Loud Eaters

[boost]

I read the start of your posts jkds, but then just skimmed after I see that a lot is based on the "fact" that there is no law forcing the companies to raise the servers wages.

This is infact not true, as the establishment is forced to pay the servers more if they do not make enough tips. If min wage is $5, and servers are making $2/hr, and they are only making a dollar in tips/hr, the employer MUST make up the difference between min wage and the servers earned hourly rate, being $2/hr. This is not a choice, this is the law.


edit: did some more skimming..

Yes, you are correct, if a select few people dont tip, menu prices probably wont increase at all. This is because if only 5% of people are non tippers, the servers will still come in above minimum wage, and therefore the restaurant will incur no further costs and will have no reason to increase prices.

However, service will decrease by an unquantifiable amount. We can prove this by taking the extreme example of comparing the service rendered by a server who is paid $200,000/year to do their job versus a server who is paid $10,000/year. Obviously the effect of the tip pool being lowered by the 5% non tippers will not be nearly as drastic. However there is an effect. So in this case you are not stealing a fraction of a cent from every other person who tips, instead you are robbing them of some measure of quality service.

Now that we have covered that, we can go back to my original extreme example where everyone stopped tipping. This can have two effects, menu prices go up so that employers can adequately compensate competent quality servers, or service goes to shit because employers chose to employ people at minimum wage, attracting a less skilled crowd.

cliffs: you can go around tipping 0%, but you only benefit from a lowered cost (for that quality of service) so long as other people continue to tip. Therefore, other people are picking up your slack.

[JKDS]

This is infact not true, as the establishment is forced to pay the servers more if they do not make enough tips. If min wage is $5, and servers are making $2/hr, and they are only making a dollar in tips/hr, the employer MUST make up the difference between min wage and the servers earned hourly rate, being $2/hr. This is not a choice, this is the law.

Yes i agree, however we have several competing establishments. There are probably at least 10 diners within 10 miles of anyone that isnt living in the middle of nowhere. So say we find that one employer's staff isnt making enough money and thus has to increase their wages and thus has to increase menu prices. That company will likely die as the places which had staff that got better tips on average (for whatever reason) wouldnt have to do this, and wouldnt have to increase menu prices, and this place would then experience a net increase of customers from the place that just increased their prices.

Lets take an even more extreme example where nobody tipped well ever. Because this particular thing is so competitive, and its a luxury item, increased menu prices would never really work. The place that increased their prices the least would end up stealing many customers away from other places because you arent going to buy a $17 steak as often as you would a $13 steak if they taste the same.

This is perhaps easiest to see by having half the diners close down, in which case we might say that the remaining diners doubled their customers. If this were to happen, the establishments could end up makign the same amount of money as before even with increased staff wages.

It isnt as simple as just saying "well, the wages go up, so menu prices go up" because of this severe competition and the necessity that menu prices stay low in order to maintain business.