2 ms·

There would be winners and losers if we switched systems, as with any change. The winners would be consumers and workers in lower-end restaurants where tips are

by jgwil2 2y ago

There would be winners and losers if we switched systems, as with any change. The winners would be consumers and workers in lower-end restaurants where tips are generally small. The losers would be restaurant owners and workers in higher-end restaurants who make good money from tips under the current system. Right now, the potential losers are a lot more vocal and engaged than the potential winners (the system is shitty but not so shitty that most consumers get worked up about it, and low-wage workers just don't have a lot of political power).

swores 2y ago
Couldn't the higher-end / more expensive places just put their prices up by x% the same as a low-end place? Is the fear that if both cheap and expensive places moved tipping to higher prices (as an example let's say every single restaurant just raised menu prices by 15%) then more people would choose to go cheaper than do in the current situation of not thinking about accurate total cost until it comes to paying the tip after the meal? I know we all have cognitive biases so it's possible something like that would be the case, but from a purely logical point of view it seems that if people are happy to pay $500 per person for a meal and to tip $100 on top of that, then they should also be happy to pay $600 for a meal that doesn't need tipping, just the same as for meals that cost $15, and I feel that if it were a universal change (ie not just a single restaurant announcing "no tipping here" but a national or at least state-wide law) then there wouldn't be a huge amount of people chenging from visiting expensive to cheap places. > "winners and losers if we switched systems, as with any change" With many, even most, changes that's literally a requirement of the change - with tax changes that keep the total tax revenue the same you have to have some paying more in order to have others paying less. Or if the change is to raise more total tax revenue to fund more social benefits, some tax payers need to pay more in order for some people to get more help. Etc. But in this case the only losers would come from other people acting on illogical cognitive biases (with the exception of people who currently choose not to tip, or to undertip, who would then be forced to pay the real amount - but surely those people aren't a significant lobbying group, not a sympathetic group that others feel need protecting). Unless I'm missing some part of the equation and there is actually a reason higher-end place for necessarily do worse under a system where tips are included in the sticker price?
- jgwil2 2y ago
  > But in this case the only losers would come from other people acting on illogical cognitive biases (with the exception of people who currently choose not to tip, or to undertip, who would then be forced to pay the real amount - but surely those people aren't a significant lobbying group, not a sympathetic group that others feel need protecting). As I see it, there are two big groups of losers: restaurant owners, who fear that people may dine out less because of the "sticker shock" mentioned in the article, and any tipped staff of restaurants, who fear that their take-home pay will go down if they are paid an hourly wage with no tipping. So even if the "sticker shock" problem corrects itself after an adjustment period, the amount of money to be made as a waiter could very well permanently go down.
  - swores 2y ago
    The waiters' worry just needs to be addressed by, at the same time as banning tipping, a) removing the current loophole that allows hospitality staff to be paid less than minimum wage because tips will make up the difference and b) raising minimum wage anywhere that it's too low. It's crazy that instead of laws to prevent someone working full time as a waiter from being paid too little to live on they instead have to rely on customers not being too stingy and not tipping enough. The fact that nobody in other countries wishes they had the US system should be a big clue as to how bad it is - no European waiter is thinking "I wish my salary were half what it is and customers were told their tips are what prevents me from starving". It really isn't a "some winners, some losers" situation it's just a shit situation.
    - jgwil2 2y ago
      > removing the current loophole that allows hospitality staff to be paid less than minimum wage because tips will make up the difference This isn't really the issue: the employer is required to make up the difference if the worker's pay does not meet or exceed the normal (non-tipped) minimum wage. The issue is that the waiters are making serious money off of tips. Say they are making $5/hr for a six hour shift and that they serve 10 tables who each buy $100 worth of food during that shift: then their total pay is going to be 6 * 5 + 10 * 15 = 30 + 150 = $180 (since the custom is to tip at least 15% of the cost of the bill). That means that in order to make the same amount of money without tips, they would have to make $30/hr (and I've chosen pretty low numbers; you can imagine that in more expensive restaurants the money just gets better). That's a pretty expensive wage and it seems unlikely that most staff would get it. > no European waiter is thinking "I wish my salary were half what it is and customers were told their tips are what prevents me from starving" Obviously it depends a lot on the kind of place but I would guess that in high-end places, American waiters are doing better than their European counterparts (at least in terms of raw wages), as illustrated above. Servers and bartenders in full-service restaurants are by and large pretty big proponents of the tipping system. In any case, I'm not a proponent of this system at all; I'm just trying to answer your question of why it hasn't changed by showing that there are in fact groups that benefit from the system as is, so it's not pure inertia that prevents us from getting rid of it.

