Stossel: The End of Tipping

[Hammerfest]

John Stossel looks at what would happen if tipping went away in favor of increasing the minimum wage for tip jobs...

[Kapadons]

John Stossel looks at what would happen if tipping went away in favor of increasing the minimum wage for tip jobs...

I swear Joe’s Crab Shack tried this a few years back in select markets and the servers hated it as they came away with less money than with making shit wage plus tips.

A standard tip in a restaurant is 15% of the ticket. No one else, including the owner, makes 15% of sales as a wage. Im sure some people in low volumn cafes and such would benefit from a standard minimum wage. Any server worth their salt at any restaurant serving dinner and drinks would easily make more than the standard wage purposed.

[Skulltaker]

I swear Joe’s Crab Shack tried this a few years back in select markets and the servers hated it as they came away with less money than with making shit wage plus tips.

A standard tip in a restaurant is 15% of the ticket. No one else, including the owner, makes 15% of sales as a wage. Im sure some people in low volumn cafes and such would benefit from a standard minimum wage. Any server worth their salt at any restaurant serving dinner and drinks would easily make more than the standard wage purposed.

That's assuming everybody tips, though. I'd bet that a great many either don't, because they don't care, or can't, because they lack money.

[Kapadons]

That's assuming everybody tips, though. I'd bet that a great many either don't, because they don't care, or can't, because they lack money.

The flip side is people can and often do tip more than 15%.

Sometimes you get screwed by a table. Sometimes you get a big tip.

[AeneasBK]

[Jonnusthegreat]

I really wish tipping wasn't a thing. Would make my expenses go way down.

[Deleted]

Works fine around these parts, where tipping is basically none existent.

[vindicatorx]

A few things a lot of people aren't aware of. I was a Manager at one of these tipped establishments so I know a little more about what is going on.
1) All servers are guaranteed minimum wage. If a server makes less than minimum wage with tips then the employer has to pay MWD which is the minimum wage differential which depends on the state on how it is figured but they still earn at least minimum wage.
2) They rise in use of credit cards has cut back a lot on how much a server can cheat on taxes. In establishments where people only use cash there is a lot of servers lying about how much they are tipped. Generally they claim 8% of sales which is way less than they actually make. Credit and debit cards show exactly what was tipped so a server can't lie and say they were paid less.

I mean there is no way the US is going to drop tipping overnight I think that if the money wasn't there we wouldn't see as many career servers as we do.

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I really wish tipping wasn't a thing. Would make my expenses go way down.

No, it wouldn't. You think prices wouldn't increase to cover the labor costs increase? Most places want labor costs to be around 20 to 25% of total sales. There are 2 options to maintain this percentage when you raise what half the employees are paid by 60% or more. You either have less employees or you raise prices.

[Deleted]

We don't tip in Denmark

[Narwal]

Tipping won't go away. All that will happen is the bill will be broken down into 2 line items

Goods: $xx.xx
Service: $xx.xx

They will force a tip, and give less to the employee. The beautiful thing about tips, is that you're allowed to actually pay the person what you think their time and effort were worth, and the business can't strip that down.

My haircut takes about 15-20 minutes to do, I tip $5 because they do it well, and they do it fast. It would piss me off if the hair place started charging me $5 more, and the service got slower (because they're no longer being driven to be fast to get onto the next tipper). When you're only paid hourly, work is just a run-out-the-clock situation.

If a person isn't making tips, they're probably not doing it well. A company should be (if they're not forced already) to supplement a person pay, if through pay and tips they don't meet minimum wage for that pay period. In this way, they're not penalized too heavily for not getting tips, yet still gives them the chance to make great wages through strong tips.

[Dys]

I just wish the tip-reliant staff would shut the fuck up when they do get stiffed. You want to roll the dice with your wage, and then throw a fit when someone doesn't abide by your expectations? Fuck you, suck it up and accept it like an adult, or get a job with a real wage, again, like an adult.

[Jonnusthegreat]

A few things a lot of people aren't aware of. I was a Manager at one of these tipped establishments so I know a little more about what is going on.
1) All servers are guaranteed minimum wage. If a server makes less than minimum wage with tips then the employer has to pay MWD which is the minimum wage differential which depends on the state on how it is figured but they still earn at least minimum wage.
2) They rise in use of credit cards has cut back a lot on how much a server can cheat on taxes. In establishments where people only use cash there is a lot of servers lying about how much they are tipped. Generally they claim 8% of sales which is way less than they actually make. Credit and debit cards show exactly what was tipped so a server can't lie and say they were paid less.

I mean there is no way the US is going to drop tipping overnight I think that if the money wasn't there we wouldn't see as many career servers as we do.

