Today's Local Polls: Should tipped wages, instead of minimum wage, for restaurant servers be eliminated?
Obviously the one's voting yes have never had to rely on tips to pay the bills. Most people who serve, work their tails off and deserve tips and a higher wage.
The idea that anybody "deserves" to earn more than they make is rooted in Marxist economics, the Karl Marx fallacy of "labor theory of value." Ditto for the whole "living wage" hokum. It's all based on a poor understanding of markets and economics.
The only thing any of us "deserve" to earn is what we can convince somebody else to pay us. That's how market economies work. Supply and demand.
Studies show that as minimum wage goes up, tips go down. Customers seem to know. So if servers are put on the current minimum wage, their tips would decrease, perhaps to the point where they're actually making less.
Existing restaurants are built around the current cost structure so forcing restaurant owners to suddenly shoulder the burden for the loss of tips, just forcing them to pay more, would put their balance sheets out of wack and drive many, if not most, of them (at least the family owned ones) out of business. That would be bad for the owners, bad for their employees, bad for their communities. At a minimum, they would have to cut hours of existing employees. If they raise prices, of course, they will do less business and jeopardize their already thin margins.
Howard - I have to disagree with your overreaching statement that getting rid of tipped pay and replacing it with real pay would "drive many, if not most, of them (at least the family owned ones) out of business".
What would happen is that menu prices would rise to offset the shifting of direct wage costs from customer to restaurateur. There would be an adjustment period where some customer would have a level of shock at that change, and would shift their buying habits accordingly. However, people are still going to eat out, and that shift for some of them would be temporary once they realized the cost of eating out is not really changing much (except for the cheap SOBs who tip poorly).
As with any change in how things work, there would be some who will not be able to adjust, and, yes, some restaurants would go out of business. I agree that the ones most subject to this are the small non-chain places. But to claim that "many, if not most" of them will go out of business? That's going overboard.
Tim, one going out of business because of a change in the law is one too many.
Yes, some consumers would adjust to the prices, and some wouldn't and among those who do, they would look for other ways to cut their spending, which would also harm the restaurant owners. And that would have an effect on the ability of many small business owners to stay in business.
Howard - I do not disagree with a restaurant going out of business due to something out of their hands being a tragedy to those involved.
However, if the current wage structure is unfair - no matter how long it has been in use - is it proper or even ethical to continue that structure?
I believe where we have the most significant difference of opinion here is the definition of "fair/unfair". I strongly believe "we've been doing it this way forever" and "people choose to work these jobs" say nothing about fair or unfair.
If people take and retain jobs at the wages offered, it's fair.
What is fair in forcing a business owner to lose his or her business, putting not just that owner out of work but everybody that works in that business out of work and jeopardizing jobs up and down the supply chain?
What is fair about forcing a business with tight margins to cut hours for employees and even layoff employees?
A tip in my mind is an investment in retaining the kind of restaurants that I prefer. It's a worthwhile investment. I would be happier knowing that a restaurant's employees were not on the lower level of a tiered minimum wage. At the same time I recognize potential negative outcomes of transitioning employees to the upper tier. Mostly I recognize that such a transition hurts small businesses disproportionally. That in turn affects me. Not only are those the restaurants that I patronize, local businesses keep my money in my community. Despite being imperfect, tips level the playing field between the little guy and corporate chains. If we hadn't allowed out-of-state, money-siphons into our communities we wouldn't be having this discussion. Restaurants like Sportos could raise their prices, pay their employees a higher minimum wage without fear of customers defecting to Tim Horton's. In the same vein as tearing down Main Street to get a Wendy's and half-a-J C Penney store.
Howard, in my opinion you come off as anti labor, here is a question for you, which came first, corporate greed, or the labor unions?
What came first -- small business owners.
if the customer decides who gets paid then it would only be fair for the server to be able to choose who they serve.
Howard, what came first, sweatshops, fire traps, long hours, and poor working conditions, or the unions? Unions, govt. regulations, this is all self inflicted. We have seen in the past what happens when no one is watching. The difference now is it is being done in foreign lands where there is a new labor market to exploit.
What came first? The employers who create the jobs that raise people's standard of living.
Another answer with a question, my number 9 comment needs editing, it is no longer an opinion.