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Location: St Thomas, USVI - Seattle, WA - Gulf Coast, TX
811 posts, read 1,146,950 times
Reputation: 2322
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Quote:
Originally Posted by Xanathos
On point 1: Ivar's themselves admits that one of their challenges has been educating customers that they don't have to tip. Sure, it's likely posted...somewhere. And it's also completely glossed over by MOST people who walk through the door, who don't want to read a bunch of fine print or historical context of the restaurant or whatever else is cluttering up the menu, aside from menu items.
I don't know how Ivar's, specifically, is doing with communicating this policy to customers, but this is seriously not a big deal at all. I'm not sure why it's being made out as such a challenge, but lets give folks credit for being smart enough to [quickly] adapt to understanding the no-tipping policy. Many other places, a prime example being a cruise ship destination like my current home away from Seattle (St Thomas, USVI), have pricing structures that account for an automatic gratuity or a gratuity that is included into menu prices + wages. Customers do not struggle with this whatsoever. Tipping is not something that is done in many other cultures (Australians never tip, several European countries are clueless to the American tipping custom), so adjusting prices + wages or including an automatic gratuity amount is a pretty standard way to make this fair for servers in a place where patrons come from all corners of the globe.
None of this is a big deal. It's not a new or difficult concept. People are smart enough to figure it out, trust me. I find it interesting that there seems to be some general buzz lately amount American tipping culture (patrons seem to be tired of it) and how that might be changed, but it's just that: interesting, not that big of a deal economically-speaking.
I wish I had a direct reference to a great NPR segment I heard locally a few months ago. It talked about how unscientific tipping is, and how it is not a reflection of the quality of service received. It also talked about how quality of service was unaffected by "tip motivation" or lack thereof. There was some good data to go along with this and I apologize that I don't have that to present here.
All in all, I truly believe that this is a cultural alteration much, much more than something that has any notable economic impact. It's just not a big deal. Plain and simple. If this works for Ivar's and I don't have to come to my arbitrary moral decision about how much my server deserves to be tipped that day, more power to them.
On point 1: Ivar's themselves admits that one of their challenges has been educating customers that they don't have to tip. Sure, it's likely posted...somewhere. And it's also completely glossed over by MOST people who walk through the door, who don't want to read a bunch of fine print or historical context of the restaurant or whatever else is cluttering up the menu, aside from menu items.
This. And I would be willing to bet a lot of money that the hourly, used-to-be-tip-based-pay employees are NOT making special attempts to inform the unknowing public that tips are now optional...
After a base wage increase of 36%, if we just figure going from $11 (minimum wage as of 4/15) to $15. If we figure going from $9.47 (minimum wage before 4/15), that's an increase of 59%. Doing that with a 21% price increase and a projected 20% increase in revenues, is pretty darn good.
I am no economist (obviously), but this logic makes no sense to me. You state yourself that the price increase is not equaling-out to the revenue increase, so it seems a losing proposition - even if it's a small amount of loss.
Further, as I mentioned earlier - considering your comments about 36% and 59% increases in wage, you are assuming that only employees being paid less than $15 per hour are getting raises. If this company cares to keep their valuable staff - the ones with education and skills, such as head chefs, executives, marketing planners - then those people are going to expect raises in order to maintain their relative worth in the workplace. I don't know about anyone else, but if I spent a few years and a bunch of tuition on culinary school to become a chef, and suddenly the busboy was making the same hourly wage as me, I would be pretty pissed.
This, in turn will lead to a further erosion of the profit margin, and then further increases in the menu prices.
These issues either are, or will be, factors in your "dynamic changing realities" that you are conveniently ignoring.
On point 2: You're doubling down on malformed information and selective manipulation of data, and I'm simply not going to engage an argument that won't use holistic data because they either do not wish to or cannot grok the idea their platform is flawed.
Actually, that describes your sophistic arguments quite nicely. To fix them, start by acknowledging that the standard tip (15%?) has been folded into the 21% price increase. If you have any evidence that Ivar's is not making suitable efforts to make sure their customers are aware of that, then by all means provide it.
I don't know how Ivar's, specifically, is doing with communicating this policy to customers, but this is seriously not a big deal at all. I'm not sure why it's being made out as such a challenge, but lets give folks credit for being smart enough to [quickly] adapt to understanding the no-tipping policy. Many other places, a prime example being a cruise ship destination like my current home away from Seattle (St Thomas, USVI), have pricing structures that account for an automatic gratuity or a gratuity that is included into menu prices + wages. Customers do not struggle with this whatsoever. Tipping is not something that is done in many other cultures (Australians never tip, several European countries are clueless to the American tipping custom), so adjusting prices + wages or including an automatic gratuity amount is a pretty standard way to make this fair for servers in a place where patrons come from all corners of the globe.
