It is belittling, and almost nobody except restaurant owners likes it. It's sort of a game theory problem - if we could coordinate everyone to stop tipping, then restaurants would be forced to pay their workers normal wages, and almost everyone would be better off. But if I stop tipping, I'm just an asshole making no impact on society.

I guess the only practical approach is to simultaneously keep tipping and push for your city/state/country to eliminate the tipped minimum wage loophole.

Restaurant owners do not like it. For them it means a fixed percentage of revenue has to go to the front of house. Also, it means that waitstaff will side with the customer’s interests over the restaurant’s. Consider for example a round of free drinks at a bar—increases the tip but costs the bar.

Restaurant owners that have tried to eliminate tipping find a) customers are uncomfortable and sometimes try to tip anyway and b) would be customers compare prices without taking into account the fact that tip is included.

The people I’ve talked to most inclined to support tipping culture are servers at mid to expensive restaurants and demanding foodies.

> For them it means a fixed percentage of revenue has to go to the front of house.

??? Tipping is not a "fixed percentage."

You may have a few edge cases here, but I have to push back on the idea that business owners don't like it. They get to pay their front house staff next to nothing, this money consistently goes untaxed, and it gives their employees incentive to work hard.

It also gives their front house the capability to make an income that the owner themselves would never dream of paying, meaning they can have talented employees just show up magically without having to alter their business in any way.

I have to agree that the people who like it THE MOST are the people also most likely to complain: the servers and bartenders. It only takes some basic math to identify that being a server is the highest paying entry level job in the United States simply because of tipping culture.

It’s not a fixed percentage but it’s close enough to think of it that way.

The real problem is that they are legally prohibited from using tip share to pay their back of house more.

This puts them in a situation where if they want to raise kitchen staff wages they have to raise prices and restaurant customers are extremely price sensitive.

Several high end restaurants (were presumably there would be less price sensitivity) have tried doing away with tips and raising their prices to pay all staff a more uniform wage. It’s largely failed. Customers don’t like higher prices and front if house staff largely prefer tips as they make more (at the cost of lower pay for their kitchen colleagues).

> being a server is the highest paying entry level job in the United States simply because of tipping culture.

...if you get just the right job in just the right area. The exact same job—even at a chain—in two restaurants just a few miles apart could have massively different levels of tips.

> customers are uncomfortable and sometimes try to tip anyway

This is almost certainly largely because of another of the incredibly frustrating aspects of tipping: it's entirely informal, with no way to tell what's expected of customers. The etiquette around it can be extremely confusing on both sides, too—I've heard stories of workers who are strictly forbidden from acknowledging tips to customers, so that if you asked, they would have to say "no, you don't need to tip", even though they're still considered tipped workers legally.

So unless there's explicit statements from the establishment of "we do not accept tips for our workers, because we make sure their wages are high enough not to need that", you can't take "you don't need to tip" at face value. Hell, even then you can't; I wouldn't be remotely surprised to see unscrupulous business owners put that even when they do not, in fact, pay their workers well, especially in areas near where other places say it truthfully.

> Restaurant owners do not like it. For them it means a fixed percentage of revenue has to go to the front of house.

Reducing fixed period costs (e.g. labor costs of servers, rent, IT hardware) to revenue based splits (e.g. tipping, hotdesks at coworking spaces, the cloud) is an excellent way to minimize risks and most businesses are willing to pay a premium for that.

That may well be the case, but in the restaurant industry it is potentially keeping in place a local maxima. No restaurant can experiment with spending less on front of house and more on back of house, ingredients, or space. That percentage of revenue (~25%) is locked in and untouchable.

Spending 25% on the front of the house? That's a huge amount - labor is probably less than 25% all in.

20% comes off the top in the form of tips that never make it to the till. The other 5% is a fudge factor for the fact that you still need to pay something in wages.

Your numbers imply that the hourly productivity of a waiter in the US serves food that is just under $50 on the menu and thy make a $12.50 tip on the same. More in areas with a higher tip minimum wage. Do those numbers seem reasonable to you?

I don’t understand where you are getting those numbers.

Business owners like the fact that their staff are incentivized to sell as if paying a percentage commission on sales, but the commission is paid by the consumers.

I think you'll find that servers and bartenders are the most adimant supporters of tipping. They make a killing.

Making a killing is pushing it unless you're working at a high end place.