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No, it wouldn't. You think prices wouldn't increase to cover the labor costs increase? Most places want labor costs to be around 20 to 25% of total sales. There are 2 options to maintain this percentage when you raise what half the employees are paid by 60% or more. You either have less employees or you raise prices.

Service would definitely be worse, but cost would go down.

[Daedius]

Ehm, we give waiters minimum wage AND tip them in most places I've been to around Europe.

Tipping is completely optional, up to the patreons' own discretion, in the EU... And I rarely tip unless the waiter/service went out of their way beyond just doing their job.

Unlike certain countries that stupidly include it in the bill like some extra tax % to which I abhorre...

[Thage]

I just wish the tip-reliant staff would shut the fuck up when they do get stiffed. You want to roll the dice with your wage, and then throw a fit when someone doesn't abide by your expectations? Fuck you, suck it up and accept it like an adult, or get a job with a real wage, again, like an adult.

On the flip side, if a tradesman runs out to a job site, does the job, and the person they did the job for tries to fuck them over by, say, refusing to pay the labor fee on the bill, you're damn right they're going to have an issue with that.

And why shouldn't they? It's perfectly reasonable to be upset that someone wasted your time when you could have spent that time performing your service for someone who won't cheap out on you, whether it's a plumber or AC tech on the job site, the IT guy in an office building, or a server who just busted their ass giving a table top-notch service only to get a line through the gratuity on the ticket when they've got three other tables on top of it.

But no, Dys is triggered by people being irritated when someone expects a convenience service and won't pay for it, because of arbitrary lines between what is and isn't an 'adult' job (and this is speaking as someone who recently switched careers to work in sheet metal to help a friend get their business up and running, in case we need to pass that arbitrary barrier to be allowed an opinion on the subject by the magnanimous Drys) so obviously people aren't allowed to be upset at cheapskates taking advantage of a service.

[Moralgy]

It depends on where you live. Tip based work in a small town will pay FARRR less than tip based work in a large city.

[stevenho]

How is it even legal to employ full time for $2 per hour? I don't get it.

[vindicatorx]

Service would definitely be worse, but cost would go down.

No, it wouldn't. It would go up as anyone with a brain would be able to figure out right away. They aren't going to charge the same thing when they have to pay more out of pocket expenses. They could just do what Mc Donald's has done and have self service to keep costs the same but that kinda defeats the purpose of going to a sit down restaurant doesn't it?

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How is it even legal to employ full time for $2 per hour? I don't get it.

I already explained that

[Lochton]

I'd rather see people with a fair wage and a chance of a tip than people who has to rely on tips.

I hardly ever give tips. When I do, it is when the service has been feeling higher than ever.

[God Save The King]

The issue with tipping is it really doesn't vary much based on the server or quality. There is a weak correlation, but generally people will tip the same regardless, as long as nothing truly terrible happens. Baking tips into wages, and therefore into prices, really wouldn't change much of anything. You'd still pay the same amount more or less. The only real drawback is for people who do not tip at all. Americans, on average, tip about 16.4% of the bill. The societal pressure is 15%-20% tip and it is a very bad social practice to tip less than 10%. Tips do a few things, they make servers think that their wages fluctuate based on their own performance, and inspires them to "work harder" to earn more money. The reality is that neither of those things actually happen. People tip basically the same no matter what, and people stay pretty much as long as they want to regardless of your service. Actually exceptional service tends to make people stay longer, and mediocre service makes people leave sooner. Therefore, a mediocre server generally serves more people per hour and receives a higher tipped wage (not a large difference, but still).

[Underverse]

On the flip side, if a tradesman runs out to a job site, does the job, and the person they did the job for tries to fuck them over by, say, refusing to pay the labor fee on the bill, you're damn right they're going to have an issue with that.

And why shouldn't they? It's perfectly reasonable to be upset that someone wasted your time when you could have spent that time performing your service for someone who won't cheap out on you, whether it's a plumber or AC tech on the job site, the IT guy in an office building, or a server who just busted their ass giving a table top-notch service only to get a line through the gratuity on the ticket when they've got three other tables on top of it.

But no, Dys is triggered by people being irritated when someone expects a convenience service and won't pay for it, because of arbitrary lines between what is and isn't an 'adult' job (and this is speaking as someone who recently switched careers to work in sheet metal to help a friend get their business up and running, in case we need to pass that arbitrary barrier to be allowed an opinion on the subject by the magnanimous Drys) so obviously people aren't allowed to be upset at cheapskates taking advantage of a service.

That's not the same thing; your analogy would apply to customers walking out without paying for their food. But tipping is specifically optional and dependent on the quality of service.