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The restaurant industry has known the solution for a long time but everyone wants to pretend it would be too difficult. Stop the tipping guilt trip placed on t

The restaurant industry has known the solution for a long time but everyone wants to pretend it would be too difficult. Stop the tipping guilt trip placed on the public, raise your prices 20%, and pay your employees a livable wage. The public will still show up to eat in your restaurant.

namdnay 5y ago
Honestly, as necessary as that is, it’s not a magic solution. People are quitting the restaurant industry in France too, despite having none of the tip silliness. It’s just that people are realizing that there are easier minimum wage jobs than working in a kitchen
- ashtonkem 5y ago
  Perhaps the industry is not sustainable then.
  - AnIdiotOnTheNet 5y ago
    I agree. It seems that most people's "solutions" to this "problem" are various ways to make people's live more miserable and keep them desperate enough to work shit jobs for low pay. I guess a lot of people are just fine with having a slave class as long as it means they don't have to be inconvenienced in any way. If this industry literally cannot afford to pay people a living wage, if no one wants to work for them and they can't remain profitable by making working conditions better, then they just shouldn't even exist.
    - wonderwonder 5y ago
      Most eye opening part of the pandemic was the fact that in the US the majority of people dubbed as essential and forced to work were also the people paid the least. Grocery workers standing there with 2 masks on making minimum wage while the rest of us waltz in take what we need and return to the relative safety of our remote work. Then making fast food workers essential instead of paying them unemployment was just taking things to another level of pettiness.
  - rusk 5y ago
    Maybe a cut in VAT would help? Although that probably doesn’t help in the states …
    - Hjfrf 5y ago
      If you're taking about the UK, the obvious starting point would be ending subsidies for buy-to-let. In a pandemic with vast spending deficits, the government is giving out mortgage holidays, 95% mortgage scheme, stamp duty holiday etc.
      - bencollier49 5y ago
        I think some of this might be down to a lot of pensions being invested in property. It feels a little bit like the dam is bursting in several places at once; I'm not hopeful.
    - ashtonkem 5y ago
      The history of tax cuts in order to help out workers is .. not great.
  - darth_avocado 5y ago
    It used to be. When ordering food in a restaurant was a special thing for special occasions. It was expensive to eat out and the workers were compensated for it. Then we got to a place where food was supposed fast, cheap and accessible to everyone at any time. And suddenly you couldn't charge a lot for your food and worker wages stagnated. Sure more people work in the restaurant industry than they ever did before, but that's what happens. Quantity over quality in almost any service industry always means abundance of the service at the expense of the workers. Take a look at the rideshare business.
    - danaris 5y ago
      I mean...to what extent does this correlate with the nationwide stagnation of real wages? If your average American working a full-time job can't afford to eat out at high enough prices to keep restaurants afloat while paying decent wages, that sounds like a systemic problem—and we already know that one of those exists here.
      - namdnay 5y ago
        I guess it depends how often you expect to eat out. If it’s once a month, I think most can afford more expensive restaurants
        bluGill 5y ago
        Once you learn to cook you won't eat at anything less than the most expensive. It is really hard to enjoy a meal when you are thinking "I could have done this better myself at less cost". Chains and fast food just don't provide the quality I demand for the most part, and even the independents are hit and miss.
        SketchySeaBeast 5y ago
        In this case you're trading out your effort for the cash. I'm happy to trade my money, which I earn much more efficiently at my job than I can save by cooking, for the food so I don't have to put in effort and can enjoy my evening out with friends. I'm also more than happy to pay a couple of dollar premium to eat fast food than try to recreate it on my own while I'm running to work.
  - imtringued 5y ago
    The modern service job isn't meant to be sustainable in the first place. It's entirely based around the idea of having surplus labor using it inefficiently. Any sane economist that has to solve for the constraint "everyone has to provide for themselves" aka the mythical republican "responsibility" would first start by creating enough jobs to reach full employment. When you leave everything up to responsibility you also have the duty to provide everyone with the ability to live up to their responsibility. Society as a whole doesn't benefit from exploitation or unsustainable businesses.
- jcun4128 5y ago
  hehe I escaped into tech, but I remember washing plates listening to podcasts listening to Changelog while riding my bike at night after getting out of the factory
- yepthatsreality 5y ago
  Sure but this goes beyond restaurants in my opinion. Look at these states that had mass migration of people during the pandemic. You will find the (big) sky-rocketing cost of living where those who are moving in on a whim are also not seeking jobs in the state. However all these businesses need employees to handle the new increase in customers. The employers aren’t raising their wages either, which is also not attracting people to work. When the lower classes are forced to move elsewhere (Outside the cities) then this problem will get worse. Return to office might have some reverse effect but online remote employees can be one of the biggest generators of this problem.
  - conductr 5y ago
    > The employers aren’t raising their wages either They are. It takes time but they are. I work in a business that is having a hard time hiring entry level healthcare workers because Walmart and Amazon warehoueses is now paying $15-20/hr when it was only $12 pre-covid. Walmart and Amazon would only raise wages if they truly had a labor supply issue, which they do, we all do.
    - andechs 5y ago
      Walmart and Amazon raising wages allows them to exercise their huge scale to further crush their competitors. With their huge efficiencies of scale and deep cash reserves, they are better able to offer higher wages than competitors. During the pandemic, both Walmart and Amazon have seen huge growth. They can continue this growth post-pandemic by squeezing their competitors on wages, and eventually emerging with less competitors.
      - j7ake 5y ago
        Being able to be more efficient and pass down savings to low prices and higher worker wages seem like a good thing.
        the-dude 5y ago
        Until there is only Walmart and Amazon left.
- minikites 5y ago
  >It’s just that people are realizing that there are easier minimum wage jobs than working in a kitchen Exactly, so restaurant owners should raise wages to compensate. There's not a shortage of workers, there's a shortage of owners willing to pay the current market wage.
  - FredPret 5y ago
    I agree. It’s a simple matter of supply and demand. Want more supply? Raise the price!
- skeeter2020 5y ago
  >> people are realizing that there are easier minimum wage jobs than working in a kitchen A lot of jurisdictions showed them this when they paid almost the the same as their FT take-home pay during Covid. I don't think they've left for something better; I think they're mostly not doing anything.
- alexott 5y ago
  Same in Germany
- BiteCode_dev 5y ago
  In france being a waiters is way harder than most others jobs. At most jobs you get to work 35 hours on regular days, with a lot of hollidays and a fixed schedule. Restaurants have a lot of legal exceptions because you need people to work on sunday, vacations, weird schedules, etc. So compared to other situations in the same country, it's not a good deal.
  - at-fates-hands 5y ago
    >> Restaurants have a lot of legal exceptions because you need people to work on sunday, vacations, weird schedules, etc. Actually a lot of industries have this problem. I was a smartphone tech. I repaired phones. You know when a majority of our business was done? On weekends and holidays. Whenever my GF had a national holiday, I had to work because it meant the people who put off fixing their phones will take that day and come it for a repair because it was way more convenient than during or after their working hours. I also had to work until 7pm every night for the same reason. My owner was banking on people coming home from work and stopping, so we stayed open an extra two hours. Some days I had five people in my office. Other days? Maybe one or two. But those two hours generated a lot more revenue than you probably think over the course of a month.