I really wonder how many HN people have ever worked in a waitstaff role. As much as you might hate it, tips keeps you just above minimum wage 95% of the time. Its not some money fountain like some people here seem to thing it is.

People who want tips of course want it because it gives them money on top of minimum wage, why the hell would you expect someone to sabotage their own income stream?

I worked at restaurants through college, ~20 years ago. initially chains (og, bj's, etc) and later on some nice hotel gigs (fanciest having a private dining room that went for $10k/night). While today I'm less certain on tips, at the time I was 100% in favor. It was clearly beneficial. Other people i knew in college were making $8/hr working as security guards, or folding clothes in a mall and i was walking out of the hotel with $200+ in cash after a 6 hour dinner shift, and $100+ for a 4 hour weekend breakfast. This was not barely above minimum wage.

If you want a real look at things, I'd suggest looking at servers discussing places that try to eliminate tipping. When tipping is discussed generally, it's often discussed like in this article - talking about how restaurants are only paying $2.13 an hour, how this or that customer didn't tipped or tipped almost nothing, how on this particular night they made almost nothing, etc.

But if you talk about getting rid of tipping and replacing it with a living age? Look at the comments from this Reddit discussion some years ago (so the numbers are even higher when you factor in inflation) discussing Joe's Crab Shack's interest in getting rid of tips[1]:

> But if you are doing good volume and the prices arent insanely cheap I cant see how youre only making $15 an hour. Are you in a poor section of town where people dont have much money? Do you get a lot of foreign tourists as clientele? I mean, $15 an hour I can make while asleep. But Im in Philly. Prices arent insane usually but they arent cheap. Plus its one of the best tipping cities in the country. Personally I wont take a shift if Im not confident Ill make at least $20 an hour. For me its not worth my time.

**

> This may or may not be close to the industry standard, but my last restaurant, I probably made somewhere around $25/hr (tips + wage). Restaurant before that was way more high volume, and even though we didn't really get paid an hourly wage, I would guess we made about $30/hr or so. On good nights and the bartenders? Probably even more.

**

> I was bored out of my mind all 6 hours of my shift tonight and made $14X, so call it $150, aka $25 an hour. Oh, and that's with a stiff on $120, and a $6 on $94

**

> Because serving tables isn't a job anyone would do for $7.75 an hour. It's not an easy job to excel at. I'll stay making my $25 an hour. Thanks.

**

> This is what people outside of the industry don't seem to get. Strong servers arn't going to stick around for anything less than $20 an hour.

[1] https://www.reddit.com/r/TalesFromYourServer/comments/4iuy2q...

The most professionalised elements are the ones who end up in high-end places, because they made a real career of it. Because of that, it's likely that they are also the ones most represented by unions and associations that might be consulted by policymakers. So when a policymaker puts forward an idea to improve their condition, and gets back an icy or ambivalent response (as well as a very negative one from employers, of course), he'll just shelve it very quickly.

I'd be surprised if that was true. Unions are good when there is an "we are all in it together", but with tipping a great server can make a lot more than a bad one, so all the great servers will defect from the union for more money. The bad ones want a union, but they are also the ones management should get rid of.

There are ways for unions to work around this, but the fact that some members see themselves as better than others in ways that are measurable make such unions weaker.

I worked at several restaurants, and not high end ones. on average, I probably made 25% over minimum wage. I had essentially zero marketable skills at the time, so my only alternatives actually paid minimum wage. I was a big fan of tipping.

One of my relatives worked as a bartender at a low end (but popular) place. She made a killing on cash tips.

What? I live in canada where tipping culture is not as present as in the US but still very widespread and it's universally known (at least before the lockdowns) that working in restaurants is pretty much the best job you can get as long as you don't work in the kitchen. I've had close friends work in a wide range of restaurants/hotels, and even those working in very normal restaurants still made way more than any other job they could get.

I like my student job since it's outdoors, and I have other revenue streams, but you don't get any tips. So my colleagues usually jump at the occasion to work in a restaurant whenever they can even if our workplace is extremely pleasant to work at.

They want to keep tips going because not because it allows them to barely reach the minimum but because it makes them way more money. Otherwise, they'd advocate for removing the different minimum wages.

I'm actually puzzled, and I'm wondering if you have ever worked in a waitstaff job because I've never ever met a waiter being against tips.

> As much as you might hate it, tips keeps you just above minimum wage 95% of the time.

