On holidays it really makes me think should I have frequented some other place where they paid staff better... Instead of seemingly exploiting them and their work...
Since those days, even though I have family and friends to have holiday meals with, I've made it a point every year to have a small meal at the diner even if it's just coffee and a desert. And since I'm doing much better these days than a poor broke college student, I do it because I want to leave a large tip for the staff. No big Oprah style "you get at tip and you get a tip" performance or videos for youtube, just a simple card and big tip expressing my gratitude for them being there those years ago for past me, and for being around today for all the people who don't have anywhere to go still.
Whether they consider themselves exploited or not. Whether they're there because they need the work and the money, or (like I often did when I worked retail) they volunteered for the holiday shift because they had no where to be that day either. In either case, I was and remain grateful and the holidays are the one time a year I truly enjoy giving a tip.
Even if they were paying their employees a full wage and not as tipped servers, I would still be tipping in this manner. It's an expression of gratitude to the people who – whether by choice or by necessity – make it so that even someone with no place to go on a holiday can have some place to go.
If that doesn't answer the question you were asking, as I said, I wasn't 100% clear on it so my apologies.
On employee side, well there is usually not option to forgo work as money is needed for survival... So their only option is to take work that is less than they might think they are worth. But this often results in poor retention as they will move for better options when possible.
Is this somehow bad? Everything is only "worth" as what people are willing to pay for it, and labor isn't any different.
Instead, rather than see some businesses experiment with eliminating tips, I see a lot of businesses that haven't historically had tips start to request them. Worse, none of them as far as I can tell have lowered prices: it's just a new cost on top, much like bullshit fees tacked on by other industries, only with a new shame component built-in if you dare express frustration at having to pay it.
It's greedy exploitation stemming from the knowledge that the "free market" rarely exerts corrective pressures as well as advertised. The invisible hand is largely invisible because it isn't there.
[1] https://www.thrillist.com/eat/nation/american-restaurants-do... https://www.sfchronicle.com/food/restaurants/article/tipless...
In fact, now that I think about it, since tips are a percentage of the bill, I wonder if tipped wages keep place with inflation better than retail?
Not to say that this is a great system overall, but I also find the mindset that's worried about tipped wages to be odd, because like I said, if you think they should get paid more that's entirely in your control. No one needs to wait for the boss to decide to hand out raises or make market adjustments. And most of my friends who worked tipped jobs weren't bothered by the tips per-se as they were with the times when work was slow. Sure they griped about stingy tippers, but none of them ever had a top complaint of "man I wish I could just make $8/ hour flat rate instead of getting tips"