tarr11 5y ago
A lot of this article is about fast food workers, who don’t get tips. The answer is automation, logistics and supply chain improvements so you can service more customers with fewer, but more specialized employees who can be paid a living wage.
- jhou2 5y ago
  heh or go the other way with more immigration of cheap labor who are willing to absorb the abuse.
  - edgyquant 5y ago
    I’m in favor of immigration but I don’t think we should incentivize anyone absorbing they abuse.
  - Ajay-p 5y ago
    That has not worked out so well in other industries. Immigrant labor is badly abused, perhaps you said this in jest, but I do not think it is something to be taken so lightly. This article from the New Yorker may change your thinking: https://www.newyorker.com/magazine/2017/05/08/exploitation-and-abuse-at-the-chicken-plant https://www.newyorker.com/magazine/2017/05/08/exploitation-a...
- tenebrisalietum 5y ago
  So is it better to give 10 people some wage, but not a living wage, or 5 people a living wage and have 5 people with no wage?
  - AnIdiotOnTheNet 5y ago
    Tell me: why do we use backhoes to dig ditches instead of armies of workers with spoons?
    - tenebrisalietum 5y ago
      Well, if we have a morality of "work is virtue" then obviously it's best to spread that virtue to the most. If we want to spread wealth to the most to avoid social upheaval in the context of that morality, then more people employed would be better over fewer with a living wage. Of course UBI or other safety net would be a good way to avoid social upheaval as well.
colinmhayes 5y ago
Restaurant work sucks, it's not tipping's fault. I don't work nearly as hard as a software developer compared to when I was a waiter or cook. Software development is lower stress most of the time too.
- wyager 5y ago
  For me, job stress has little to do with being extremely busy in the moment and a lot to do with thinking about far-flung high-leverage consequences of mistakes (will this system crash in the middle of the night 2 weeks from now, costing tons of money and causing someone to call me in a panic?). With something like being a cook, failure feedback is usually pretty immediate, which IMO is nice for stress levels.
  - rocgf 5y ago
    Have you ever worked in a kitchen or are you just assuming? I personally haven't worked in a restaurant, but I see how the staff and chefs are always running around, doing 20 things at once. Stimulants use like cocaine and amphetamine is endemic in the industry as well, probably for that reason. As a restaurant worker, the pay is usually terrible as well. So while some super rich corporation won't lose millions off of your mistakes, you can lose your job and be forced to live off of your inexistent savings. That sounds very stressful to me. Your assessment for what constitutes stress seems to be, at best, highly subjective.
    - cle 5y ago
      I cooked in professional kitchens for years before becoming a software engineer. For me, the cumulative stress of the software industry is a lot higher. I can never quite "turn off" and in the long-run it's a lot harder for me to control my psychological stress, than when I was working in a kitchen. (And of course these are highly subjective, I'd expect nothing less from a psychological phenomenon. Anecdotes will likely be all over the place.)
    - rusk 5y ago
      I worked in very busy bars for a number of years. It’s hard sometimes back breaking work but it was certainly much more “fun”. Up until the point where you end up working for penny pinching gradgrinds who see your “fun” as an externality to be eliminated. At least as a software developer I’ve a good bit more leverage around matters of occupational convenience.
pphysch 5y ago
I don't think higher wages alone will do it. Profit sharing, on the other hand...
- flir 5y ago
  I wonder if a McDonalds has ever been run as a co-op. I wonder what McDonalds would do if you tried it.
- abawany 5y ago
  Blackstar Co-Op in Austin (https://blackstar.coop/ https://blackstar.coop/) is a great example imo. The service is great and the missing begging bowl is a great relief. Hopefully there are more examples.
maerF0x0 5y ago
or automate 99% of the business and free these poor souls from a mundane existence. Also, I think we should support them w/ safety net (see basically andrew yang's platform). I don't see anyone screaming about ditch digging jobs or dishwashers saying we should "save those jobs!" . Backhoes and automatic dishwashers have freed people from meaningless work. We should do the same for everything we can. There's a stereotype of struggling artists working at fast food/coffee shops, imagine how much better human life could be if we freed them to do their real work (the arts).
- mrob 5y ago
  There is already an enormous oversupply of art. The struggling artists' real product is something rarer: authenticity. If they did not struggle then they would not be able to produce it.
  - verall 5y ago
    This is an interesting take, but most of my favorite artists grew up comfortably middle class, because it gave them the time and space to develop their art, compared to people who had to get jobs as teens or watch their little siblings.
  - hackyhacky 5y ago
    Is suffering the only source of authenticity?
  - shoemakersteve 5y ago
    Pretty weird take. I guess every classical composer didn't make anything authentic because they were all nobles from rich families.
    - mrob 5y ago
      How is that related? I only claimed that struggling artists were manufacturing authenticity. I made no claims about other sources.
  - 5y ago
okprod 5y ago
I think the Shake Shack founder tried the no tipping-- increase prices route at his fancy restaurant and ended up reversing the decision.
- megameter 5y ago
  Ending tipping needs a top-down enforcement of norms akin to pandemic response measures. The restaurants that try to go it alone confuse and sticker-shock their customers, unfortunately.
  - forz877 5y ago
    I don't see why we need to end tipping. Keep it, and raise wages. I get that it's the flavor of the week for people to rally around, but I don't see a problem. Let's let the market solve the problem. The last thing we need is even more bureaucracy and laws to police something that doesn't need policed.
    - okprod 5y ago
      I like tipping actually, though my first trip to Asia I was caught off guard by the lack of tipping, like in China and Japan.
imbnwa 5y ago
I worked in hospitality for 10 years before formally getting into software engineering. The customers can suck, yes, but more often than not your boss has the same sociopathic qualities of that mythical asshole geninus founder except you're not working at a startup, you have no equity, you're being paid bare bones, and the boss is not a fucking genius.
refurb 5y ago
The folks I’ve talked who were wait staff preferred tips. They made $10/hr ($80 per shift) but could pocket $200 in tips on a good night. Doubling their rate to $20/hr would be a pay cut.
- sokoloff 5y ago
  I’m quite sure that less than 100% of cash tips are reported as income to the IRS and state revenue departments.
  - bluGill 5y ago
    There are a few exceptions who report it all I'm sure. However a good waiter/waitress can make as much as a good software engineer working less hours. Good is key though, most don't have the personality to rake in the tips. It is a pleasure getting good service where the 25% tip is deserved, it is painful having to give a 10% tip for bad service.
JMTQp8lwXL 5y ago
The pandemic has had me appreciating home cooking more. I still eat out occasionally, but for health reasons, I prefer the home cooked meal. Pandemic lasted long enough to shift my preferences long-term.
- edmundhuber 5y ago
  Often tastes better too, tbh. Lots of restaurants overuse salt to make up for lack of flavor.
dud7d7ueu 5y ago
People become servers because of the tips not in spite of them 9/10 times. Of the servers I've known every single one chose serving because it beat the hell out of the other available low-requirement options they had. Complaining about tipping is easily one of the most counter productive forms of woke culture I encounter on a regular basis.
- Invictus0 5y ago
  Suppose I don't care about the workers and I just want the actual price I'm going to pay printed on the menu, with no additional charges and fees at the end? Does that make me "woke"?
  - bluGill 5y ago