At least here in California, I’m pretty sure there’s no special tipped minimum wage, so what you’re saying doesn’t apply.

I remember reading a pretty interesting book (Neo-Bohemia: Art and Commerce in the Postindustrial City) where the author found that a great proportion of the tip income among his study's subjects came from friends and associates who also worked in food and drink service--they were basically just passing cash back and forth.

I know there are some lucky bartenders that make a ton, but in my personal experience the people I know who have worked as servers and bartenders are not supporters. I'm actually finding it very difficult to find any surveys or research on this. I found one poll that shows tipped workers are in favor of a $15 minimum wage in addition to tips (obviously), but I can't find anything asking about a higher minimum wage without tips.

This is not true for all servers/bartenders or for all restaurants/bars. Yes, a Hooters girl can make a lot of money, as can servers working at high end steakhouses. Servers at Denny's, not so much.

You also get to take cash home after every shift.

Reminds me of the early pro slavery arguments about how people liked to be slaves working in the cotton fields

The good ones love the tip system. They get the most tips, and also tend to be the types of people recruited to the higher prices restaurants where higher tips are normal. They draw in repeat customers for their great service.

I used to know a waitress who was making just as much as her engineer husband. She looked good for 55, but 55 will never look good enough to draw in many high tips based on looks. (good lucks is a factor in service to a lot of people, but it didn't apply here)

The bad ones get bad tips and hate the system, but they should be fired anyway.

On the one hand I don't like having to figure tips. However a few times I've got bad service and at least I could do something about it.

I am most curious what percentage of the population dynamically adjusts their tip in any relation to the service. It has just become an additional tax. I give a standard 20%, more if it rounds to a nice whole dollar amount.

Even if I had bad service, I am still giving 20%. That's the social contract I am stuck with fulfilling.

Seconding this, unless the server kicks me in the groin they're getting 20%. That's the only way they're getting a livable wage and I'm sure not going to be the one to rob them of it.

I’m in CA, which doesn’t have a tipped minimum wage loophole, and the tipping culture keeps increasing what’s an expected tip, and more and more places expect you to tip, so it seems like it’s never going away. Just upwards.

But also, it’s not just restaurant owners that like it. A lot of tipped workers make out really well with tips and prefer it that way.

People who actually get tipped (servers, bartenders, baristas, caddies, drivers, delivery people) are by far the biggest proponents of keeping the current system in place.

Its weird who is "supposed" to get tips, too. Someone who brings you a plate is supposed to get 15% of the bill for doing their job; but an auto parts store clerk who chases down something weird for you over 2hrs of searching may well be forbidden to accept any gratuity, and possibly even disciplined for spending too much time on a small sale.

And the idea that the gratuity should be a percentage of the selling price of the goods is also weird. Someone makes more money if they did the same work but handed you more expensive food.

Real estate agents are the craziest example of this.

That's just a commission on a sale. It's the similar, but not the same. When I buy a house, there isn't an amount tacked on to pay the agent, that comes out of the sale price.*

Unless you're saying real estate agents are expecting tips now. That's messed up.

*Now, there are a bunch of other hidden fees and closing costs associated with a house to where you just need X% of the cost of a house in just to handle that bullshit.

It’s not twice as much work to sell a $2 million house as a $1 million house. Why does it cost twice as much in real estate agent fees?

For the buyer it also badly misaligns incentives. A buyer's real estate agent is financially better off finding the most expensive property their client is willing to buy rather than the cheapest property that suits the client's needs.

In this case, so?

Like I said, you're not being charged anything there. It comes out of the purchase price.

It's the agent who is listing the house at a price and sourcing the various inspectors and appraisers. They're putting in the work to sell your house at a price point.

So, if the agent can manage to move your house for $2 million rather than $1 million, why shouldn't they get a larger reward?

It's a different scenario from servers. Servers can't convince you to pay more for an item or for the business to sell that item for less. Real estate agents can.

This assumes that any house can go for $2 million if you just get a good enough agent. That’s clearly not the case. If there was some way to pay for excess returns, that would be a good argument. But flat commission percentage isn’t it.

> So, if the agent can manage to move your house for $2 million rather than $1 million, why shouldn't they get a larger reward?

Indeed, for the seller this makes sense and the agent's and seller's incentives are aligned. But there's a nasty externality created where real estate agents contribute to a constant upward pressure on housing prices. This eventually helps make housing unaffordable.

