Regulation

The War on Tipping

Activists want to "protect" restaurant workers right out of their jobs.

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Union protestors and celebrity advocates have decided that waiters' tips aren't big enough.

They are upset that in 43 states, tipped workers can be paid a lower minimum wage, as low as $2.13 an hour.

Not fair! say celebrities like Jane Fonda, who recorded commercials saying, "That's barely enough to buy a large cup of coffee!"

As usual, those who want the government to decide that workers must be paid more insist that "women and minorities" are hurt by the market.

But waitress Alcieli Felipe is a minority and a woman. She says the celebrities and politicians should butt out.

Thanks to tips, Felipe says in my new internet video, she makes "$25 an hour. By the end of the year, $48,000 to $50,000."

She understands that if government raises the minimum, "It'll be harder for restaurants to keep the same amount of employees… (T)he busboy will be cut."

She's right.

Minimum wage laws don't just raise salaries without cost. If they did, why not set the minimum at $100 an hour?

Every time a minimum is raised, somebody loses something. "In the (San Francisco) Bay Area, you've got a 14 percent increase in restaurant closures for each dollar increase in the minimum wage," says Michael Saltsman of the Employment Policy Institute.

Activists are unmoved. "The problem with tips is that they're very inconsistent," University of Buffalo law professor Nicole Hallett told me. Hallett is one of those activist professors who gets students to join her in "social justice" protests.

"I simply don't believe that increasing the minimum wage for tipped workers will lead to a reduction in the restaurant workforce," she said. "Studies have shown that restaurants have been able to bear those costs."

I pointed out that last time New York raised its minimum, the city lost 270 restaurants.

"Restaurants always close," she replied.

"Restaurants don't always close," responds Saltsman. "Yeah, there's turnover in the industry, but what we're doing now to an industry where there's low profit margins, jacking up restaurant closures… Something's not right."

The media rarely focus on those closings. We can't interview people who are never hired; we don't know who they are. Instead, activists lead reporters to workers who talk about struggling to pay rent.

"Forty-six percent of tipped workers nationwide rely on public benefits" like food stamps, Hallett told me.

I pointed out that many tipped workers are eligible for benefits because they don't report tip income to the government.

She didn't dispute that. "Many restaurants and restaurant workers don't report 100 percent of their income," she acknowledged.

Hallett and other higher-minimum activists also claim that tipping should be discouraged because it causes sexual harassment. Sarah Jessica Parker, Reese Witherspoon, Natalie Portman, Jane Fonda, and 12 other actresses wrote a letter urging New York's governor to increase the minimum wage, claiming that "relying on tips creates a more permissive work environment where customers feel entitled to abuse women in exchange for 'service.'"

Tipping causes customers to abuse women?

Saltsman says research using federal data doesn't support that. "Data shows some of the states that have gone down this path that the activists want, changing their tipping system, actually have a higher rate of sexual harassment."

When I pointed that out to Hallett, she replied, "Sexual harassment is complicated; no single policy is going to eliminate that problem."

So raising the minimum won't reduce sexual harassment but will raise prices, will force some restaurants to either fire workers or close, and will reduce tip income.

This is supposed to help restaurant workers?

Many object to being "helped." When Maine voters increased the minimum, so many restaurant workers protested that the politicians reversed the decision.

Alcieli Felipe doesn't want the government "helping" her either: "We are fine. Who are those people? Have they worked in the restaurant industry?"

Most haven't.

I'm a free market guy. I wonder, "Why should there be any minimum? Why can't the employer and employee make whatever deal they want?"

"That policy has been rejected," Hallett told me, "rejected for the last hundred years. We're not in that world."

Unfortunately, we aren't. We live in a world where activists and government "protect" workers right out of their jobs.

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  1. Just the tip!

  2. The Parable of the Vineyard Workers (Matthew 20):

    Friend, I do thee no wrong: didst not thou agree with me for a penny? Take that thine is, and go thy way: I will give unto this last, even as unto thee. Is it not lawful for me to do what I will with mine own?