    I care about service. It is a pleasure being able to reward good service.
    - Invictus0 5y ago
      Nothing about what I suggested would prevent you from doing that.
    - Dylan16807 5y ago
      Very few people do that. Tip amount barely changes based on how good the service is. Most people that tip well are basically always going to tip well, which does not reward good service.
asdfasgasdgasdg 5y ago
Seems like an oversimplification to me. If the owners could simply raise prices by 20% and suffer no economic consequences, I have little doubt they would. Thus, I can only surmise that it is not as simple as that.
- handmodel 5y ago
  The article says about 5% of workers quit each month. If you raise pay by 20% - then maybe this goes down to 3%? I'm not sure - it obviously doesn't eliminate the problem entirely and either creates the problem of having to raise prices or get by with less staff. I think people on HN may be forgetting the restaurant industry does not have the same margins as tech ... and close to no one working these jobs (on the employee side) is ever hoping to stay there for decades.
- jlarocco 5y ago
  Then maybe restaurants aren't a viable business? I know it sounds crazy because we've had them for so long, but maybe it's not sustainable to have so many of them? In any case, this seems like a great area to let the market figure it out. If restaurants go out of business the owners and employees will find something else to do.
  - Andrex 5y ago
    > In any case, this seems like a great area to let the market figure it out. If restaurants go out of business the owners and employees will find something else to do. I'm not sure more corporate concentration would be a better situation.
    - jlarocco 5y ago
      I don't think my comment implies more corporate concentration. And even if it does, why should restaurants be held to a higher standard than other sectors? It's fine for Google and Facebook to buy up everything, but restaurants can't consolidate?
    - huehehue 5y ago
deleted 5y ago
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GongOfFour 5y ago
It's going to need to be more than 20%. There are no shortage of jobs where servers make enough to live because they make unreported cash tips.
dionidium 5y ago
Even if this is true, "the industry" is made up of individual actors who stand to lose a lot in the short term by moving first.
wusher 5y ago
I think realistically it would come down to an increase of 30%. Most of the time, only a small amount of tips show up in taxes and now that it's part of the pay, the employer will also have to pay taxes on the increase.
rubyist5eva 5y ago
Food is expensive enough as it is, if restaurant prices went up 20% overnight I would never go to one again. Tipping is irrelevant for fast food.
- distances 5y ago
  How expensive are they over there then? I feel restaurants aren't best for everyday meals, but rather once a week/month social events with friends/SO. That makes price definitely less important for me. Also, I consequently completely avoid chain restaurants. I haven't entered McDonald's since 2008 or so.
kop316 5y ago
That may be the case for some....but that is not the case for all. For one ancedote, my father in-law runs a restaurant with my aunt in-law (his sister). They are the only workers, and split the profits evenly. They are in the midwest (low taxes), and own the restaurant's property/building. They were able to completely shut down during COVID and restart back up, and have survived several economic downturns. They are still worried about the long term health of the business because of enternal cost increases (food, supplies, etc.), and are honestly thinking of just shutting down their restaurant and retiring rather than raising prices. They honestly think that if they raise their prices to get the same profit (NOT increase, just to keep it the same!) they have been getting, no one will come anymore because the cost is too much. They by comparision to a lot of other business are lucky! They don't have to worry about rent at all, and they only have themselves to pay. Both also have other external sources of income (their spouses works), and have absolutely zero debt. I can't imagine how it is for business that have rent (and possibly rent backpay) and employees they need to pay. I went to Northern VA (Reston) before and after COVID....so see almost all of the local restaurants and a great local grocery store wiped out because the property management were so unforgiving for rent.
- Buttons840 5y ago
  I'm sure things are more complicated than you describe, but it seems like they fear increasing prices will lead to closing, and to avoid this they're... just going to close?
  - kop316 5y ago
    Sorry, should have been more specific! More correctly, they are debating if it's just time to retire now and be grandparents full time rather than risk losing a lot money in the restaurant due to increased prices, then being forced to retire. I assume "closing down the restaurant and retiring" means they will sell the restaurant (or at least the property), but I am not sure to be honest?
    - ac29 5y ago
      Would raising prices 5 or 10% be so catastrophic to revenue that they couldnt even give it a few weeks? Or are they looking at a 50%+ price increase? If they want to retire anyways, then good for them. But a lot of businesses have had to raise prices this year, including grocers, which are arguably restaurants only competition. I think folks would understand.
gnicholas 5y ago
> Stop the tipping guilt trip placed on the public, raise your prices 20%, and pay your employees a livable wage. FYI, one of the reasons restaurants don't do this is the tax impacts. When someone tips 20%, there is no sales tax assessed on the tip — the full 20% goes to the worker. If you increase prices by 20%, that is subject to a sales tax (roughly 10% where I live), which amounts to a 1%-2% increase in the total price. On top of that, moving tips to wages results in more income and payroll taxes being taken out (most workers do not fully report all of their tips, which saves them both income and payroll taxes). It might not seem like a lot — just a couple percent here and there — but restaurants have pretty thin margins.
- _delirium 5y ago
  > most workers do not fully report all of their tips, which saves them both income and payroll taxes I wonder what percentage of tips are still cash tips, which is the only case where you can get away with that. I imagine the percentage of tips that are on a credit card (or even app like Doordash/Seamless) vs. cash has been increasing over time, but I can't find solid numbers.
  - nickff 5y ago
    Most credit and debit card tips are paid out to servers with cash from the register at the end of the day. The amount of the tips is recorded, but the recipients are not, and taxes are not assessed against the tips. Technically, servers are supposed to declare the cash they receive as income, but it is accepted practice not to do so.
    - deleted 5y ago
      [deleted]
    - greedo 5y ago
      I'm not sure about that. It's been thirty years since I waited tables, but our restaurant required us to turn in tips (they were pooled and distributed to everyone who worked that shift). The withheld taxes on them, and if we skimmed tips and didn't turn them into the pool at the end of our shift, we'd get ratted out by coworkers and fired.
cmckn 5y ago
That's one issue, sure. I think another is the response by the service industry to the requirements of the ACA. Everyone I know that works in a restaurant had their hours capped just below the line at which they'd have to be provided health insurance. Now they have multiple jobs. Juggling more than one job is a PITA, but even more so when your schedules are constantly shifting. These folks need full-time work with a predictable schedule, so they can do things like go to the dentist or take their kid to the zoo.
partiallypro 5y ago
This is happening in more than just the United States... so your theory doesn't hold up. Also, at least near me, people living on tips make REALLY good money. Some make 6 figures. I've talked to some bar workers specifically that are totally against the idea of getting rid of tipping and the wage structure. They make really good.
jbluepolarbear 5y ago
The pay generally isn’t the issue; especially, tipped positions. It’s the work conditions, treatment by management and customers, the inconsistency in hours, and no benefits. We’re seeing here in Portland that people still don’t want return to restaurants at $15/hr. Restaurants suck to work at.
- pizza234 5y ago
  At least in Europe, paying the salary off the book in large part, is very common.
  - isbvhodnvemrwvn 5y ago