Selling agents are incentivized downward, because in reality, agents are incentivized to churn.

Agent commission is just shy of 6%. And that's for both the selling and buying agent. So they each get around 3%. For all the work you could be doing maximizing a house's selling price to get another $1k or $2k, you could be closing another house and getting another $10k.

Your question falsely assumes that a real estate agent's value is measured in a lumps of labor. If that were the case, we'd see lawyers being payed the same amount of money for reading the same book of law. The real estate fees are a negotiated cost in lieu of hourly payment.

If it were in lieu of an hourly payment it would vary from agent to agent (depending on expertise) rather than house to house (depending on price). This is how lawyers work. Some are $200 an hour and some are $500 an hour.

As a water drinker I always pad a few bucks onto my bill. Water is free on the bill, but I want the server to think water drinkers are worth a bit more in tips so bring them their refills.

> I am always baffled when I read about the tip culture in the states. I find it so belittling for workers. It seems to incentivize a mentality of "the customer is always right", with workers putting an extra effort to always smile and be nice in the hope for a fair tip.

There was an early-20th-century movement in the US to end tipping, for that reason. The thinking was that it created too much of a relationship of subservience rather than equals participating in commerce, to be compatible with American ideals of freedom.

You see this sometimes in older media, as in the "Tipping is Un-American" sign in the film The Petrified Forest.

> The thinking was that it created too much of a relationship of subservience rather than equals participating in commerce, to be compatible with American ideals of freedom.

That's my feelings about tipping. The custom feels very classist. Depending on tips creates a social divide between service industries and their customers.

I used to work for tips when I was growing up (~2010). My rate was about $15-20/hr which you just couldn't get as young teenager any other way. BUT, I had to force myself to be bubbly and make small talk or I'd make closer to $5-10/hr. The core service quality never changed--only how much I pleased/entertained my customers. I felt like the court fool or a beggar pleading for alms, so I eventually quit for a $10/hr job that I felt much better working throughout the rest of high school.

The tipping experience did teach me the value of being personable, but I don't think the incentives need to be so severe.

You have just talked me into tips. I want a server who will entertain me while I'm waiting. There is a line of course, don't do too much, but a bit of make me feel better about it is worth paying extra for. Service with a good bubbly personality is well worth the extra cost in my opinion.

This shows a disturbing lack of empathy.

> I want a server who will entertain me while I'm waiting.

Not everyone does--people are fickle. There's also a reason theaters don't use a pay-what-you-want model. Having your lively hood to depend on the whims of strangers is no way to operate.

> Having your lively hood to depend on the whims of strangers is no way to operate.

Your lively hood ALWAYS depends on the whims of strangers. It doesn't matter what you do, you depend on strangers to support you.

You're being disingenuous. The difference is how directly you depend on the whims on strangers and whether those whims include breaking a contract.

Personally I prefer to be around people who are friendly because they genuinely want to be rather than because I am paying them to fake it.

It's worse than even that. It's people essentially groveling or even degrading themselves so that maybe you'll voluntarily choose to pay them, desperately clinging onto the hope that you're not one of the people who simply never tips or only tips a pittance.

It's one thing if someone's being friendly and entertaining because they're being paid a salary or ticket price to do so - like a magician or tour guide or something. That's still artificial and potentially forced and stilted, but at least it's a reasonable, tit-for-tat kind of artificiality. With tipping it feels not only artificial but patronizing, condescending, and servile. You're at the mercy of the capriciousness and cruelty of customers. Or, alternatively, in some cases inadvertently thrusting them into a position of guilt and obligation and pity.

It's not that bad since the employee probably knows what they were signing up for before taking the job, and some can make a lot of money from it, but, overall, the whole thing just feels... weird.

>BUT, I had to force myself to be bubbly and make small talk or I'd make closer to $5-10/hr. The core service quality never changed--only how much I pleased/entertained my customers.

I don't think this is something you can fault tips for. If anything it suggests that tips are working as intended, presumably without tips your employer would bake such expectations into your customer facing role anyway?

What you're talking about is scaling pay with customer satisfaction correct?

The issue with depending on customer satisfaction is that human beings only have agency over themselves. No matter how polite and courteous an employee is they cannot force a customer to be satisfied or that said satisfaction should result in a nice tip.

There are too many variables outside of your control such as the individual customers, shift schedule, volume of customers, the literal weather, political mood, etc. Some days I would go home with like $30 for the day's work despite behaving the same as my high earning days. You are not actually getting paid for your performance directly.

