Author Topic: If service people are making $15 an hour why do we still tip?  (Read 1718 times)

Offline jh35

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If service people are making $15 an hour why do we still tip?
« on: August 08, 2019, 11:31:48 AM »
If service people are making $15 an hour why do we still tip?


from the Gothamist:

https://gothamist.com/2019/08/07/15_minimum_wage_actually_good.php


NYC Restaurants 'Thriving' While Paying $15 Minimum Wage, Study Finds
Aug. 7, 2019 4:19 p.m.




(Mike Dresser / Flickr)

Despite apocalyptic warnings from restaurateurs that a $15 minimum wage would ruin business, a new study suggests that higher earnings for employees haven't actually hurt the hospitality industry—in fact, the city's eateries overall are "thriving."

James Parrott, director of economic and fiscal policies at the New School's Center for New York City Affairs, research assistant Lina Moe, and the National Employment Law Project's researcher and policy analyst Yannet Lathrop looked at government data on employment and wages in their multi-pronged analysis of New York City's restaurant scene. According to their report, the industry witnessed "a strong economic expansion" as wages grew between 2013 and 2018—even amid rising rents and flourishing third-party delivery services, which cut into restaurant profits.

"Contrary to fears of massive job losses, $20 Big Macs, and shuttered restaurants, we found a thriving industry," the study's authors stated in a press release.

In terms of employment, pay, and the number of both limited- and full-service establishments, the analysis indicated that NYC's hospitality sector has "substantially" outpaced private sector job growth nationwide since its minimum wage ratcheted up from $7.25 an hour at the end of 2013 to $15 an hour by the end of 2018. Especially in Queens, the Bronx, Brooklyn, and Staten Island, restaurants experienced higher job and wage growth—a significant finding, the authors note, because spending by tourists and "generally higher-income patrons" tends to cluster in Manhattan. In the outer boroughs, full-service restaurants reportedly proliferated at a rate three times as fast as in Manhattan.

In comparison to other large cities that have not undertaken a minimum wage hike, NYC's restaurant industry appears particularly healthy. The authors looked at 12 of these cities, all with populations over 500,000 people, and found that with three exceptions—Nashville, Tennessee; Charlotte, North Carolina; and Dallas, Texas—New York charted higher rates of employment growth in its limited- and full-service establishments. Those restaurants also registered higher weekly wage growth, which makes sense considering the context. But as the authors point out, research on other cities that have raised the minimum wage suggests that doing so did not negatively affect the industry's growth.

In New York, Parrott told Gothamist, raising the minimum wage meant that restaurant workers saw a 20 to 28 percent increase in their pay, adjusted for inflation—"the largest real increases for a big group of low-wage workers since the 1960s."

Still, the authors were careful to note that a $15 minimum wage isn't responsible for whatever boon the NYC restaurant scene has recently experienced—rather, their findings suggest that restaurants are doing just fine despite the obligation to pay their hourly workers more money. According to the study, NYC's restaurants have increased sales by an annual 6.6 percent starting in 2014, netting almost $22 billion by 2018.

Of course, small business owners and restaurateurs have complained that a higher minimum wage obligates them to cut corners elsewhere if they want to keep operations afloat. According to a 2018 survey by the NYC Hospitality Alliance, many restaurants have raised prices (according to today's study, those increases have amounted to an average of "less than three percent a year since the minimum wage started to rise"), and some employers have scaled back employee hours and overtime. Nearly 50 percent of respondents to the Hospitality Alliance's survey said they would have to eliminate jobs in 2019 to make do.

Wednesday's study casts doubt on that survey's methodology, however, noting that the details were never made public. The picture the authors see when analyzing "data on employment and wages for every single restaurant operating in NYC" looks different, Parrott told Gothamist.

"The restaurant industry is very competitive," he said. "Some individual restaurants always do better than others, and some inevitably fall by the wayside," he added, nodding to acknowledged industry difficulties, including the expensive NYC real estate hellscape and a strengthened dollar that weakens tourist spending. Even taking those caveats into consideration, Parrott concluded, "It's hard to look at the comprehensive data we did and not understand that many, many restaurants have effectively adapted to the rising minimum wage. Not everyone, but the vast majority."

Offline Shelby2

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Re: If service people are making $15 an hour why do we still tip?
« Reply #1 on: August 08, 2019, 12:46:47 PM »
That article is confusing. I don't believe wait staff are required to be paid the $15/hour minimum wage. The Dept of Labor shows that large employers must pay $12.50 + $2.50 "tip credit" while small employers pay $11.25 plus $2.25 tip credit. https://labor.ny.gov/formsdocs/factsheets/pdfs/p717.pdf

So from that, it seems like we're tipping because the employees are still depending on tips to make a living wage. As for other jobs (non wait staff), I don't think most people tip anyway.

