And also so that customers can dangle a tip in front of an underpaid, overworked employee, only to snatch it away if they don't smile or go to church or insert some arbitrary reason here. It's both consumers and employers who keep the tipping culture and its toxicity alive. I mean the one time I was in the US having breakfast or lunch at some random place. They had at least five staff milling around for twenty-five customers, probably more (staff I mean). You don't need to have two teens frantically going around with pitchers of water, just plop one down on the table and pay the remaining employees a good wage. A good wage is not minimum wage either. Minimum wage is a "what is the least I can legally pay this employee", while as an employer your mindset should be "how much is this employee worth and how can I make them feel appreciated"
• yibg 6y ago
  Tips have become so detached from their original intention too. I've been to so many places (pre-covid) that asked for tips upfront during checkout before I've received any service. How would I know what the service would be like and therefore how much to tip? Might as well call it a surcharge and be done with it. I guess same thing now with food deliveries, but at least I can change the tips (I think?) afterwards if something wasn't good.
  • ddingus 6y ago
    I recently visited a place where it was forced hard. If one did not know the POS device, it is baked in. And, the cashier tells the customer to go ahead and pay, then walks away to fetch their order, leaving them no obvious option other than to select 10, 15 or 20 percent, or the awkward position of asking how to manage the tip. I have not gone back. I tip, because of the system and the position the labor is in, but I do not appreciate the aggression. I do, however, understand why. Would much rather see everyone paid well, move bad service to a social issue, and proceed from there.
    • ryanbrunner 6y ago
      Are you not from North America? It's more or less impossible to find a restaurant that doesn't have that integrated on their POS systems in the U.S. or Canada. Honestly, 10/15/20 are fairly conservative suggestions, I feel like I see them start at 15% pretty much all of the time.
      • lotsofpulp 6y ago
        I’ve always seen a “No Tip” option in the US. And if I didn’t, I certainly wouldn’t patronize them. 10% for a cashier giving you your order is insane. Am I supposed to be giving a 10% tax to all of my cashiers now?
        • ddingus 6y ago
          Yes, me too. This one did not gave it, though a button did skip. Un indicated.
• efwfwef 6y ago
  I've said it before, the only way to get out of the tipping culture is to stop tipping, and to continue to fight for a raised minimum wage. There's just no way around it, that's how some other countries got out of the tipping culture too. Shaming others who don't tip, and tipping when you go out, just contributes to the problem. If people understand that tipping is actually less of a thing, then the pressure will be on the employers, not the customers. I know I'll get downvoted for saying that, because we're still much in a "if you don't tip you're an asshole" culture. But I personally have decided that I will contribute to the solution by not tipping.
  • owlmirror 6y ago
    I've worked as a waiter during my university time and tips were the best thing in the world for someone that did not need any real qualifications. My wage alone would have barely covered my expenses but with tips I paid all of my living costs and could put aside a bit for my future. It was a system I liked as an employee since even when there were few customers I had not to worry too much about getting laid off immediately and the tips I received more than made up for my low wage. People who don't tip out of some principle with no viable alternative at hand other than saying make service employees miserable so that they will change a system that works for them are worse than those that simply are greedy in my opinion, such customers at least do not delude themselves that they are doing Good ™
    • tharax 6y ago
      You were frustrated the customer didn't pay you an arbitrary amount to live off based on their mood instead of frustrated that your boss didn't pay you a legally mandated amount to live off. The worst part about tipping culture is that somehow bosses have convinced their staff to be upset at customers.
      • ryandrake 6y ago
        We’ve got to stop thinking about tipping as “the customer giving money to the server as a reward for good service.” and start thinking about it as “the customer subsidizing the business owner so he can save money on wages.” How did making payroll become the customer’s job and moral duty?
• melomal 6y ago
  Each time I order with Glovo I tipped with cash directly to the driver. The 'online' tip has to be one of the dumbest features ever and just stinks of something shady going on.
  • kortilla 6y ago
    Or, you know, people don’t keep a lot of spare cash to tip because every other transaction is cashless.
• hntrader 6y ago
  What I dislike about a culture of tipping is that in effect it's a transfer of wealth from the generous+agreeable customer to the greedy+disagreeable+shameless customer. I still advocate tipping since it's a nice thing to do and probably improves your happiness, but I think it's healthier in the context of a no-tipping culture where wages are sufficient and baked into the price of the service.