On average you may make more, but if you're in a low income position you are not equipped to ride out the variance. You are being exposed to so much uncertainty and raw humanity that it affects your mentality. It's much harder to shake off making $60 for an entire weekend of work because customers were grumpy when you only have $250 in your bank account and your car payment is due. As an equation it may look equitable, but that equation is not reality.

Businesses that support the tipping system are leaving their employees out in the proverbial wind. Instead business owners should assume the risk and actually manage their employees in an equitable fashion.

It's like a hack for the owner to show prices at a <insert tip rate> discount to the meal. If everyone has a shared expectation that the tip is a certain rate, then that's the pay. Why not remove tipping and add that cost to the menu? But then maybe you wouldn't be as competitive?

I'm sure there are people who can make good money on tips. That's more like a commission on sales. In that sense, you're taking the risk of a higher upside by working in this industry. But the way it actually works, is that most will pay the expected tip. some won't pay any tip at all, some will give a bigger tip, and the worker is left to absorb the variance on a low pay gig.

The industry should remove the downside and allow the upside. You get paid X. There is no tipping system. But the customer can still tip if they like.

I don't work in the industry. Maybe I'm way off. I hope the employment picture changes in the future so that people will appreciate face to face service. I can't reach Facebook or Google for support and I'll cry about my loss, but I'll feel entitled to rage on my server for my $10 meal? Doesn't seem sustainable.

Tipping is a contentious topic.

Perhaps counterintuitively, wait staff generally prefers a tipping model over fixed pay when given the choice. Tipping is more variable, but it can pay surprisingly well, especially for staff who are good at their job. It’s rare to find a no-tip restaurant that can match the earning potential of what a good server can make with tipping. It’s theoretically possible, of course, but in practice it doesn’t seem to work out in favor of fixed pay.

Servers like it because they can abuse information asymmetry to get more money.

If I sit down at a restaurant, I don't know if the server has had a good week, a bad week, an average week, or what. So, not knowing that, if I'm sympathetic to their position, I'm inclined to tip well. Add on to that the constant pressure of tips upward. It's gone from being 10% on average to 20% on average in my lifetime. And also flat rates on certain services.

I agree and in that regard I've always found EU countries much more humane, in the sense they don't have to take shit from a bad customer and smile because of the weight of the tip in their salary.

Yeah, instead the customer has to take it from bad servers with nothing they can do about it.

Personally, I've found service better in non-tipping countries than in tipping countries. My guess is it's because in most non-tipping countries, waiters spend less time trying to pretend to be friends with customers at every table and more time just doing their job. Having to wait for service because a waiter is spending a lot of time buttering up another table with inane chit-chat is annoying, especially when I have to pay extra for it.

Doubtful, a restaurant with bad service will go kaput. Restaurant owners do care about this kind of thing. It's called the hospitality industry for a reason.

You can:

- Talk back to the server (hopefully to de-escalate rather than escalate) - Ask to talk to their manager - Not come back - Leave a review

That's hardly "nothing"

And god help you if you don't tip. Searching the web reveals horror stories of food tampering and deliberately bad service. Imagine if you're from a culture where tipping doesn't exist and you simply don't know that you're supposed to leave some extra percentage for the employee.

> It seems to incentivize a mentality of "the customer is always right", with workers putting an extra effort to always smile and be nice in the hope for a fair tip.

That's exactly the point. It's meant to be an incentive to put in extra effort, and in my experience it works. Everywhere I've been that doesn't have restaurant tipping, for instance, has had notably worse service on average.

Where it becomes a problem is that the tips are now treated as the expected wage, rather than something extra. Working entirely for something that is intended as an incentive is a bit perverse and demeaning. In the end, I think for this reason tipping ought to be done away with, but it does have its upsides.

Seattle tried this recently. It didn't go well. Servers pointed out to their customers that they personally didn't receive the "service charge" that was mandated added to the bill. So customers felt obligated to add a tip on top of the service charge. I haven't been a restaurant in Seattle in a couple of months, but I got the impression the experiment was largely abandoned.

Ironically some expensive restaurants in the states add “gratuity” (like a service charge) to the bill and do not rely on tipping. This ensures their hard to recruit staff (sommeliers, skilled wait staff, etc…) can be paid enough to keep working there.