None of this is a big deal. It's not a new or difficult concept. People are smart enough to figure it out, trust me. I find it interesting that there seems to be some general buzz lately amount American tipping culture (patrons seem to be tired of it) and how that might be changed, but it's just that: interesting, not that big of a deal economically-speaking.
I wish I had a direct reference to a great NPR segment I heard locally a few months ago. It talked about how unscientific tipping is, and how it is not a reflection of the quality of service received. It also talked about how quality of service was unaffected by "tip motivation" or lack thereof. There was some good data to go along with this and I apologize that I don't have that to present here.
All in all, I truly believe that this is a cultural alteration much, much more than something that has any notable economic impact. It's just not a big deal. Plain and simple. If this works for Ivar's and I don't have to come to my arbitrary moral decision about how much my server deserves to be tipped that day, more power to them.
I myself am an immigrant from a country that does not traditionally tip, so this was something that had to be learned ages ago. And I USED to think that tipping was a completely stupid practice and should be done away with, and a server should just be paid whatever wage the market (not a politician or an activist - the market ) determined a server should be worth.
Then, a few years ago, I joined a private professional's club here in the Seattle area. I won't say which one, but there aren't that many, and they all operate functionally the same in this regard. This particular club did away with tipping ages ago (more than 4, probably since its inception). They pay all their wait staff a flat wage in the 20-some-odd dollar an hour range. There's no tip line on the receipts you sign off on to have applied to your member account, so there's no confusion on this front. There's a 22% surcharge on every cheque to account for the sales tax and to help fund the salary of these servers.
......the service is oftentimes ABOMINABLE. It is pathetically horrendous, some of the worst I've ever experienced. There is no quality control on the part of the servers. If you order the hamburger there and the line cook accidentally puts 2 bun tops for the bun or forgets to put half the bun on it? They won't correct that. Drink refills? Good luck, man. Order a fruit juice from the well? Maybe it'll come in a goblet, maybe it'll come in a small Collins glass. Maybe it'll have ice, maybe it won't - it's always going to be a surprise. And you better not be on a schedule or have an expectation of the food being consistently hot, because maybe your server didn't feel like checking the hot plate to see if your order was ready for a while. There's *some* staff churn, but not much because it's a cush gig. New people come in and they're quite eager to do a great job....for a while. Then they start to figure out and realise they get the same wage whether they do their job well or just completely slack off, and more often than not they fall into a very passive lazy rote. They simply don't care which, and people can hate on me for painting with a broad brush all they like but it's 100% true, when you're dealing with what are classically defined as low skill jobs, you oftentimes don't get the hardest workers without some Theory X type of enticement.
It is, simply, an American phenomena, and not a pleasant one. Tipping is absolutely an essential aspect of the food service industry in this country because, frankly, the people who work food service are generally naturally predisposed towards slacking.
I am no economist (obviously), but this logic makes no sense to me. You state yourself that the price increase is not equaling-out to the revenue increase, so it seems a losing proposition - even if it's a small amount of loss.
Further, as I mentioned earlier - considering your comments about 36% and 59% increases in wage, you are assuming that only employees being paid less than $15 per hour are getting raises. If this company cares to keep their valuable staff - the ones with education and skills, such as head chefs, executives, marketing planners - then those people are going to expect raises in order to maintain their relative worth in the workplace. I don't know about anyone else, but if I spent a few years and a bunch of tuition on culinary school to become a chef, and suddenly the busboy was making the same hourly wage as me, I would be pretty pissed.
This, in turn will lead to a further erosion of the profit margin, and then further increases in the menu prices.
These issues either are, or will be, factors in your "dynamic changing realities" that you are conveniently ignoring.
I would bet money they did not raise the wages of those already making $15+ to make sure that they were kept above the minimum wage workers. This type of (and I'm loathe to use the phrase, but it fits in this instance) socialist maneuver is designed as a crabs-in-a-barrel maneuver meant to put everybody on the same level. Case in point: That card processing company that put everybody at 70K a year. The fringe progressive base of the Seattle region loves trumpeting this as a clear example of how a company should be run. Meanwhile, reports of massive employee turnover and dissatisfaction at either being dragged down to the base level salary with underperformers and people leaving because their salaries were brought DOWN to 70K (and the brother of the CEO who is suing the CEO for doing this) get completely ignored by those who refuse to acknowledge the law of unintended consequence.