  • kortilla 6y ago
    > What I dislike about a culture of tipping is that in effect it's a transfer of wealth from the generous+agreeable customer to the greedy+disagreeable+shameless customer. No it’s not. You would not tip any less if you knew there were other people at the restaurant who had no intention of tipping. It’s strictly a lost potential income to the server when they land a cheap customer. It may not actually cost them anything at all if it’s not busy and they were able to take on the additional customer without losing a potentially higher paying customer slot.
    • etchalon 6y ago
      I think I'd probably tip more.
    • hntrader 6y ago
      It is. Prices for basic services are lower in tipping cultures, ceteris paribus, since staff wages are a component of price, and staff wages are lower in a tipping culture since they make part of their income from tipping. Hence, the cheap customer benefits to the maximum in a tipping culture since the prices they're paying are artificially lower as they've been subsidised by tippers. That's why it's a transfer of wealth from the generous to the cheap. It's got little to do with whether the generous decide to tip more in the presence of the cheap (although that may be a small part of it), it's about the indirect and hidden subsidisation through service price.
      • ComodoHacker 6y ago
        When you s/cheap customer/poor customer/ the whole thing sounds slightly different.
• dvfjsdhgfv 6y ago
  I appreciate your comment but it's tangential to the article - in this case it's not really about tips but stealing from people who depend on you, and basically getting away with it.
• Cthulhu_ 6y ago
  Consumers / customers should also be on board with this though; there are plenty of experiments in e.g. the service industry with a "no tips" policy, and especially the older generation has problems with it. The same type that will use low/no tips as "punishment", mind you.
• beckman466 6y ago
  > If people aren't willing to do the job for the hourly wage alone with no tips, raise the wage until they are. Agree with the first part, but would rephrase this second part as: If people aren't able to live off a minimum wage salary to do the job for the hourly with no tips, raise the minimum wage until they are. This isn’t an issue people can solve on their own by changing jobs. It’s a systemic problem where the minimum wage has been stagnating for years, while the cost of living has been skyrocketing, and thus felt most by non-knowledge workers.
• globular-toast 6y ago
  I have the same problem with any "bonuses". Everyone who is paid a bonus inevitably starts thinking about it as part of their income. Banks don't help this as many of them will take bonuses into account when supplying loans. But your employer doesn't think of bonuses this way. Your employer thinks of a bonus as part of your pay they can take away at a moment's notice for any reason at all. Many of them will try to put workers on a lower salary and claim that the bonus makes up for it. Say no to bonuses! Agree what your time is worth and stick to it!
  • Cederfjard 6y ago
    Isn’t the whole point of bonuses to make a position more attractive, by offering a possible total compensation that’s higher than would be financially feasible/responsible if it was all guaranteed? So might be a worthwhile trade-off for an employee, depending on their appetite for risk. Unless you think it’s a scam and most companies could afford to pay you the higher salary but decide not to. I’m not sure that would be very sustainable though.
  • P_I_Staker 6y ago
    Wouldn't that be the point of bonuses? It's not inappropriate in all cases, if it lets the org pay you more now without committing to do so forever, even if the market turns around. Otherwise you have to deal with painful cuts, or even people losing their jobs. Depends on the circumstances, and I agree it's bad to use as a wage suppression tool. Would you rather not have the money, so it doesn't feel like anything's being "taken away from you"?
• mschuster91 6y ago
  > If people aren't willing to do the job for the hourly wage alone with no tips, raise the wage until they are. This would be the case in a normal free market, but unfortunately the labor market is not a free market as people don't have the choice to work or not to work - they need to work to survive. As long as millions of people are out of a job, there will be millions desperate to work even for under minimum wage, ready to replace anyone who quits. This is why there are two things needed - first, a minimum wage not defined in dollars (to account for rent and other CoL differences) but in "is enough to rent a decent home in the area and live without a second (or worse, third) job or government assistance programs", and second, a universal basic income that fulfills the same requirement. Only then, when people have the freedom of choice between working or not, will labor prices reflect the true value of the labor.
  • ntsplnkv2 6y ago
    This doesn't work. Anyone can be a waitress or waiter. The labor is inherently low value because it's an easy job. Raising the minimum wage will just subsidize jobs that have less actual value and it will be a net loss to society. UBI could work because it redistributes the overly concentrated wealth gained from technology from the ultra rich across society. But raising the minimum wage does not.