I've only ever seen this policy applied to large parties, and it's below the standard tip percentage anyway.

Go to cities like Seattle or San Francisco. You’ll frequently find places with an 18% or 20% service charge regardless of party size or even a no tips policy.

I've never seen it below the standard tip percentage. I've frequently seen it above the standard tip percentage.

Supposedly its origin is tied in with race relations. I only vaguely remember the historical explanation and I'm too tired to look into it right now. Anyway, I agree that the phenomenon is pretty degrading.

This is much more about low wages than it is about tipping

Restaurants can really barely afford to stay open in my (small) region, frankly they are seen as a service to a town not a net extractor. I know the finances behind my locals and can tell you they would not be able to stay open if workers were not also compensated via tips, and workers would not be there without the requisite pay. Tips end up being the difference between having a restaurant or not.

I'm not sure I understand: me as a customer, whether I pay the menu + 20% tip, or I pay a menu 20% more expensive, I end up exactly the same. So why is for the restaurant owner better with tipping, instead of raising the prices 20% and putting an entry sign "no tipping needed here, we pay our workers right"? Even call the restaurant "no tipping place" if they wish. Can someone with experience in restaurant business explain this?

When did tipping become 20%? The majority of my life it was 15%. Then at a certain point I started hearing 18%. Now it is 20%? Who is behind this?

In my experience:

- Older generations tip maximum 15%, and decide what to tip based on service quality

- Millennials tip a flat 20%, regardless of service quality

- People who worked in the service industry will tip 30%, because they know what it's like.

Software nudges (e.g. Square). This scales social behavior very quickly.

I'm not from the US so I didn't really have an idea what to take, so I pulled a figure out of my :) sorry for the confusion!

Social norms.

But, yes, it's creeped up from 15% before tax to 18-20% on the total bill in general.

Yes, but social norms don’t come out of nowhere. It was 15% for a long time, then it went to 18% (why 18? I can see the jump to 20% as people wanting to do easier math than 18%). Someone somewhere had to have created this new social norm.

> Someone somewhere had to have created this new social norm.

Someone didn't need to do anything and as far as I know, no individual decreed anything. (Although possibly guidebook and etiquette writes have helped contribute.)

It makes some sense with inflation and probably lack of increase in wait staff salaries. Restaurants often show recommended tips and even mandatory service adders for large groups. But, for the most part, it's probably been mostly organic.

Menu: $5 burger

Customer 1 (richy rich): $5 + $2 tip

Customer 2 (workin man): $5 + $1 tip

Customer 3 (poor man): $5 no tip

Total: $18

Menu: $6 burger

Customer 1 (richy rich): $6 + $1 tip

Total: $7

You've reduced your customer based on true affordability and perceived affordability. This doesn't consider the margin on selling a single burger but generally you need to push product rather than sell master pieces.

Your contrived hypothetical scenario is not proof of your conjecture.

Because there are plenty of places that don't work with tips that do fine. Hell, some of our least expensive options operate in a tip-free environment. And no restaurant where tipping is expected is selling for the same price as fast food places in the first place. So it's not the scenario where you're looking at two options that seem equally priced, but one has the hidden tip tax on it. No, you're looking at two options where one is just more expensive and you have to tip.

And why are restaurants special in this regard? Why does no other sector have to operate on this model, where a customer has to directly pay a businesses employees? And why only in the U.S.? How did the rest of the world figure this one out but we can't seem to shake it?

Tipping is stupid and is anti-ethical to actual customer service as it pits staff against the customer and creates resentment in both directions.

If you look into the financializations of any Restaurant you won't necessarily be able to generalize to all Restaurants. McDonald's empire is built on real estate not burgers anymore for instance.

Anyway I was speaking specifically on my own regions circumstances, we don't have fastfood within a 1hr round-trip. That 1hr adds up to a few bucks gas and time I don't have. There is no 2 options.

Extrapolating from singular circumstances is worse than generalizing from the most common.

Seems like you'd still have two customers (The burger is still in 'workin man''s budget), at 2/3 the food cost.

You are right, but I removed him to make the point that this is partly based on perception of the person doing the buying.

Workin man this week is poor man next week and then some weeks he's richy rich. Do you want to capture all forms of this guy?

None of this is rigorous of course but ya know we don't have a town full of 1 guy with a single budget. We have a town full of people with various and changing budgets, what kind of mechanism can be put into place to keep base finances workable in tight times while extracting more in good times?