    1. “Some restrictions apply. Void where prohibited by law.”

  3. I got myself through my last couple years of college working as a waiter. I was bringing home at least $400 a week, cash, working only two or three days.

    Being paid with tips weeds out the shitty servers pretty quick. The result of this policy will be good servers and shitty servers being paid the same.

    In the end the customers will suffer when the incentive to give good service is removed. Eating out will be like going to the DMV.

    1. I think you have hit on the unspoken intended consequences. Being rewarded for good service, and not for bad has unequal results, and that offends a certain ideological bent.

      1. Equality is the lowest common denominator.

    2. In the end the customers will suffer when the incentive to give good service is removed. Eating out will be like going to the DMV.

      Which is the real reason the restaurants close, not so much the increase on costs alone.
      The costs go up and the service goes down. End of the business. Less revenue to the state. Fewer jobs. Lose, lose.
      The progressive paradise.

      1. No, because state-owned “restaurants” will never close, the staff will never be fired, and the “customers” will never be served.

        But think of all the opportunities for harassment sensitivity training and the myriad of bathroom choices!

        1. harassment sensitivity training

          “Train for the career of the future!”

        2. Hey! Just like the DMV!

    3. “In the end the customers will suffer when the incentive to give good service is removed. Eating out will be like going to the DMV.”

      Exactly my impression after visiting New Zealand, where tipping is rare and fine dining involves Applebees’ quality service. In tourist areas, a lot of the help is American, so it’s obviously incentive-driven more than cultural.

    4. Yup, some ppl may be more naturally skilled than others, and that’s not fair. So we must handicap some – in the name of fairness.

      1. Harrison Bergeron lived this.

        You know, that story and athe Lottery used to be taught in school. I read The Lottery as a sixth-grader. It’s a real shame kids aren’t being exposed to these. Not surprising, but regrettable.

    5. I prefer businesses that do not have tipping. A manager should bother to vet and monitor employees. He should know that good employees are difficult to replace and provide sufficient incentives to keep those good employees. We should keep tipping legal, none the less. I do see the argument for requiring all industries to obey the same minimum wage laws to adhere to equality before the law.

      I also feel that tipping and reliance on tips taint a relationship by making the employee feel constantly insecure about his economic future. It’s better to have a predicable pay rate and even better to have predictable hours and salary. That’s one reason I signed up to send monthly stipends to my two favorite performing artists.

      1. The thing is, it should not be a matter of law. Why should the government decide the price at which I am allowed to sell my labor?

        1. Because otherwise you might be trafficked with child slaves.

      2. I also feel that tipping and reliance on tips taint a relationship by making the employee feel constantly insecure about his economic future.

        That’s funny, because I’ve been a waiter and I never felt insecure about my economic future. I didn’t know exactly how much money I would make, but I knew I would make money.

        It’s better to have a predicable pay rate and even better to have predictable hours and salary.

        That is a matter of personal preference that should not be forced onto others.

        1. Exactly. You can go to a temp agency and work a job for a consistent wage if you like. I bartended for years and could estimate over 5-6 shifts what I’d make in a given week. Most of these people who complain about tipping either never worked in a restaurant, or worked there a couple months and quit.

    6. Not true. In general even bad servers get tips. In most restaurant experiences there is no “good” services or “bad” service. You give your order and they bring you food. Not so complicated. So why the heck the tip? When you get “bad” service it is often because they are assigned too many tables, there is a rush, or the cooks screw things up. Unless you are Daddy McMoney you are not dinning at fancy restaurants where perhaps, there is good and bad service. I suppose you can be offended that your server does not know what lake the escargot was harvested from or the name of the farmer who grew your organic arugula.

