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I wonder how the math works out versus a no-tip scenario? Tips are money that doesn't come out of the restaurant owner's pocket. Restaurants tend to run on pre
by bradleyland 14y ago
I wonder how the math works out versus a no-tip scenario?
Tips are money that doesn't come out of the restaurant owner's pocket. Restaurants tend to run on pretty thin margins, so let's treat this as a zero sum game and assume that any increase in wait staff wages is necessarily passed on to the consumer. I know next to nothing about what a waitress earns or how a restaurant is run, so I'd appreciate if anyone wanted to shoot holes in my reasoning here. I'm genuinely curious, so treat this as a proposition of method, rather than proof.
Florida minimum wage for tipped employees is $4.65/hr. I live in Florida, so I'll go with that.
$4.65 x 40 hrs a week x 52 weeks a year is $9,672.00
I've known local waitresses who claim to take home around $30k a year (with tips).
$30k annually works out to a wage of $14.42/hr given the same 40 hrs x 52 weeks work schedule.
$14.42 is about 3 times $4.65
So in a general sense, the restaurant owner would have to pay his wait staff (around) three times as much in order to meet their tipped wage. Not having run a restaurant, I have no idea how that would affect the price of a meal. Can anyone with more knowledge pick it up from here?
- pyoung 14y agoIf, after increasing the wages, tipping is no longer 'required' of customers, the total price of a meal would stay roughly the same. The owner would raise the price of the meal by about 15%, and pass that on to the servers, however tips would no longer be expected.