    And the hours are often longer off the books, since things like cleanup are sometimes not counted as worked hours.
    - mjevans 5y ago
      I think restaurants pull that crap in the US too, by not scheduling enough on the clock hours for cleanup after the store closes. It's why you'll see places lock the doors even 30 min or more before the listed closing time.
      - leesalminen 5y ago
        When I was young I worked at Dunkin’ Donuts. You’re right that we had 30 mins of cleaning after the store closed. We were paid for it and were never asked to clock out and work for free. But, sometimes on Friday nights we’d lock the doors 30 minutes early and clean just so we could get to enjoy our weekends 30 minutes sooner. That was pretty rare unless a manager happened to be there that evening and also wanted to go enjoy their weekend. I honestly can’t think of anyone I worked with there that would’ve clocked out and worked for free. I think people would’ve quit quickly. There were like 5 other Dunkin franchisees in the county and they’d all hire you on the spot if you’d done the job before.
stevejb 5y ago
Guilt trip? I have never felt this ever. I pay a tip proportional to the service. 10% bad, 15% average, 20-25% for very good. As an American living in Australia, I really do miss tipping. I think that on average the restaurant service here is a lot lower. At most restaurants at the medium level (e.g. $25 hamburgers) you pay in advance, and then a waiter will bring the food to you when its ready. Do you need more water? Get it yourself... Ketchup, you have to ask but it won't be offered. The waiters don't care because they are making good money anyway. The only place you get American style service is at the very high end places.
- jclulow 5y ago
  As an Australian living in America, the expectation that there will be a person to refill your water cup is pretty uncomfortable. The need to tip is a ridiculous abdication of the responsibility for labour laws to ensure staff a living wage. If you don't like the service at a restaurant, don't go! There are other restaurants that will compete for your custom. If no restaurant is sufficiently servile for your tastes, then your expectations are likely out of step with local culture and how it treats people. Individual service persons should not be held hostage to your interpretation of their service for their wage. If they're routinely underperforming they'll be sacked.
  - yesenadam 5y ago
    Thank you, that's wonderful writing.
  - CTDOCodebases 5y ago
    Adding to this what tipping also does is pit the server against the kitchen and sometimes the house itself in establishments that don’t share tips with the kitchen. Tipping can still take place. It just doesn’t need to be obligatory. It’s the difference between a culture of servitude vs a culture of service.
- ipaddr 5y ago
  25 dollar hamburgers? That sounds so strange.
jandrewrogers 5y ago
This has been tried many times, you are ignoring the reasons it did not work. The employees hate it because they make less money, forcing the restaurant to go back to tipping. It was effectively a pay cut for employees. It is not wage/revenue neutral because it changes customer behavior. Generally speaking, Americans are more generous when the money goes to directly to a service person than to a faceless business that sets itself up as a middleman in that relationship.
- tolbish 5y ago
  How much money did they make with raised wages and no tips? Was the wage still not comparable to other jobs?
  - jandrewrogers 5y ago
    I have several good friends that work in this business in Seattle, where several restauranteurs tried the "no tipping" model. Anecdotally, in a popular quintessentially Seattle restaurant, a good front-of-house person may net around $40/hr after tips, some more and some less. I don't have a lot of sample data for the "no tipping" restaurants, but my general impression is that it was on the order of a 10% reduction in pay. One reason several of them have mentioned is that many customers are happy to regularly tip much more than 20%, and this is often correlated with the highest spending customers. Making it a non-discretionary 20% puts an artificially low cap on how much they earn from the customers that pay the most. At one time some customers would leave extra cash on the table after paying the "no tipping" bill, but no one carries cash anymore. Places that net $40/hr have enormous difficulty hiring right now. These are not poorly paying jobs but the broader lifestyle is pretty terrible even at good restaurants, made even more terrible because of the employee shortage. One overlooked issue is that many restaurant workers in the big cities are originally from "flyover country". When the restaurants closed during COVID, a large number went back home. I was talking to a waitress in the middle-of-nowhere Iowa a few months ago and she had just moved back after several years working in New York City restaurants.
    - tolbish 5y ago
mdavis6890 5y ago
What we are observing is the Demand Curve shifting left (people less interested in eating out) and the Supply Curve shifting down (the people willing to work in restaurants for any given wage is going down). Remember that supply and demand curves cover all wages/prices and quantities, they are not specific to a certain price/wage or quantity. This is observed as a shortage - more customers willing to buy a restaurant meal than the restaurants are willing/able to supply at current prices. This must equalize to a new equilibrium with higher prices and fewer restaurants. . I've over-simplified a lot, but it's pretty much right out of an Econ 101 textbook. Some of this might be transient - for example the demand curve may shift right again after some time and with COVID well in the past. The supply curve might shift back up if, for example, government wage supports are reduced.
- tshaddox 5y ago
  Is it really a shortage? If the preferences of potential restaurant customers simply changes such that they're no longer willing to pay enough for a restaurant meal for the restaurant to stay financially solvent, that's not a shortage. It's only a shortage if something is preventing the market price from changing (in this case, the price of a restaurant meal increasing) or preventing restaurants and customers who are willing to transact from being able to do so. Is that the case here?
  - pixl97 5y ago
    does it matter if it's a technical shortage or just and observed one? The only thing preventing restaurants from changing their prices is the 'penguin on an iceberg' issue. You may be correct in raising your prices, but if other restaurants are willing to lose money longer before they raise their prices your business may suffer/fail because of it before the rest of the market changes their prices/wages.
    - tshaddox 5y ago
      I'm no expert in how economists use the term, but I suppose it could certainly be called a shortage if there is some systemic reason why restaurants can't (or at least think they can't) raise prices in the short term. Personally I don't find that likely, at least based in my region where restaurants have indeed raised prices and many seem to be thriving (although many others failed in 2020).
nightfly 5y ago
This just doesn't always work, if you lose more than 20% of your customer base when you raise your prices 20% you aren't doing yourself a favor. Anecdotally I've stopped eating at restaurants/food carts that I absolutely loved when they've raised prices about that much --- You aren't gonna get all restaurants onboard with this at once unless you outlaw tipping, and I don't see that happening.
tashoecraft 5y ago
This would have to be put in place at the government level, otherwise it won’t work. A restaurant by me tried it and struggled to keep waitstaff because they can make so much elsewhere..in untaxed cash. If they doubled their prices no one would come
shados 5y ago
Thats more a solution for the customer. That comes up a lot, and times and again its pointed out that the employees hate the idea (likely because of survivor bias, where those who are making it in the current system would be worse off in a different one). Long term it likely would help, but short term it would make it harder, not easier, to get employees. In no small part because so much of the tip wages are under the table.
- pope_meat 5y ago
  Some tips are under the table. You'd be surprised how well it's tracked in most places though. Tax man tends to get his.
trophycase 5y ago
Kind of disagree. I know waitresses in high-end casual sit down restaurants making $30-50/hr with a large fraction of that going untaxed.
tinus_hn 5y ago
Unless someone throws a hissy fit and government shuts down business again, for months.

