We had a referendum in Maine on the minimum wage last election. The referendum question passed by popular vote.
It raised minimum wage to $9 per hour and $5 for tipped employees. Each year thereafter, the normal minimum wage will go up by $1 until it reaches $12 per hour, and thenceforward will be indexed to inflation. The tipped minimum wage is also going to increase by $1 per year, until it matches the normal minimum. (Cite for the law as it is now written).
It has only been law for a few months, and there are those popping up who are already trying to alter or repeal parts of it. The biggest bone of contention is the tip credit. The restaurant industry is pissed off that it will not be allowed to dock their servers’ wages for gifts they receive while on the job anymore. They can go piss up a rope for all I care.
Fuck employers who think they shouldn’t have to pay a decent wage. And fuck any member of the legislature who thinks it’s okay to override the citizen’s initiative. And fuck the very notion of a tip credit! My employer doesn’t get to dock my pay anytime someone gifts me money. Why should restauranteurs get to do so with waiters?
Not to justify the practice of not paying a minimum wage, but most restaurants operate on relatively slim margins while servicing large debt from startup costs for years, and are reliant upon various corner cutting to show consistent profitability. Passing the additional expense of raising wages off to the customer is often not appealing because customers willl frequently balk at increases of a couple of dollars. The good answer is to raise prices according to the need to pay minimum wage and discourage tipping to offset, but tipping culture is so entrenched in the United States that the result wouldn’t be palletable to either customers or waitstaff (who want both minimum wage and tips).
However, I predict this issue will soon be addressed by replacing waitstaff with autonomous servers with display touchscreen faces showing whimsical pictures of kittens playing with shoelaces, and former waitstaff will have to find jobs mining phlebotinum for SyFy and Netflix science fiction conspiracy thrillers. So, everybody wins, especially the robots, who are soon to be the only sentient beings that matter.
Business owners that can’t simultaneously turn a profit and treat their employees well have quite a difficult time accepting the fact that they aren’t the genius businessmen and women that they’ve fancied themselves to be.
It may possibly surprise you to learn that increasing the cost of something decreases the incentive to use that thing.
Unfortunately for proponents of increasing the minumum wage, this push is coming just as technology is becoming capable of replacing restaurant workers. A business owner may balk at buying a pricey automated system if he can pay his employees $9/hour. But if he has to pay $15/hour, the comparative economics may suddenly change.
Options range from simple convenience for the customer to actually eliminating current jobs.
I don’t know if you’ve worked in the food service industry, but it is an industry with inherently low profit margins, high waste and theft costs, significant liability and maintenance expenses, a lot of personnel turnover, and is sensitive to both fluctuations in food costs and consumer spending while being relatively inflexible about adjusting menu prices. Most mid-range, sit down restaurants make their profits on alcohol sales with food being essentially a loss leader, while fast food relies on volume to make up for tiny margins and high end is dependent upon reputation and cachet.
I don’t think anybody in the restaurant business considers themselves a “genius businessman/woman”; they do it because they have a passion for food service despite the hardships, or because it is the business that they know best. Or, it’s a cover for their blue meth distribution ring.
There is also the fact that many waiters and bartenders make a whole lot more than the regular minimum wage anyway. When I did it, it paid quite well (through tips - the paycheck was an afterthought) and well over $15 an hour (often many times more) even in the early 1990’s. If tipping is discouraged, there will be a significant amount of people whose total pay goes DOWN sharply rather than up especially in nicer places or very busy ones. Many waiters and bartenders function like independent contractors rather than real employees no matter what their legal classification is.
I am not sure I support this rant. I don’t think a 16 year old working at McDonalds for spending money should be paid the same as waiters at a high end seafood restaurant staffed by professional servers during the high season on Martha’s Vineyard. I realize that tips would not go away completely at first but there will be less pressure for people to tip well once everyone is guaranteed a similar wage. If that happens, you just screwed a whole bunch of people out of a truly living wage by giving them a “gift” in the form of a universal law.
Restaurant food generally costs more (relative to the general cost of living) in other nations, and servers make a higher base pay.
The problem, I think, is that tipping is culturally ingrained in the US. If you increase base pay a bunch and people keep tipping, it’s unsustainable. Or something. I’m not sure how this interacts. I would love it if expected cultural tipping would die a quick and painless death, but that doesn’t seem to be where we’re headed.
Which is, of course, an argument for abolishing capitalism, so that the benefits of automation are enjoyed by all rather than creating winners and losers.
And yet they have restaurants, despite the higher base pay. No shortage of them, AFAICT.
I would expect it to see a gradual decrease, as old habits die hard. In Europe, it was hard for me to not tip 20%, even with European friends at the table reminding me that 10% was a hefty tip there. But eventually we’d get the idea.
I don’t know if waitpersons need to be paid the minimum wage, but the gap shouldn’t be as big as it is now. If you only have to pay your waitstaff $2.13/hour, it costs you close to nothing to keep them around all afternoon, folding napkins and stuff, while there’s hardly any business. I’d fix the minimum wage at, say, 70-75% of the minimum for everyone else.
