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OK, but the wages also grew slower than necessary because the income was padded by tips, reducing pressure on the business to raise wages to retain employees.

OK, but the wages also grew slower than necessary because the income was padded by tips, reducing pressure on the business to raise wages to retain employees. When restaurant servers don't get any tips it makes steady-wage jobs like warehouses or grocery stores relatively more appealing compared to customer-facing jobs. Not a great cycle.

vkou 5y ago
> OK, but the wages also grew slower than necessary because the income was padded by tips, reducing pressure on the business to raise wages to retain employees. Tips are better for the business, because it lets them price-differentiate, and thus serve more customers. The more meals a restaurant serves, the more money it gets, regardless of how well or poorly the customers tip. Over the past 40 years, businesses had a lot more bargaining power than service workers, and have obviously optimized their operations in a way that benefits their bottom line. If you don't like these outcomes, you have a few options. 1. You can curtail business bargaining power by empowering workers. 2. You can curtail business bargaining power across the board, by raising wage and benefit floors through legislature. 3. You can curtail the rising delta between service wages and living costs, by having someone else (the middle class, the rich, corporations, Uncle Bezos, importers, ???) pay for the difference. 4. You can curtail the rising delta between service wages and living costs, by setting price ceilings on living costs through legislature. 5. You can curtail the rising delta between service wages and living costs, by bringing costs down, via creating a competing low-cost provider through legislature. ... Or you can shrug your shoulders, and just pay your 20-25% gratuity for the exact same level of service that used to earn a 10% gratuity.
- bpodgursky 5y ago
  Businesses don't have to pressure employees into taking tips rather than wages. Employees almost never pay taxes on (cash) tips... it's a feature, to most service employees. It doesn't make it good, at a system level.
  - vkou 5y ago
    Outside of restaurants mostly serving the unbanked, hardly anyone pays or tips with cash in 2022.
    - bpodgursky 5y ago
      A lot of bars and bar-adjacent restaurants outside of SF and NYC rely heavily on cash.
    - sokoloff 5y ago
      Even when I pay the check with a credit card, I will frequently tip in cash at a sit-down restaurant or bar (which I’m not going to at the moment as they aren’t much fun currently, but hope they’ll return in force this year).
    - walshemj 5y ago
      Cash is better the employer can abuse tips given via cards - and screw the employees
    - throwaway0a5e 5y ago
      People who would would rather let the person receiving the tip decide if the government deserves a cut tip cash. And as others have said, using the employer's card processing flow gives the employer opportunities to do less than great things.

vkou 5y ago

> OK, but the wages also grew slower than necessary because the income was padded by tips, reducing pressure on the business to raise wages to retain employees. Tips are better for the business, because it lets them price-differentiate, and thus serve more customers. The more meals a restaurant serves, the more money it gets, regardless of how well or poorly the customers tip. Over the past 40 years, businesses had a lot more bargaining power than service workers, and have obviously optimized their operations in a way that benefits their bottom line. If you don't like these outcomes, you have a few options. 1. You can curtail business bargaining power by empowering workers. 2. You can curtail business bargaining power across the board, by raising wage and benefit floors through legislature. 3. You can curtail the rising delta between service wages and living costs, by having someone else (the middle class, the rich, corporations, Uncle Bezos, importers, ???) pay for the difference. 4. You can curtail the rising delta between service wages and living costs, by setting price ceilings on living costs through legislature. 5. You can curtail the rising delta between service wages and living costs, by bringing costs down, via creating a competing low-cost provider through legislature. ... Or you can shrug your shoulders, and just pay your 20-25% gratuity for the exact same level of service that used to earn a 10% gratuity.

bpodgursky 5y ago
Businesses don't have to pressure employees into taking tips rather than wages. Employees almost never pay taxes on (cash) tips... it's a feature, to most service employees. It doesn't make it good, at a system level.
- vkou 5y ago
  Outside of restaurants mostly serving the unbanked, hardly anyone pays or tips with cash in 2022.
  - bpodgursky 5y ago
    A lot of bars and bar-adjacent restaurants outside of SF and NYC rely heavily on cash.
  - sokoloff 5y ago
    Even when I pay the check with a credit card, I will frequently tip in cash at a sit-down restaurant or bar (which I’m not going to at the moment as they aren’t much fun currently, but hope they’ll return in force this year).
  - walshemj 5y ago
    Cash is better the employer can abuse tips given via cards - and screw the employees
  - throwaway0a5e 5y ago
    People who would would rather let the person receiving the tip decide if the government deserves a cut tip cash. And as others have said, using the employer's card processing flow gives the employer opportunities to do less than great things.