namdnay 5y ago

Honestly, as necessary as that is, it’s not a magic solution. People are quitting the restaurant industry in France too, despite having none of the tip silliness. It’s just that people are realizing that there are easier minimum wage jobs than working in a kitchen

ashtonkem 5y ago
Perhaps the industry is not sustainable then.
- AnIdiotOnTheNet 5y ago
  I agree. It seems that most people's "solutions" to this "problem" are various ways to make people's live more miserable and keep them desperate enough to work shit jobs for low pay. I guess a lot of people are just fine with having a slave class as long as it means they don't have to be inconvenienced in any way. If this industry literally cannot afford to pay people a living wage, if no one wants to work for them and they can't remain profitable by making working conditions better, then they just shouldn't even exist.
  - wonderwonder 5y ago
    Most eye opening part of the pandemic was the fact that in the US the majority of people dubbed as essential and forced to work were also the people paid the least. Grocery workers standing there with 2 masks on making minimum wage while the rest of us waltz in take what we need and return to the relative safety of our remote work. Then making fast food workers essential instead of paying them unemployment was just taking things to another level of pettiness.
- rusk 5y ago
  Maybe a cut in VAT would help? Although that probably doesn’t help in the states …
  - Hjfrf 5y ago
    If you're taking about the UK, the obvious starting point would be ending subsidies for buy-to-let. In a pandemic with vast spending deficits, the government is giving out mortgage holidays, 95% mortgage scheme, stamp duty holiday etc.
    - bencollier49 5y ago
      I think some of this might be down to a lot of pensions being invested in property. It feels a little bit like the dam is bursting in several places at once; I'm not hopeful.
  - ashtonkem 5y ago
    The history of tax cuts in order to help out workers is .. not great.
- darth_avocado 5y ago
  It used to be. When ordering food in a restaurant was a special thing for special occasions. It was expensive to eat out and the workers were compensated for it. Then we got to a place where food was supposed fast, cheap and accessible to everyone at any time. And suddenly you couldn't charge a lot for your food and worker wages stagnated. Sure more people work in the restaurant industry than they ever did before, but that's what happens. Quantity over quality in almost any service industry always means abundance of the service at the expense of the workers. Take a look at the rideshare business.
  - danaris 5y ago
    I mean...to what extent does this correlate with the nationwide stagnation of real wages? If your average American working a full-time job can't afford to eat out at high enough prices to keep restaurants afloat while paying decent wages, that sounds like a systemic problem—and we already know that one of those exists here.
    - namdnay 5y ago
      I guess it depends how often you expect to eat out. If it’s once a month, I think most can afford more expensive restaurants
      - bluGill 5y ago
        Once you learn to cook you won't eat at anything less than the most expensive. It is really hard to enjoy a meal when you are thinking "I could have done this better myself at less cost". Chains and fast food just don't provide the quality I demand for the most part, and even the independents are hit and miss.
        SketchySeaBeast 5y ago
        In this case you're trading out your effort for the cash. I'm happy to trade my money, which I earn much more efficiently at my job than I can save by cooking, for the food so I don't have to put in effort and can enjoy my evening out with friends. I'm also more than happy to pay a couple of dollar premium to eat fast food than try to recreate it on my own while I'm running to work.
- imtringued 5y ago
  The modern service job isn't meant to be sustainable in the first place. It's entirely based around the idea of having surplus labor using it inefficiently. Any sane economist that has to solve for the constraint "everyone has to provide for themselves" aka the mythical republican "responsibility" would first start by creating enough jobs to reach full employment. When you leave everything up to responsibility you also have the duty to provide everyone with the ability to live up to their responsibility. Society as a whole doesn't benefit from exploitation or unsustainable businesses.
jcun4128 5y ago
hehe I escaped into tech, but I remember washing plates listening to podcasts listening to Changelog while riding my bike at night after getting out of the factory
yepthatsreality 5y ago
Sure but this goes beyond restaurants in my opinion. Look at these states that had mass migration of people during the pandemic. You will find the (big) sky-rocketing cost of living where those who are moving in on a whim are also not seeking jobs in the state. However all these businesses need employees to handle the new increase in customers. The employers aren’t raising their wages either, which is also not attracting people to work. When the lower classes are forced to move elsewhere (Outside the cities) then this problem will get worse. Return to office might have some reverse effect but online remote employees can be one of the biggest generators of this problem.
- conductr 5y ago
  > The employers aren’t raising their wages either They are. It takes time but they are. I work in a business that is having a hard time hiring entry level healthcare workers because Walmart and Amazon warehoueses is now paying $15-20/hr when it was only $12 pre-covid. Walmart and Amazon would only raise wages if they truly had a labor supply issue, which they do, we all do.
  - andechs 5y ago
    Walmart and Amazon raising wages allows them to exercise their huge scale to further crush their competitors. With their huge efficiencies of scale and deep cash reserves, they are better able to offer higher wages than competitors. During the pandemic, both Walmart and Amazon have seen huge growth. They can continue this growth post-pandemic by squeezing their competitors on wages, and eventually emerging with less competitors.
    - j7ake 5y ago
      Being able to be more efficient and pass down savings to low prices and higher worker wages seem like a good thing.
      - the-dude 5y ago
        Until there is only Walmart and Amazon left.
minikites 5y ago
>It’s just that people are realizing that there are easier minimum wage jobs than working in a kitchen Exactly, so restaurant owners should raise wages to compensate. There's not a shortage of workers, there's a shortage of owners willing to pay the current market wage.
- FredPret 5y ago
  I agree. It’s a simple matter of supply and demand. Want more supply? Raise the price!
skeeter2020 5y ago
>> people are realizing that there are easier minimum wage jobs than working in a kitchen A lot of jurisdictions showed them this when they paid almost the the same as their FT take-home pay during Covid. I don't think they've left for something better; I think they're mostly not doing anything.
alexott 5y ago
Same in Germany
BiteCode_dev 5y ago
In france being a waiters is way harder than most others jobs. At most jobs you get to work 35 hours on regular days, with a lot of hollidays and a fixed schedule. Restaurants have a lot of legal exceptions because you need people to work on sunday, vacations, weird schedules, etc. So compared to other situations in the same country, it's not a good deal.
- at-fates-hands 5y ago
  >> Restaurants have a lot of legal exceptions because you need people to work on sunday, vacations, weird schedules, etc. Actually a lot of industries have this problem. I was a smartphone tech. I repaired phones. You know when a majority of our business was done? On weekends and holidays. Whenever my GF had a national holiday, I had to work because it meant the people who put off fixing their phones will take that day and come it for a repair because it was way more convenient than during or after their working hours. I also had to work until 7pm every night for the same reason. My owner was banking on people coming home from work and stopping, so we stayed open an extra two hours. Some days I had five people in my office. Other days? Maybe one or two. But those two hours generated a lot more revenue than you probably think over the course of a month.