    • mschuster91 6y ago
      > Anyone can be a waitress or waiter. The labor is inherently low value because it's an easy job. Having done a stint in barkeeping myself, it's not an easy job at all and there are many people who aren't cut for it. You have to be resilient enough to deal with all kinds of customers (the "Karen" meme is based in way too much reality) and their issues no matter how you are feeling yourself, it's a job that's quite taxing on your body and honestly it's exhausting. > Raising the minimum wage will just subsidize jobs that have less actual value and it will be a net loss to society. That reminds me of "A brief history of corporate whining" (https://i.imgur.com/NBSaqzi.png https://i.imgur.com/NBSaqzi.png). When Germany introduced the minimum wage for the first time years ago, we had the same argument, and as expected it turned out to be nothing but whining. Right now, the taxpayers are subsidizing jobs anyway: 70% (!!!) of SNAP/food stamps or Medicaid recipients work full time, with McDonald's and Walmart being in top spots (https://www.cnbc.com/2020/11/19/walmart-and-mcdonalds-among-top-employers-of-medicaid-and-food-stamp-beneficiaries.html https://www.cnbc.com/2020/11/19/walmart-and-mcdonalds-among-...). These companies could also pay their workers a living wage and provide them with medical insurance and still be profitable!
• sokoloff 6y ago
  I’m pretty sure that a lot of cash tips go unreported as income, which many recipients see as a feature.
• kryogen1c 6y ago
  this is sort of a microcosm of socialism vs capitalism. that being the complex discussion that it is, i think your claim that its a "terrible and stupid system" is far from obviously true, if true at all. 1) its entirely possible and common to make a living wage in the tip system. my wife and i just ran the numbers and she grossed ~17$/hour between her two restaurant tip-based jobs - during COVID with capacity restrictions and lack of patronage (for cost of living reference, our house is ~$125/square foot so we're certainly not in NY or SV). 2) the tip system provides opportunity. it is a way for someone with no skills, education, prospects, or CV to start making steady money. eliminating it increases the risk for hirer as they their hiring cost changes astronomically from ~3$/hr to 10-20$/hr. this will close a window for advancement as taking chances on under-performing employees is more expensive; this results in an increase in heritable wage stratification as another path to the american dream is closed. 3) performance incentives are good by definition. you want all systems to have incentives aligned with the desired outcome. i dont see how removing the incentive structure improves the outcome for anyone except bad servers. 4) restaurants dont get a cut of tips. it is a direct transaction between customer and server (less taxes, obviously). this is the peak of efficiency. by forcing restaurants into being a middleman, you are creating a rent-seeker and lowering real economic output. 5) 2 and 4 make it more dangerous to open a new restaurant. raising the bar for entry into any business scenario is generally undesirable and produces less competition and creativity. less success and more expensive failure.
  • imgabe 6y ago
    > its entirely possible and common to make a living wage in the tip system. It's also entirely possible and common to make a living wage without tips. Most people do. > the tip system provides opportunity. it is a way for someone with no skills, education, prospects, or CV to start making steady money. So does every other entry-level or unskilled job. There is nothing magical about tips. > eliminating it increases the risk for hirer as they their hiring cost changes astronomically from ~3$/hr to 10-20$/hr. This is not a risk that should be eliminated. It's your job as a business owner to pay your employees. It's not your customer's problem. Every other business that is not a restaurant seems to be able to manage this, there's no reason they shouldn't be able to as well. > performance incentives are good by definition. you want all systems to have incentives aligned with the desired outcome. i dont see how removing the incentive structure improves the outcome for anyone except bad servers. Performance incentives should be provided by the employer. If I go to a restaurant, I'm not interested in taking on an unpaid job as a restaurant manager. I just want to eat a meal, not conduct employee performance reviews. > restaurants dont get a cut of tips. it is a direct transaction between customer and server (less taxes, obviously). this is the peak of efficiency. by forcing restaurants into being a middleman, you are creating a rent-seeker and lowering real economic output. The restaurant is already a major component of the transaction. The transaction would not even exist if not for the restaurant, why shouldn't they be a part of it? I didn't personally hire some guy off the street to fetch food for me. They're the restaurant's employee. > 2 and 4 make it more dangerous to open a new restaurant. raising the bar for entry into any business scenario is generally undesirable and produces less competition and creativity. less success and more expensive failure. It's no more of a bar to entry than any other business that doesn't depend on tips.