Tips should not exist.
Having to replace such performance/luck based incentives with fixed salaries would make a lot of business unviable, and restrict growth and innovation.
Furthermore, the current workforce in places where such compensation is common will often have self selected for the kind of people who prefer this model (due to the potential upside, excitement, feeling of purpose, etc) over the safety of a fixed salary.
So banning tipping in such markets tend to have a similar reaction as would forcing such incentive models on markets where people are used to a fixed salary.
And yet the tiny check in lady in Tokyo airport came from behind her desk to lift my suitcase onto the scales.
Peformance bonuses paid by the employer when you reach targets set by them is somewhat common and could be used in hospitality too.
However, the majority of jobs do not have such performance incentives other than keeping your job if you keep up your end of the bargain, and possibly getting promoted to a higher role if you show certain skills.
The hospitality sector does not have to differ.
In fact, I'm not sure I know of a single global top 100 company (by market cap) that is a European tech company founded in the past 40 years.
Compensation models is almost certainly part of the reason, in addition to taxation, regulations, culture, etc.
What you could argue is that because these companies are so successful, they can now offer disproportionately large compensation packages including stock options which draw talent from the rest of the world to keep them large. This in turn fuels the startup economy as investors dream of having a big share of the next big thing.
I don't think it makes sense as a justification for why these companies grew so big and attracted so much money, causing a gap in startup environments. It would at most explain why they stay so big.
From the 100 most valuable companies on Earth, there are maybe 20-30 US (rough guess) tech companies that have been started in the the past 40 years, and several of them in the past 20.
And approximately 0 European ones.
And while this isn't PROOF of causation, it surely increases the posterior probability of causation, regarles of what your prior was before adding this evidence.
Like many places in the US, or in popular vacation resorts even in Europe.
On the other hand, systems based on fixed salaries favors more established businesses (like McDonalds) or, at the opposite end of the spectrum, family run businesses where family member salaries are set more to minimize overall tax burden more than to compensate performance.
Just like French small/-ish restaurants may be an excellent solution in the French countryside, the US model can work well in Miami or some steakhouse on Route 66.
So this is to allow new businesses to start easy by not having to pay their employees if there isn't business? Imagine if other industries picked up on that, stopped paying living wages and instead made it every employees job to attract business and satisfy customers themselves in order to be able to pay rent.
Starting any business implies up front investments and a gamble on its future profitability. In any other industry, if you lacked the cash to pay salary you'd have to offer things like equity to share both risk and gain with the first few employees. Using tips mean you only share a high risk of them not being able to make a living off this new unproven business, without any benefit other than "if everything goes well and we're lucky, you'll be able to pay rent!".
If we wanted performance-driven salary, then a living base wage and a pre-agreed performance bonus with no concept of tip would be more appropriate.
Recently, there was a lot of focus on tips due to how Square/Cube/whatever has affected tipping, and it appears that the consensus in the US is not in favor of tipping.
Do you think the 18-year-old getting a job serving burgers and beers at the recently started sports bar cares about the equity? Most of them would much rather receive $200 in tips on a good night over POSSIBLY having some stake in that bar 10 years down the road.
(The one exception I can see, is if the business is owned by her parents.)
An equity as a model is suited to another type of demographic working in a different kind of business.
Not the tech sector or startups in particular, but I think that the incentive culture in general (e.g. stock options for management, bonuses in banking) has been very harmful and it would be great to get rid of it. It encourages short termism, and manipulating the numbers. Goodhart's/Campbell's law (not sure which is more accurate here).
I could ban it, I would.
> I could ban it, I would.
But THIS I really have a problem with. Outright banning practices you don't like is something I would see as an authoritarian streak.
Kind of like how authoritarian religious people want to ban gay sex or authoritarian capitalists want to ban labor unions.
Taxes are those costs that are slapped on the price to cover payments to the government.
100% Agree that people should just be paid more. But it's not that simple ...
Raising wages has an inflationary effect on the prices in the restaurants/bars. And the people who suffer from inflation are the minimum wage earners who spend proportionally more of their disposable income on essentials like groceries.
I worked as a waiter/bartender for 3 years in college and the wages were terrible! But I always made an effort and customers gave me tips. Saved those tips to buy my first iMac which I used to learn higher-paying skills.
Having been a service industry worker and now in a different income bracket I always tip for good service. Without tips many people in the service sector could not get by.
Again, I don't like this system; and would welcome a viable alternative!
If a government mandates a higher wage or if 90% of a society voluntarily contributes tips, the effect is the same.
At the end of the day, the customer is likely paying an increased amount for a service being rendered. Except a mandatory wage increase may have the business reduce their margins while a tip puts the pressure directly on patrons.
I did tipped service work. It’s time to discourage general adoption.
Is good service only available to those who tip?
Why are there so many hidden costs in American pricing? Why can't everything be upfront and honest and transparent?
Whose responsibility is the welfare of the staff?
Why do only waitstaff get the tips when the less-visible staff also contribute to good service?
I don't think that's necessarily true. In Japan tipping is a faux pas, and in fact restaurants will often return or refuse to accept them, yet the service sector is massive and the quality of service tends to be extraordinary. Much of Europe is similar, especially in eastern and southern parts. In China tipping is just not done...
How is it that they all get by, but the US service sector can't?
But using Japan as an example for this is like a red herring. The US/UK is not Japan. Just lookup "Cheating culture in Japan": https://www.reddit.com/r/japan/comments/5cnmy8/cheating_cult... would that work in US/UK? ¯\_(ツ)_/¯ (hint: no!)
lol, no. They're paid less, on average.
https://www.erieri.com/salary/job/waiter-waitress/japan
https://www.talent.com/salary?job=waiter
At worst, it's comparable. You could make a complicated argument that costs of living in Japan are lower so on pseudo-PPP terms they're paid better, but this is by no means clear.
> Japan as an example for this is like a red herring. The US/UK is not Japan. Just lookup "Cheating culture in Japan"
The red herring is raising totally unrelated behavior from a Reddit post.
In truth, most of Asia's tipping culture is much like Japan's. China's 1.4B denizens don't tip. I'm in Croatia and nobody tips here, either. It's only expected of tourists.
I don't understand why you are conflating inflation of sit-down restaurant and bar prices (which doesn't affect poor people) and inflation of grocery prices (which does). You don't tip at checkout at a grocery store or a liquor store.
That implies consumers spend differently if they know the actual cost ahead of time, otherwise service inclusive pricing would make no difference. ie the whole industry is exploiting anchoring effects.
Removing anchoring effects would make restaurant businesses less profitable, and consequently the properties that host them less valuable, so lower rents.
There are clear incentives for pushing an inflation narrative.