tarr11 5y ago

A lot of this article is about fast food workers, who don’t get tips. The answer is automation, logistics and supply chain improvements so you can service more customers with fewer, but more specialized employees who can be paid a living wage.

jhou2 5y ago
heh or go the other way with more immigration of cheap labor who are willing to absorb the abuse.
- edgyquant 5y ago
  I’m in favor of immigration but I don’t think we should incentivize anyone absorbing they abuse.
- Ajay-p 5y ago
  That has not worked out so well in other industries. Immigrant labor is badly abused, perhaps you said this in jest, but I do not think it is something to be taken so lightly. This article from the New Yorker may change your thinking: https://www.newyorker.com/magazine/2017/05/08/exploitation-and-abuse-at-the-chicken-plant https://www.newyorker.com/magazine/2017/05/08/exploitation-a...
tenebrisalietum 5y ago
So is it better to give 10 people some wage, but not a living wage, or 5 people a living wage and have 5 people with no wage?
- AnIdiotOnTheNet 5y ago
  Tell me: why do we use backhoes to dig ditches instead of armies of workers with spoons?
  - tenebrisalietum 5y ago
    Well, if we have a morality of "work is virtue" then obviously it's best to spread that virtue to the most. If we want to spread wealth to the most to avoid social upheaval in the context of that morality, then more people employed would be better over fewer with a living wage. Of course UBI or other safety net would be a good way to avoid social upheaval as well.

colinmhayes 5y ago

Restaurant work sucks, it's not tipping's fault. I don't work nearly as hard as a software developer compared to when I was a waiter or cook. Software development is lower stress most of the time too.

wyager 5y ago
For me, job stress has little to do with being extremely busy in the moment and a lot to do with thinking about far-flung high-leverage consequences of mistakes (will this system crash in the middle of the night 2 weeks from now, costing tons of money and causing someone to call me in a panic?). With something like being a cook, failure feedback is usually pretty immediate, which IMO is nice for stress levels.
- rocgf 5y ago
  Have you ever worked in a kitchen or are you just assuming? I personally haven't worked in a restaurant, but I see how the staff and chefs are always running around, doing 20 things at once. Stimulants use like cocaine and amphetamine is endemic in the industry as well, probably for that reason. As a restaurant worker, the pay is usually terrible as well. So while some super rich corporation won't lose millions off of your mistakes, you can lose your job and be forced to live off of your inexistent savings. That sounds very stressful to me. Your assessment for what constitutes stress seems to be, at best, highly subjective.
  - cle 5y ago
    I cooked in professional kitchens for years before becoming a software engineer. For me, the cumulative stress of the software industry is a lot higher. I can never quite "turn off" and in the long-run it's a lot harder for me to control my psychological stress, than when I was working in a kitchen. (And of course these are highly subjective, I'd expect nothing less from a psychological phenomenon. Anecdotes will likely be all over the place.)
  - rusk 5y ago
    I worked in very busy bars for a number of years. It’s hard sometimes back breaking work but it was certainly much more “fun”. Up until the point where you end up working for penny pinching gradgrinds who see your “fun” as an externality to be eliminated. At least as a software developer I’ve a good bit more leverage around matters of occupational convenience.

pphysch 5y ago

I don't think higher wages alone will do it. Profit sharing, on the other hand...

flir 5y ago
I wonder if a McDonalds has ever been run as a co-op. I wonder what McDonalds would do if you tried it.
abawany 5y ago
Blackstar Co-Op in Austin (https://blackstar.coop/ https://blackstar.coop/) is a great example imo. The service is great and the missing begging bowl is a great relief. Hopefully there are more examples.

maerF0x0 5y ago

or automate 99% of the business and free these poor souls from a mundane existence. Also, I think we should support them w/ safety net (see basically andrew yang's platform). I don't see anyone screaming about ditch digging jobs or dishwashers saying we should "save those jobs!" . Backhoes and automatic dishwashers have freed people from meaningless work. We should do the same for everything we can. There's a stereotype of struggling artists working at fast food/coffee shops, imagine how much better human life could be if we freed them to do their real work (the arts).

mrob 5y ago
There is already an enormous oversupply of art. The struggling artists' real product is something rarer: authenticity. If they did not struggle then they would not be able to produce it.
- verall 5y ago
  This is an interesting take, but most of my favorite artists grew up comfortably middle class, because it gave them the time and space to develop their art, compared to people who had to get jobs as teens or watch their little siblings.
- hackyhacky 5y ago
  Is suffering the only source of authenticity?
- shoemakersteve 5y ago
  Pretty weird take. I guess every classical composer didn't make anything authentic because they were all nobles from rich families.
  - mrob 5y ago
    How is that related? I only claimed that struggling artists were manufacturing authenticity. I made no claims about other sources.
- 5y ago

okprod 5y ago

I think the Shake Shack founder tried the no tipping-- increase prices route at his fancy restaurant and ended up reversing the decision.

megameter 5y ago
Ending tipping needs a top-down enforcement of norms akin to pandemic response measures. The restaurants that try to go it alone confuse and sticker-shock their customers, unfortunately.
- forz877 5y ago
  I don't see why we need to end tipping. Keep it, and raise wages. I get that it's the flavor of the week for people to rally around, but I don't see a problem. Let's let the market solve the problem. The last thing we need is even more bureaucracy and laws to police something that doesn't need policed.
  - okprod 5y ago
    I like tipping actually, though my first trip to Asia I was caught off guard by the lack of tipping, like in China and Japan.

imbnwa 5y ago

I worked in hospitality for 10 years before formally getting into software engineering. The customers can suck, yes, but more often than not your boss has the same sociopathic qualities of that mythical asshole geninus founder except you're not working at a startup, you have no equity, you're being paid bare bones, and the boss is not a fucking genius.

refurb 5y ago

The folks I’ve talked who were wait staff preferred tips. They made $10/hr ($80 per shift) but could pocket $200 in tips on a good night. Doubling their rate to $20/hr would be a pay cut.

sokoloff 5y ago
I’m quite sure that less than 100% of cash tips are reported as income to the IRS and state revenue departments.
- bluGill 5y ago
  There are a few exceptions who report it all I'm sure. However a good waiter/waitress can make as much as a good software engineer working less hours. Good is key though, most don't have the personality to rake in the tips. It is a pleasure getting good service where the 25% tip is deserved, it is painful having to give a 10% tip for bad service.

JMTQp8lwXL 5y ago

The pandemic has had me appreciating home cooking more. I still eat out occasionally, but for health reasons, I prefer the home cooked meal. Pandemic lasted long enough to shift my preferences long-term.

edmundhuber 5y ago
Often tastes better too, tbh. Lots of restaurants overuse salt to make up for lack of flavor.

dud7d7ueu 5y ago

People become servers because of the tips not in spite of them 9/10 times. Of the servers I've known every single one chose serving because it beat the hell out of the other available low-requirement options they had. Complaining about tipping is easily one of the most counter productive forms of woke culture I encounter on a regular basis.

