As you say, I don't understand why people think that tipping actually helps w/ service. OTOH the masses still drag out that incorrect tale of To Insure Prompt Service
It was just proof for me that tips didn't have anything to do with good service, not in the long-run or the short-run.
Of course, I tip still, because it's part of their wages and they deserve it. But I don't for a moment think that it actually teaches them to serve people better.
Meaning, no tip restaurants usually have higher prices, but customers do not trust that the higher prices went to the staff. Management needs to make some statement of wages (high wages) to prove that the tips are sufficient.
IMO distrust of management's greed is the real culprit
Wage theft is a thing tho.
Ugh, people are idiots! Paying an employee an actual wage will guarantee them income in a way that tipping does not. If an employee is hired at a particular hourly wage, we have labor laws to ensure they are receiving their pay. In contrast, tipping provides no guarantees and actually enables the abuses these same people fear. For example, legally a restaurant has to make a waiter whole if their tips+ low hourly wage does not get to actual minimum wage. Despite this requirement, many restaurants violate it BC tipping as the default puts the burden on the waiter to bother their boss when they didn't make enough.
Imagine instead if when you checked out at Target, you paid the cashier directly because you didn't trust target to pay them?! The idea seems ludicrous but apply it to tipping industries and it somehow is normal.
The real culprit is people feel comfortable with what they know and fear change.