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Comment by error54 | Hacker News Reader

I've noticed many companies have this "tips included" built into the price which I think is a poor practice. Tips are supposed to be a way to reward excellent service and incentivize the employee to work hard. Having worked in a restaurant for 6 years I always tip well but I can say that honestly, I've had several experiences where the person didn't earn a tip. If you're going to include tips into the price, just pay them a flat salary and be done with because a mandatory tip isn't a tip at all, it's a surcharge.

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All a tip is is employers tricking you, their customer, into paying their personnel costs (often upwards of 4/5ths of it!) directly. You don't "incentivise" someone to work hard by paying them the money they're actually owed by law [1].

[1] In the US, restaurants don't have to pay minimum wage unless the tips don't reach minimum wage (in which case, the company will make up the difference and then fire the employee for performance). The worst I've heard of was a working in an $8/hr state getting $1.20/hr.

You'll be paying those personnel costs either way. In a tipless society, your entree would just cost more, and the server would get their hourly regardless.

People like servers and drivers have an opportunity to provide extra value beyond their purely mechanical function. A culture of tipping allows the consumer to reward that extra effort, at their option.

That said, I do agree that 15-20% as a tip for 'standard' service is just silly. If I owned a restaurant, I'd want to hear about it if a customer was unhappy. When the customer can just stiff the server on their tip and leave, it gets harder to identify which workers need retraining/replacement.

> In a tipless society, your entree would just cost more

I live in a tipless society. Things cost exactly the same here (in Australia) as they do in the US. Difference is we don't have to pay extra on top of the meal.

We also get paid far far more. Minimum wage over here, in fast food, is $20 an hour.

> Things cost exactly the same here (in Australia) as they do in the US

That's not true. The cost of living in Australia is considerably higher than in the US. Melbourne and Sydney are both in The Economist's Worldwide Cost of Living top 10 (no US city is)[1].

Looking at food specifically, in 2011 one litre of milk was on average $2.21 USD in Australia, and a 1kg loaf of bread $5.24 USD.[2] In the US they were $1.80 and $2.80[3]. Half the price.

> Minimum wage over here, in fast food, is $20 an hour.

It's actually around $15 per hour. It varies a little with age[4][5]. Still quite high though. I'm not saying food prices necessarily directly connected with the minimum wage, just refuting the idea that in Australia food is the same price as the US. It simply isn't!

[1]:http://www.cfoinnovation.com/system/files/worldwide%20cost%2... [2]:http://www.liveinvictoria.vic.gov.au/living-in-victoria/cost... [3]:http://data.bls.gov/cgi-bin/surveymost?ap [4]:http://www.theatlantic.com/business/archive/2013/08/the-magi... [5]:https://www.fairwork.gov.au/pay/national-minimum-wage/pages/...

Service sector workers are most likely casual (ie not permanent part or full time) and thus their minimum wage is AUD$20.30/hr [1]

Tipping the scales further against America is that they are also fully covered by the national health insurance system, Medicare.

That said, it's hard to directly compare Australia and the USA - there's just too many variables. You are correct in that food is a little cheaper in the States; not 50% but probably 30% cheaper on average, from experience. Rent, too, is higher in Australia.

All things considered, though, I think it's pretty inarguable that a service sector worker is going to have a higher income and better quality of life in Australia. That's a consequence of deliberate economic policy. It's not without its negatives, of course - service hours in Australia are much less than in the USA, and certainly a factor in that is the higher cost of staff. For example, there is not a single 24-hour supermarket in Sydney!

[1] https://www.fairwork.gov.au/pay/national-minimum-wage/pages/...

> You'll be paying those personnel costs either way.

Obviously, but be honest about it. Don't tell me I can get a stake for $9 when I still have to pay taxes plus ~20% on top of the total to pay your employees.

I also hate this busy-body idea that the customers want a say in how much the server is paid to encourage "extra value beyond their purely mechanical function". That leads to annoying servers pestering me every five minutes looking to "add value". I want my servers to be as near to transparent as can possibly be. I didn't come there to talk to them, I came to have a good meal and enjoy the social company who came with me.

That's ridiculous - minimum wage is minimum wage. Performance incentive is performance incentive.

Were the unions asleep when that law got written?

I own a restaurant in California. CA is one of the states in the US where it is illegal for employers to use tips towards paying at least minimum wage. (Had to double check, so here's a source: http://www.dir.ca.gov/dlse/FAQ_tipsandgratuities.htm)

Not that I condone doing such a thing...it's a pretty sleazy employer that'll do such a thing.

> I always tip well

and there lies the problem.

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