Invictus0 5y ago
Suppose I don't care about the workers and I just want the actual price I'm going to pay printed on the menu, with no additional charges and fees at the end? Does that make me "woke"?
- bluGill 5y ago
  I care about service. It is a pleasure being able to reward good service.
  - Invictus0 5y ago
    Nothing about what I suggested would prevent you from doing that.
  - Dylan16807 5y ago
    Very few people do that. Tip amount barely changes based on how good the service is. Most people that tip well are basically always going to tip well, which does not reward good service.

asdfasgasdgasdg 5y ago

Seems like an oversimplification to me. If the owners could simply raise prices by 20% and suffer no economic consequences, I have little doubt they would. Thus, I can only surmise that it is not as simple as that.

handmodel 5y ago
The article says about 5% of workers quit each month. If you raise pay by 20% - then maybe this goes down to 3%? I'm not sure - it obviously doesn't eliminate the problem entirely and either creates the problem of having to raise prices or get by with less staff. I think people on HN may be forgetting the restaurant industry does not have the same margins as tech ... and close to no one working these jobs (on the employee side) is ever hoping to stay there for decades.
jlarocco 5y ago
Then maybe restaurants aren't a viable business? I know it sounds crazy because we've had them for so long, but maybe it's not sustainable to have so many of them? In any case, this seems like a great area to let the market figure it out. If restaurants go out of business the owners and employees will find something else to do.
- Andrex 5y ago
  > In any case, this seems like a great area to let the market figure it out. If restaurants go out of business the owners and employees will find something else to do. I'm not sure more corporate concentration would be a better situation.
  - jlarocco 5y ago
    I don't think my comment implies more corporate concentration. And even if it does, why should restaurants be held to a higher standard than other sectors? It's fine for Google and Facebook to buy up everything, but restaurants can't consolidate?
  - huehehue 5y ago

deleted 5y ago

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GongOfFour 5y ago

It's going to need to be more than 20%. There are no shortage of jobs where servers make enough to live because they make unreported cash tips.

dionidium 5y ago

Even if this is true, "the industry" is made up of individual actors who stand to lose a lot in the short term by moving first.

wusher 5y ago

I think realistically it would come down to an increase of 30%. Most of the time, only a small amount of tips show up in taxes and now that it's part of the pay, the employer will also have to pay taxes on the increase.

rubyist5eva 5y ago

Food is expensive enough as it is, if restaurant prices went up 20% overnight I would never go to one again. Tipping is irrelevant for fast food.

distances 5y ago
How expensive are they over there then? I feel restaurants aren't best for everyday meals, but rather once a week/month social events with friends/SO. That makes price definitely less important for me. Also, I consequently completely avoid chain restaurants. I haven't entered McDonald's since 2008 or so.

kop316 5y ago

That may be the case for some....but that is not the case for all. For one ancedote, my father in-law runs a restaurant with my aunt in-law (his sister). They are the only workers, and split the profits evenly. They are in the midwest (low taxes), and own the restaurant's property/building. They were able to completely shut down during COVID and restart back up, and have survived several economic downturns. They are still worried about the long term health of the business because of enternal cost increases (food, supplies, etc.), and are honestly thinking of just shutting down their restaurant and retiring rather than raising prices. They honestly think that if they raise their prices to get the same profit (NOT increase, just to keep it the same!) they have been getting, no one will come anymore because the cost is too much. They by comparision to a lot of other business are lucky! They don't have to worry about rent at all, and they only have themselves to pay. Both also have other external sources of income (their spouses works), and have absolutely zero debt. I can't imagine how it is for business that have rent (and possibly rent backpay) and employees they need to pay. I went to Northern VA (Reston) before and after COVID....so see almost all of the local restaurants and a great local grocery store wiped out because the property management were so unforgiving for rent.

Buttons840 5y ago
I'm sure things are more complicated than you describe, but it seems like they fear increasing prices will lead to closing, and to avoid this they're... just going to close?
- kop316 5y ago
  Sorry, should have been more specific! More correctly, they are debating if it's just time to retire now and be grandparents full time rather than risk losing a lot money in the restaurant due to increased prices, then being forced to retire. I assume "closing down the restaurant and retiring" means they will sell the restaurant (or at least the property), but I am not sure to be honest?
  - ac29 5y ago
    Would raising prices 5 or 10% be so catastrophic to revenue that they couldnt even give it a few weeks? Or are they looking at a 50%+ price increase? If they want to retire anyways, then good for them. But a lot of businesses have had to raise prices this year, including grocers, which are arguably restaurants only competition. I think folks would understand.

gnicholas 5y ago

> Stop the tipping guilt trip placed on the public, raise your prices 20%, and pay your employees a livable wage. FYI, one of the reasons restaurants don't do this is the tax impacts. When someone tips 20%, there is no sales tax assessed on the tip — the full 20% goes to the worker. If you increase prices by 20%, that is subject to a sales tax (roughly 10% where I live), which amounts to a 1%-2% increase in the total price. On top of that, moving tips to wages results in more income and payroll taxes being taken out (most workers do not fully report all of their tips, which saves them both income and payroll taxes). It might not seem like a lot — just a couple percent here and there — but restaurants have pretty thin margins.

_delirium 5y ago
> most workers do not fully report all of their tips, which saves them both income and payroll taxes I wonder what percentage of tips are still cash tips, which is the only case where you can get away with that. I imagine the percentage of tips that are on a credit card (or even app like Doordash/Seamless) vs. cash has been increasing over time, but I can't find solid numbers.
- nickff 5y ago
  Most credit and debit card tips are paid out to servers with cash from the register at the end of the day. The amount of the tips is recorded, but the recipients are not, and taxes are not assessed against the tips. Technically, servers are supposed to declare the cash they receive as income, but it is accepted practice not to do so.
  - deleted 5y ago
    [deleted]
  - greedo 5y ago
    I'm not sure about that. It's been thirty years since I waited tables, but our restaurant required us to turn in tips (they were pooled and distributed to everyone who worked that shift). The withheld taxes on them, and if we skimmed tips and didn't turn them into the pool at the end of our shift, we'd get ratted out by coworkers and fired.

cmckn 5y ago

That's one issue, sure. I think another is the response by the service industry to the requirements of the ACA. Everyone I know that works in a restaurant had their hours capped just below the line at which they'd have to be provided health insurance. Now they have multiple jobs. Juggling more than one job is a PITA, but even more so when your schedules are constantly shifting. These folks need full-time work with a predictable schedule, so they can do things like go to the dentist or take their kid to the zoo.

partiallypro 5y ago

This is happening in more than just the United States... so your theory doesn't hold up. Also, at least near me, people living on tips make REALLY good money. Some make 6 figures. I've talked to some bar workers specifically that are totally against the idea of getting rid of tipping and the wage structure. They make really good.

jbluepolarbear 5y ago

The pay generally isn’t the issue; especially, tipped positions. It’s the work conditions, treatment by management and customers, the inconsistency in hours, and no benefits. We’re seeing here in Portland that people still don’t want return to restaurants at $15/hr. Restaurants suck to work at.