Offline Chingwa

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Re: If service people are making $15 an hour why do we still tip?
« Reply #2 on: August 08, 2019, 12:47:09 PM »
Good question!  Tipping is a barbaric practice.  People should be paid for what they are worth, good service should be expected(#1) and rewarded by the employer(#2), and customers shouldn't be burdened with the tipping problem at all.

The article seems a bit suspect as NYC food scene is one of the best in the world so comparing to smaller cities is a miss from the start.  However the Union Square coffee shop did go bust citing the wage hike as one of the main reasons, and I'm sure they aren't alone.

Offline hfm

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Re: If service people are making $15 an hour why do we still tip?
« Reply #3 on: August 10, 2019, 11:41:40 PM »
I do agree there. It seems awful to basically saddle customers with a guilt trip and shoulder the burden of keeping their workers from going homeless.

Offline Jhx

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Re: If service people are making $15 an hour why do we still tip?
« Reply #4 on: August 10, 2019, 11:57:40 PM »
 I’ve noticed that some European cities, Rome, Paris,and lately even London are  trying to add gratuities somehow on the bill. And the wait staff can sometimes be very aggressive about a gratuity. They’ve gotten to know Americans are very generous. We’ve created a monster.

Offline JHResident

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Re: If service people are making $15 an hour why do we still tip?
« Reply #5 on: August 12, 2019, 05:21:57 PM »
I’ve noticed that some European cities, Rome, Paris,and lately even London are  trying to add gratuities somehow on the bill. And the wait staff can sometimes be very aggressive about a gratuity.
European restaurants have always added 10% service to the bill. This is not a gratuity. Americans often stiff the wait staff because they assume the top has been included.  If you go to a restaurant anywhere, be prepared to tip or eat at home.

Offline Jhx

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Re: If service people are making $15 an hour why do we still tip?
« Reply #6 on: August 12, 2019, 06:43:07 PM »
 The service charge does go to the restaurant, and not the waiter. But the wait staff are paid a normal salary which is why you don’t tip. Unless you want to tell me the French should’ve been tipping all all along, or as you say, stayed at home .

Offline francis

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Re: If service people are making $15 an hour why do we still tip?
« Reply #7 on: August 14, 2019, 02:14:45 PM »
 I'm in Europe  at least twice a year and if I do tip it's just rounding off the bill.  My friends who are natives never tip and  always tell me it's totally unnecessary.  So when in Rome, I do as the Romans.

Offline jeanette

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Re: If service people are making $15 an hour why do we still tip?
« Reply #8 on: August 17, 2019, 08:23:40 PM »
I am going to stop tipping. I asked a counter worker at a chain coffee shop what he makes, he said over 13 (13.65 I think).

Offline deja

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Re: If service people are making $15 an hour why do we still tip?
« Reply #9 on: August 19, 2019, 05:57:53 AM »
In many European countries tipping is not required or expected, but leaving a little extra to acknowledge exemplary service is appreciated.  That's what I am going to do and the service will have to be at that standard for me to do so.

Offline Hagop

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Re: If service people are making $15 an hour why do we still tip?
« Reply #10 on: August 19, 2019, 08:04:46 AM »
That article is confusing. I don't believe wait staff are required to be paid the $15/hour minimum wage. The Dept of Labor shows that large employers must pay $12.50 + $2.50 "tip credit" while small employers pay $11.25 plus $2.25 tip credit. https://labor.ny.gov/formsdocs/factsheets/pdfs/p717.pdf

So from that, it seems like we're tipping because the employees are still depending on tips to make a living wage. As for other jobs (non wait staff), I don't think most people tip anyway.

This is correct, and worth repeating. That article seems to be focused on non-tipped restaurant employees (e.g. fast food workers). Tipped waitstaff still do not make the same minimum wage as other workers. Their "estimated" tips are factored into their "minimum" wage. Something to keep in mind.

Offline Shelby2

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Re: If service people are making $15 an hour why do we still tip?
« Reply #11 on: August 19, 2019, 08:54:54 AM »
What drives me a little crazy are these ipad type screens that swivel around after you enter your credit card, where you put your signature but they also ask for a tip. These are only found at the counter/cashier area so if you're using one, clearly you didn't get table service. I just don't think I should be asked to tip for buying a coffee or a croissant at the counter of a cafe. I get that I have a choice, but I find it a little aggressive.

Offline Chingwa

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Re: If service people are making $15 an hour why do we still tip?
« Reply #12 on: August 20, 2019, 06:26:06 PM »
I agree, tip jars at cafes etc. are gross.

Offline buzz

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Re: If service people are making $15 an hour why do we still tip?
« Reply #13 on: August 21, 2019, 03:13:55 PM »
I'd like to know who in America can live on $15 an hour when a studio is going for over $1,000.  ?????

Offline hum@njukebox1

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Re: If service people are making $15 an hour why do we still tip?
« Reply #14 on: August 21, 2019, 03:57:36 PM »
Roommates.

Jackson Heights Life

Re: If service people are making $15 an hour why do we still tip?
« Reply #14 on: August 21, 2019, 03:57:36 PM »