With initiatives such as these, it's zero-sum: Those at the very bottom get a temporary boost, until inflation and cost increases to offset increased overhead take hold, and they're left right where they started. Those slightly-to-moderately above the bottom feel a bit of the pinch, as their finite spending dollars are de-valued and they are dragged down a rung on the ladder of wealth. Those in the upper class peripherally notice the devaluation of their currency, but typically have enough disposable income to weather it and keep going. Or they come up with alternate ways to extract the lesser valued currency out of those beneath them in order to keep them where they previously were. Corporations simply increase costs across the board and pass the increased expense to the consumer. And those who are retired or disabled or otherwise on fixed income, annuities, or retirement distributions get hurt the absolute most, as they are no longer earning income, and the finite resource they had to see them through to the end of their lives has just taken a huge hit in the form of increased costs for everything they use to survive. How this gets trumpeted as a "success" for anybody but the absolute lowest common denominator is beyond me.
I am no economist (obviously), but this logic makes no sense to me. You state yourself that the price increase is not equaling-out to the revenue increase, so it seems a losing proposition - even if it's a small amount of loss.
A 1% difference is basically insignificant. It is a projection for one thing - could end up being 5% either way.
A portion of the price increase is being returned to tipped employees due to the standard tip (15%?) being folded into the new prices. Going on what was told to a poster here, it would seem that at least one server is getting 8% (whether of the old or new price is not clear). While technically prices have been increased 21%, a portion of that is a pass-through to tipped employees and is thus a built-in gratuity. Subtract that to get the actual price increase. Until you are willing to acknowledge that very basic fact, what's the point of discussing anything?
A 1% difference is basically insignificant. It is a projection for one thing - could end up being 5% either way.
A portion of the price increase is being returned to tipped employees due to the standard tip (15%?) being folded into the new prices. Going on what was told to a poster here, it would seem that at least one server is getting 8% (whether of the old or new price is not clear). While technically prices have been increased 21%, a portion of that is a pass-through to tipped employees and is thus a built-in gratuity. Subtract that to get the actual price increase. Until you are willing to acknowledge that very basic fact, what's the point of discussing anything?
You aren't presenting "basic facts". You're taking a statement somebody made whereby they said the server gets 8% of the TIPPED portion. Which means the back of house gets everything beyond 8%. If the diner doesn't tip, there's no 8% addition.
You, on the other hand, in your insatiable quest to pull numbers out of thin air to either confuse the subject or else draw false conclusions, and attempt to dilute the conversation with data manipulation not based in any semblance of reality, keep talking this up like it's part of the 'built-in' gratuity, which is patently false. Which makes your entire argument invalid. Your entire platform is bad, and you should feel bad for even presenting it to us.
You aren't presenting "basic facts". You're taking a statement somebody made whereby they said the server gets 8% of the TIPPED portion. Which means the back of house gets everything beyond 8%. If the diner doesn't tip, there's no 8% addition.
From the original article:
Quote:
Brett Richards, a 50-year-old singer and guitarist, has worked 25 years in food service, including the past eight at Ivar's. Before, he made minimum wage, plus tips. Now, he gets $15 an hour, including a share of the 21 percent menu price increase, plus any additional tips customers leave. He expects to make almost $7,000 more this year, money that's helping him with his increased rent and with taking his kids out to eat a little more often.
That the server is getting a "share of the 21 percent menu price increase" and "any additional tips" is not in dispute.
I've never stated that I know how much of the price increase is being passed through to the server. Tobester's statement, "the server told us he gets 8% of the tip portion after he pays out other people," would seem to be referring to the server's share of the price increase ("tip portion"?) and not to "any additional tips". The addendum, "after he pays out other people," would seem to indicate the total being passed through is even higher.
Now, whether that refers to 8% of the original price, of the new price, etc., I don't know (which is why I've always added a question mark). My argument, however, doesn't depend on how much is shared with servers, but simply that a significant portion is, with the 20% revenue increase exceeding the price increase (a good deal less than 20%, once subtracting the gratuity pass-through) being perfectly reasonable.
It behooves Ivar's to see that servers come out ahead, rather than come up short, or they'll look for work elsewhere - which is why the server in the quote above says he "expects to make almost $7,000 more this year".
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