pizza234 5y ago
At least in Europe, paying the salary off the book in large part, is very common.
- isbvhodnvemrwvn 5y ago
  And the hours are often longer off the books, since things like cleanup are sometimes not counted as worked hours.
  - mjevans 5y ago
    I think restaurants pull that crap in the US too, by not scheduling enough on the clock hours for cleanup after the store closes. It's why you'll see places lock the doors even 30 min or more before the listed closing time.
    - leesalminen 5y ago
      When I was young I worked at Dunkin’ Donuts. You’re right that we had 30 mins of cleaning after the store closed. We were paid for it and were never asked to clock out and work for free. But, sometimes on Friday nights we’d lock the doors 30 minutes early and clean just so we could get to enjoy our weekends 30 minutes sooner. That was pretty rare unless a manager happened to be there that evening and also wanted to go enjoy their weekend. I honestly can’t think of anyone I worked with there that would’ve clocked out and worked for free. I think people would’ve quit quickly. There were like 5 other Dunkin franchisees in the county and they’d all hire you on the spot if you’d done the job before.

stevejb 5y ago

Guilt trip? I have never felt this ever. I pay a tip proportional to the service. 10% bad, 15% average, 20-25% for very good. As an American living in Australia, I really do miss tipping. I think that on average the restaurant service here is a lot lower. At most restaurants at the medium level (e.g. $25 hamburgers) you pay in advance, and then a waiter will bring the food to you when its ready. Do you need more water? Get it yourself... Ketchup, you have to ask but it won't be offered. The waiters don't care because they are making good money anyway. The only place you get American style service is at the very high end places.

jclulow 5y ago
As an Australian living in America, the expectation that there will be a person to refill your water cup is pretty uncomfortable. The need to tip is a ridiculous abdication of the responsibility for labour laws to ensure staff a living wage. If you don't like the service at a restaurant, don't go! There are other restaurants that will compete for your custom. If no restaurant is sufficiently servile for your tastes, then your expectations are likely out of step with local culture and how it treats people. Individual service persons should not be held hostage to your interpretation of their service for their wage. If they're routinely underperforming they'll be sacked.
- yesenadam 5y ago
  Thank you, that's wonderful writing.
- CTDOCodebases 5y ago
  Adding to this what tipping also does is pit the server against the kitchen and sometimes the house itself in establishments that don’t share tips with the kitchen. Tipping can still take place. It just doesn’t need to be obligatory. It’s the difference between a culture of servitude vs a culture of service.
ipaddr 5y ago
25 dollar hamburgers? That sounds so strange.

jandrewrogers 5y ago

This has been tried many times, you are ignoring the reasons it did not work. The employees hate it because they make less money, forcing the restaurant to go back to tipping. It was effectively a pay cut for employees. It is not wage/revenue neutral because it changes customer behavior. Generally speaking, Americans are more generous when the money goes to directly to a service person than to a faceless business that sets itself up as a middleman in that relationship.

tolbish 5y ago
How much money did they make with raised wages and no tips? Was the wage still not comparable to other jobs?
- jandrewrogers 5y ago
  I have several good friends that work in this business in Seattle, where several restauranteurs tried the "no tipping" model. Anecdotally, in a popular quintessentially Seattle restaurant, a good front-of-house person may net around $40/hr after tips, some more and some less. I don't have a lot of sample data for the "no tipping" restaurants, but my general impression is that it was on the order of a 10% reduction in pay. One reason several of them have mentioned is that many customers are happy to regularly tip much more than 20%, and this is often correlated with the highest spending customers. Making it a non-discretionary 20% puts an artificially low cap on how much they earn from the customers that pay the most. At one time some customers would leave extra cash on the table after paying the "no tipping" bill, but no one carries cash anymore. Places that net $40/hr have enormous difficulty hiring right now. These are not poorly paying jobs but the broader lifestyle is pretty terrible even at good restaurants, made even more terrible because of the employee shortage. One overlooked issue is that many restaurant workers in the big cities are originally from "flyover country". When the restaurants closed during COVID, a large number went back home. I was talking to a waitress in the middle-of-nowhere Iowa a few months ago and she had just moved back after several years working in New York City restaurants.
  - tolbish 5y ago

mdavis6890 5y ago

What we are observing is the Demand Curve shifting left (people less interested in eating out) and the Supply Curve shifting down (the people willing to work in restaurants for any given wage is going down). Remember that supply and demand curves cover all wages/prices and quantities, they are not specific to a certain price/wage or quantity. This is observed as a shortage - more customers willing to buy a restaurant meal than the restaurants are willing/able to supply at current prices. This must equalize to a new equilibrium with higher prices and fewer restaurants. . I've over-simplified a lot, but it's pretty much right out of an Econ 101 textbook. Some of this might be transient - for example the demand curve may shift right again after some time and with COVID well in the past. The supply curve might shift back up if, for example, government wage supports are reduced.

tshaddox 5y ago
Is it really a shortage? If the preferences of potential restaurant customers simply changes such that they're no longer willing to pay enough for a restaurant meal for the restaurant to stay financially solvent, that's not a shortage. It's only a shortage if something is preventing the market price from changing (in this case, the price of a restaurant meal increasing) or preventing restaurants and customers who are willing to transact from being able to do so. Is that the case here?
- pixl97 5y ago
  does it matter if it's a technical shortage or just and observed one? The only thing preventing restaurants from changing their prices is the 'penguin on an iceberg' issue. You may be correct in raising your prices, but if other restaurants are willing to lose money longer before they raise their prices your business may suffer/fail because of it before the rest of the market changes their prices/wages.
  - tshaddox 5y ago
    I'm no expert in how economists use the term, but I suppose it could certainly be called a shortage if there is some systemic reason why restaurants can't (or at least think they can't) raise prices in the short term. Personally I don't find that likely, at least based in my region where restaurants have indeed raised prices and many seem to be thriving (although many others failed in 2020).

nightfly 5y ago

This just doesn't always work, if you lose more than 20% of your customer base when you raise your prices 20% you aren't doing yourself a favor. Anecdotally I've stopped eating at restaurants/food carts that I absolutely loved when they've raised prices about that much --- You aren't gonna get all restaurants onboard with this at once unless you outlaw tipping, and I don't see that happening.

tashoecraft 5y ago

This would have to be put in place at the government level, otherwise it won’t work. A restaurant by me tried it and struggled to keep waitstaff because they can make so much elsewhere..in untaxed cash. If they doubled their prices no one would come

shados 5y ago

Thats more a solution for the customer. That comes up a lot, and times and again its pointed out that the employees hate the idea (likely because of survivor bias, where those who are making it in the current system would be worse off in a different one). Long term it likely would help, but short term it would make it harder, not easier, to get employees. In no small part because so much of the tip wages are under the table.

pope_meat 5y ago
Some tips are under the table. You'd be surprised how well it's tracked in most places though. Tax man tends to get his.

trophycase 5y ago

Kind of disagree. I know waitresses in high-end casual sit down restaurants making $30-50/hr with a large fraction of that going untaxed.

tinus_hn 5y ago

Unless someone throws a hissy fit and government shuts down business again, for months.