> what kind of mechanism can be put into place to keep base finances workable in tight times while extracting more in good times?

Surely there must be a way because every other business seems to manage, and so do restaurants in 50%+ of the world.

Based on many of the other comments here it would look more like:

Customer 1 (richy rich): $5 + no tip

Customer 2 (workin man): $5 + $2 tip

Customer 3 (poor man): $5 + $1 tip

The tip amount seems to depend more on empathy/demographics than the amount of money one has to spend.

When we look at the issues that are behind the thin margins that restaurants operate on, i.e. rent and cost of goods, then it seems that the labor is the only variable that is under the operators control. So instead of framing the argument of whether we should have to directly pay those wages/tips the discussion needs to shift.

Why are commercial rents so high? Because vacancies are preferred over "market rate" rents. https://news.ycombinator.com/item?id=27939860

Not saying this is the case, but when a business shuts down the property it operated in stays in place. The rent will continue to rise to meet the financial demands of the property owner. So the next fool comes in and tries to run a business that is doomed. The young workers rents are subsidized by parents. Unless a restaurant owner is working in the trenches then they will NEVER be able to run the business effectively.

The banks get richer either way, but at a certain point there will not be any restaurants left as the societal contracts erode.

Would customers be willing to pay marginally higher menu prices if tips were explicitly not allowed? I assume there must be research on this.

Changing menu prices is probably a bit less elastic than letting people be flexible with their spending. I'm more likely to buy the burger that I can afford and stinge on the tip if I'm tight and come back next week and guilt tip when I'm full. Raise the price across the board and I'm not coming the tight week.

Why should wait staff salary be the thing that gets sacrificed to economic downfall? They have much less control over what kind of food the restaurants sell and for what price.

It makes more sense for those who have more decision power to eat the consequences. They can make cheaper burgers, lower salaries for everyone rather then single profession, change what they sell.

The wait staff can only decide whether they work or not.

Tipping as price discrimination, with positive empathy from a human face being the upsell.

You can pay either $8 or $10 for the same meal. If you pay $8 you feel bad, if you pay $10 you feel good. Thereby the restaurant takes in the full $10 from people who can afford it and/or aren't psychopaths, but still makes the sale at $8 for anyone else.

So I think a different angle to look at something like this is. If everyone in an area gets paid a living wage, and the people who work at a business can actually afford to be customers of that business, it actually creates more customers and businesses overall do better.

I forget the name of who put this idea forward, but businesses that barely break even when paying the absolute minimums, don't necessarily do worse if labor costs go up universally in an area, and everyone can begin to afford to use the services.

This is kind of a bullshit excuse.

Most restaurants can barely afford to stay open because most restaurants are run by people who have no business running a business. Hell, let's be honest, most businesses are run by people who have no business running a business. Most people don't really want to run a business, they want to do something else, but also get paid to do it.

There are plenty of small restaurants around the world that get by fine without tips and manage to pay their employees. But for some reason, the U.S. thinks this is somehow impossible.

Tipping is stupid. But since servers can make more money than on a set wage, they don't mind that the restaurant owners are essentially pitting their employees against their customers. You know what would increase the overall level of service? If the restaurant paid a decent wage to their employees and then removed the obligation from the customer to pay the restaurant's employees.

It always blows my mind when business owners complain “oh labour is too expensive, oh I can’t stay in business”

Yes, that’s how capitalism, markets and commerce work. It has good parts and bad parts. If you don’t want the government to get involved when it’s going well, why get them involved when it isn’t? Greed and hypocrisy, that’s why.

If the region can't afford a restaurant without having external taxpayers subsidize the restaurant (e.g. via social safety net transfer payments), perhaps it shouldn't have one. Every business doesn't need to scale down or up to fill every niche.

Genuinely curious: what if your local restaurants raise prices too?

Yet somehow the service in the US is 10x better than in Europe.

As a redcoat in enemy territory I generally agree, although the golden retriever-esque fake enthusiasm in the states can be a little skeezy, when it feels like they're forced to act like that because the wage without tips is so low

'Yes, everything is still fine' - you don't need to check every 5 minutes

I usually prefer the service in Europe (if it’s possible to generalize the continent like that). Americans waiters constantly intrude. I’d rather they stay away as much as possible.

This has not been my experience.

It is the employees who like tipping. You are falling for a common misconception.

The Front of House employees, but yes.