      1. I always made more money than any of my coworkers. Why? Because I would up-sell. “Sure you can get a steak dinner, but for only five bucks more you can get a steak and lobster.” I would keep their drinks full. I would offer appetizers and dessert. I would check in to make sure everything was good, but not be bothersome. I would be prompt with the check in order to flip the table faster. I could handle a section with more tables. Though one thing I never got the hang of was large groups. I’d make bank of flipping a large section of small tables.

        So I always made the most money of anyone on the shift. The people who didn’t do those things made tips, but they made a lot less money because their sales were significantly smaller.

        That’s the difference between a good server and a shitty server.

      2. “Not true. In general even bad servers get tips.”

        Yeah, about 2/3 of what the good ones get.

    7. Ah yes, there would be no incentive for employees to do a good job if the customers don’t decide how much they make. This is why restaurants and valet services are the only well-run businesses.

  4. Here’s a tip: you’re late with the “morning roundup”.

  5. The restaurant industry – hell, the entire hospitality industry – has been so wrapped in bureaucratic steel wool, for so long, that the market is distorted beyond all recognition. You know, throw in the suppliers while we’re at it. Food is both subsidized and price floored repeatedly before it ever touches a plate.

    For example, we still have people who cook several times a week for no reason other than food is a survival requirement, without which they will die. Some folks hate to cook. Some folks love to cook. We have no way to bring these two groups peaceably together to satisfy everyone’s natural inclinations unless it happens in a proper inspected building in the proper section of town, with the proper inspected equipment and certified employees, and exactly the right number and composition of sinks in exactly the right fung shui arrangement, all sorted and assured by an army of bureaucrats who face no penalty for failure. Anything less would cause the animal spirits to feel anger and surely kill us all.

    As opposed to everyone who doesn’t like to cook, hasn’t the time, or doesn’t fucking feel like it, dropping off groceries somewhere, filling out a weekly menu form, and picking up supper on the way home from work in exchange for the labor cost of preparation.

    Who knows what a free market would come up with. All sorts of things, probably not much of it resembling what we have now.

    1. On the radio the other day some liberals were lamenting about how my state’s governor has been cutting regulation. It was the typical refrain of “He hates the environment and opposes consumer protections.

      That’s what these regulations are all about. Consumer protection. So if you oppose requiring a separate building with all the required equipment, then you oppose consumer protection. Because without those things, everything prepared in the kitchen (used to feed a family that never got food poisoning) will be poisoned. Or something.

      The road to hell is paved with good intentions.

      1. “The road to hell is paved with good intentions.”

        Pity it won’t be repaved with bureaucrats anytime soon.

      2. I could tell you stories about restaurant cleanliness which would curl folks’ hair. All passed inspection. Anyone trusting the health department is taking their life in their own hands. They might be doing so without a health department in existence, except then they would at least realize it.

        1. I could tell you stories about restaurant cleanliness which would curl folks’ hair.

          Same here. One place grossed me out so much that I quit. Whenever you walked into an unoccupied room and flipped on the light, the walls went from dark to light in about a second. Roaches.

          Another place had a swamp in one of the walk in coolers. It was in the seafood section. The smell…

          Then there was the chef who lost his bandaid in the clam chowder.

          I could go on.

          Yet they all passed.

          1. Yep. It’s that ubiquitous. And no one knows – because health department.

      3. For consumer protection I think we need to pass a law requiring all regulators to constantly wear an air-tight plastic bag over their heads.

  6. This whole argument is a joke. Tipping at the Olive Garden? For what? Did your server conjure up a smile and some silly small talk? Oooh, give them a tip because they are soooo nice. Folks, they are stenographers who bring you food. Such is the experience of 90% of restaurant goers.

    Okay okay, for the wealthy out there it may be nice to be able to talk about how your Kale steak is fair trade and your server can give you the an excellent description of the fruity undertones to your organic, sulphur-free wine. In that case, throw them a tip. But for most of us, tipping is just a tax we self-impose because we know the servers need it because they get paid crap. We irrationally do not care about the cooks. Nor do we care that the person at McDonalds who takes your order, brings you your food and cleans your table does not get a tip. Funny how that works. I guess we all like to pretend we are John Effing Rockefeller and that the server chatting you up at the Olive Garden really cares about you and isn’t phoning it in.

