If tipping went away the food shouldn’t be more expensive to the consumer, the restaurant owner should take a pay cut and pay their employees better. Why does everyone always assume that if minimum wage went up or if tipping went away that the customer would absorb the cost?
Currently servers are currently paid minimum $2.13/hour. If they don’t make enough after tips to equal minimum wage over a pay period ($7.25/hour), then the restaurant is required to pay them up to that minimum wage.
Labor costs for servers, bartenders, and others caught in this legal loophole would have to increase by 7-fold to get up to $15/hour. Many restaurants and bars wouldn’t be able to afford that large of an increase without raising prices, given that many have a profit margin between 3-6% per several sources.
There have been some restaurants that have raised wages closer to $15/hour with varying success, but that hasn’t caught on widely yet.
Well then if a business can’t operate without underpaying their employees or passing the financial burden to the customer then maybe their business doesn’t deserve to stay open.
That’s not really relevant. My reply was in response to statement that food shouldn’t be more expensive to the consumer with tipping removed. Obviously the revenue for the servers to be paid has to come from somewhere, so it’s either coming from the price of food or tips. If we get rid of tipping, the restaurant will have to raise prices to cover that cost.
Huge chains could more easily pay a better wage than family-owned restaurants.
If tipping went away the food shouldn’t be more expensive to the consumer, the restaurant owner should take a pay cut and pay their employees better. Why does everyone always assume that if minimum wage went up or if tipping went away that the customer would absorb the cost?
Currently servers are currently paid minimum $2.13/hour. If they don’t make enough after tips to equal minimum wage over a pay period ($7.25/hour), then the restaurant is required to pay them up to that minimum wage.
Labor costs for servers, bartenders, and others caught in this legal loophole would have to increase by 7-fold to get up to $15/hour. Many restaurants and bars wouldn’t be able to afford that large of an increase without raising prices, given that many have a profit margin between 3-6% per several sources.
There have been some restaurants that have raised wages closer to $15/hour with varying success, but that hasn’t caught on widely yet.
Well then if a business can’t operate without underpaying their employees or passing the financial burden to the customer then maybe their business doesn’t deserve to stay open.
That’s not really relevant. My reply was in response to statement that food shouldn’t be more expensive to the consumer with tipping removed. Obviously the revenue for the servers to be paid has to come from somewhere, so it’s either coming from the price of food or tips. If we get rid of tipping, the restaurant will have to raise prices to cover that cost.
Huge chains could more easily pay a better wage than family-owned restaurants.