Restaurants in Europe are more expensive and regarded as more of a luxury for middle class people than for the United States, where “eating out” is a regular expectation to the point that many people do not even prepared food at home, subsisting off of prepackaged food, take out, or sit down restaurants.
I’m not going to argue against a minimum wage, but realize that it will upset the balance of cost versus expectations, and drive many consumers to cheaper chain restaurants which can produce subpar quality food at a low price point. That’s a trend that has been going on for the last several decades and will likely continue anyway. Tipping will also upset people who make their living on tips (as Shagnasty points out, many servers at nicer restaurants and virtually all bartenders regard their paycheck as “gas money” and tips as income), so abolishing the expectation of tipping will impact their service as well even if it is offset by somewhat higher per plate prices to justify higher wages.
But, as I said, once the robots take over, we’ll all be eating vat-grown yeast and polishing their shiny chrome robot foreheads anyway while begging like Victorian ragmuffins. Equality for all!
When I was in Texas my wife worked for $2.13 an hour for a restaurant that netted 7 million a year. Net. She also was required to pay from her tips 6% of total sales to the bar and 4% to the bus staff. If you didn’t tip her she paid to wait on you. Her paychecks were zero dollars and said void on them.
Sorry, but if you can’t pay your staff after a net profit of 7 million, fuck you. And double fuck you if you can’t pay your bartenders and bus staff and make your other employees pay their wages for you.
Consequently when we moved to Oregon we have no problems going out and still paying 20%. Waiters here get paid nine dollars an hour. And generally aren’t on welfare. Not like back home.
Yes, those are additional benefits of increasing the minimum wage. Businesses will be forced to become more productive by using fewer workers to do the same amount of work. And those remaining workers will have more disposable income, thus increasing consumer spending. The other workers will find jobs where there are labor shortages due to the increased consumer spending.
So, yes, while there are short-term losers when the minimum wage goes up (inefficient businesses failing, worker dislocation), the long-term impact is very positive.
It’s highly disingenuous to refer to tips as “gifts”. No, I take that back. It is an outright falsehood to claim that tips are gifts. And I suspect you know that. And I further suspect that you’re intentionally trying to obfuscate the discussion by doing that.
Tips are considered income. Tips are taxed, as income. Gifts (in the amount generally received as a tip) are not taxed.
If you can state your argument without resorting to blatant misrepresentations and outright falsehoods you might have a better chance of convincing people of your point of view. But you just sound like you’re ranting without actually knowing what you’re talking about.
So… why don’t you open a restaurant and show us how it’s done?
They do. Owners are required to make up the difference if the waiters don’t get it in tips. That’s a federal law. We go over that in every thread about this subject.
No, it’s all true. This is why Minnesota, which doesn’t allow employers to dodge their fiscal responsibilities through tip credits has no restaurants at all.
From the perspective of the IRS, tips are not a gift, but that’s really not relevant to this discussion. Functionally, tip income is fully dependent on the goodwill (and/or guilt) of the customer. I am fully within my legal rights to eat a meal at any restaurant and leave without tipping one thin dime. I don’t think there is any other profit-making industry where paying the full cost of the service that has been provided requires the customer to make a voluntary donation to the laborers.
Yes, but judging from many discussions with people who have worked as waitstaff:
a) a lot of people working as waitstaff do not know that, and
b) a lot of restaurant owners either do not know that, or are counting on their employees not knowing that.
I don’t care what the IRS calls it; it’s functionally the same as a gift. It may be socially expected of me, but so was chipping in $10 with my co-workers to get my boss a gift at Christmas time.
Because nobody has a right to disagree with a business practice unless they run that particular business? You don’t have to be a restaurant owner to recognize when people are getting screwed.
Or do you report your gifts to your employer so he can dock your paycheck by the amount of the gift?
Also, if you can make a good argument for tips being gifts, try it out on the IRS. I am sure that if you succeed, all waiters in the country will thank you, and all waiters will be calling their tips a gift from now on.
Good luck on that.
There is also the fact that it is a bit complicated, and many restaurants take advantage of that.
My understanding is that it is supposed to be that servers need to make MW per hour, so if they don’t have any tables, or the tables that they do have stiff them on the tip, or if they just don’t have enough tables and tips to make it to MW from their tipped MW, then it needs to be made up for that hour.
Every restaurant I have worked at has not done that, and instead, averaged it over a shift instead. Some tried averaging it over the pay period, but at least one I worked at got in some pretty serious legal trouble about that.
Averaging over a shift allows servers to be used as low cost labor for “side-work.” Now some side work makes sense, roll some silverware, wipe off the tables, but I have been in places where they have the servers working for at least an hour, often two, both before and after they have tables. The average over the shift is over MW, but they are working for a few hours at substantially less.