    1. Spoken like someone who has never worked in hospitality.

      1. I was going to say exactly that. I’m sure he’s a fun guy to have a night on the town with…

        1. He should change his name to Mr. Pink.

    2. I agree with this take wholeheartedly. Tipping is a garbage practice and deserves to die.

      1. brady949|8.1.18 @ 2:18PM|#
        “I agree with this take wholeheartedly. Tipping is a garbage practice and deserves to die.”

        Lefty assertions are not arguments, just so you know.

      2. you would see no price benefit from this, likely a price increase. But at least you would ‘know’ what this increased rate was, which makes no sense at all, but that’s about the best you can say for it..

        also your service would decline. Nobody would have any incentive to give a rats ass about your problems. The lines and waits you encounter would become much worse, after all why should the staff care about flipping tables tables? It creates more work with no pay off. In fact from a workers point of view, having less customers would be better, they would end up with the same amount no matter if the place was packed or they only served 4 tables the entire night.

        Thats when you say they would ‘care’ because otherwise they would not have a job. But if the entire industry ran the same way, there would be no where to turn. And 95% of employees don’t think that far ahead and just don’t give a shit. Their place of employment could burn down and they would be happy to have a couple days off. There are endless restaurants to work at, they won’t have any reason to care about any particular one without the incentive to..

  7. “Many restaurants and restaurant workers don’t report 100 percent of their income,”

    I think that is the real reason behind this. Politicians know that a lot of money is changing hands in the hospitality industry and they are not getting their cut.

    1. I don’t think so. This has been going on for decades. Why would the politicians suddenly care now?

      I think it’s unions and community organizers. People who think unequal outcomes are not fair, and that the job of government is to make things fair.

      Some servers are better than others. As I explained here.

      1. Politicians suddenly care now for the same reason they suddenly care about how many Pepsi’s a person drinks. That reason being that many state and local governments are teetering at the edge of chapter 9 bankruptcy.

        I agree about the unions and community organizers though. Those people hate meritocracy.

  8. “Keep the tip.”

    Punch line to disgusting, sexist, ableist joke.

  9. Wait. That isn’t how the tip credit works. Restaurants are still required to ensure that their workers earn minimum wage, after tips.

    So, if they raise the minimum wage, servers still get the benefit.

    Raising the minimum to $15 plus tips is ridiculous. If the town is $15 then servers should be subject to that same floor but inclusive of tips.

  10. “The problem with tips is that they’re very inconsistent,” University of Buffalo law professor Nicole Hallett told me.

    True. On average, good service gets good tips, and mediocre service gets mediocre tips. This evil lack of equity unfairly victimizes motivationally-challenged-Americans (and more importantly, immigrants), and it will not be tolerated!

    For The People!

  11. Bastiat or what?

    The left thrives on virtue signalling.
    Virtue signalling trumps the not seen.

    1. “Bastiat or what?
      The left thrives on virtue signalling.
      Virtue signalling trumps the not seen.”

      And revealed preferences prove lefties to be full of shit most often.
      The number of my oh, so, lib SF neighbors who support rent control and then have gotten permission to convert their properties back to single-family occupancy or condos is an education in the bullshit quotient of SF lefties.
      The signaling remains; the activity does also.

  12. I’m not for raising the minimum wage, but if you let me sexually harass Natalie Portman for a while, I promise I at least won’t mock those who are as mercilessly.

  13. Haven’t we gotten ourselves to the point where listening to the blathering of the court jester class are taken for what they are worth? Nothing.

  14. I’m already against tipping, but that’s just because I’m *cheap*, and I don’t really want to pay more than the price it says on the menu. The government has no business in determining employee wages of any kind, restaurants or not, nor in deciding if tipping should be allowed or prohibited.

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