by jgwil2 2y ago

swores 2y ago

Couldn't the higher-end / more expensive places just put their prices up by x% the same as a low-end place? Is the fear that if both cheap and expensive places moved tipping to higher prices (as an example let's say every single restaurant just raised menu prices by 15%) then more people would choose to go cheaper than do in the current situation of not thinking about accurate total cost until it comes to paying the tip after the meal? I know we all have cognitive biases so it's possible something like that would be the case, but from a purely logical point of view it seems that if people are happy to pay $500 per person for a meal and to tip $100 on top of that, then they should also be happy to pay $600 for a meal that doesn't need tipping, just the same as for meals that cost $15, and I feel that if it were a universal change (ie not just a single restaurant announcing "no tipping here" but a national or at least state-wide law) then there wouldn't be a huge amount of people chenging from visiting expensive to cheap places. > "winners and losers if we switched systems, as with any change" With many, even most, changes that's literally a requirement of the change - with tax changes that keep the total tax revenue the same you have to have some paying more in order to have others paying less. Or if the change is to raise more total tax revenue to fund more social benefits, some tax payers need to pay more in order for some people to get more help. Etc. But in this case the only losers would come from other people acting on illogical cognitive biases (with the exception of people who currently choose not to tip, or to undertip, who would then be forced to pay the real amount - but surely those people aren't a significant lobbying group, not a sympathetic group that others feel need protecting). Unless I'm missing some part of the equation and there is actually a reason higher-end place for necessarily do worse under a system where tips are included in the sticker price?

jgwil2 2y ago
> But in this case the only losers would come from other people acting on illogical cognitive biases (with the exception of people who currently choose not to tip, or to undertip, who would then be forced to pay the real amount - but surely those people aren't a significant lobbying group, not a sympathetic group that others feel need protecting). As I see it, there are two big groups of losers: restaurant owners, who fear that people may dine out less because of the "sticker shock" mentioned in the article, and any tipped staff of restaurants, who fear that their take-home pay will go down if they are paid an hourly wage with no tipping. So even if the "sticker shock" problem corrects itself after an adjustment period, the amount of money to be made as a waiter could very well permanently go down.
- swores 2y ago
  The waiters' worry just needs to be addressed by, at the same time as banning tipping, a) removing the current loophole that allows hospitality staff to be paid less than minimum wage because tips will make up the difference and b) raising minimum wage anywhere that it's too low. It's crazy that instead of laws to prevent someone working full time as a waiter from being paid too little to live on they instead have to rely on customers not being too stingy and not tipping enough. The fact that nobody in other countries wishes they had the US system should be a big clue as to how bad it is - no European waiter is thinking "I wish my salary were half what it is and customers were told their tips are what prevents me from starving". It really isn't a "some winners, some losers" situation it's just a shit situation.
  - jgwil2 2y ago
    > removing the current loophole that allows hospitality staff to be paid less than minimum wage because tips will make up the difference This isn't really the issue: the employer is required to make up the difference if the worker's pay does not meet or exceed the normal (non-tipped) minimum wage. The issue is that the waiters are making serious money off of tips. Say they are making $5/hr for a six hour shift and that they serve 10 tables who each buy $100 worth of food during that shift: then their total pay is going to be 6 * 5 + 10 * 15 = 30 + 150 = $180 (since the custom is to tip at least 15% of the cost of the bill). That means that in order to make the same amount of money without tips, they would have to make $30/hr (and I've chosen pretty low numbers; you can imagine that in more expensive restaurants the money just gets better). That's a pretty expensive wage and it seems unlikely that most staff would get it. > no European waiter is thinking "I wish my salary were half what it is and customers were told their tips are what prevents me from starving" Obviously it depends a lot on the kind of place but I would guess that in high-end places, American waiters are doing better than their European counterparts (at least in terms of raw wages), as illustrated above. Servers and bartenders in full-service restaurants are by and large pretty big proponents of the tipping system. In any case, I'm not a proponent of this system at all; I'm just trying to answer your question of why it hasn't changed by showing that there are in fact groups that benefit from the system as is, so it's not pure inertia that prevents us from getting rid of it.