You said the following:
1. Customers think TOTAL cost. Regardless if it is $16/$4 or $20/0. The customer will only pay $20
2. In order for an employer to pay their staff full wages, they would have to charge the meal $24 to include the $4 tip
3. Since customers wont pay $24, employers will lose business.
Correct. If the customer thinks the meal (which includes the wait service in case you're confused) is worth $20, but not worth $24, the owner will lose business.
So, according to your logic, employers MUST keep their meals below $16 (example) to allow for the $4 tip, else, the customer will not pay the $4 tip, because the customer thinks in total cost ($20).
You were SOOOOOOOOO close
. I am not
saying that the customer will not pay the tip. I have never said that
. I'm assuming the customer knows that he'll be expected to pay a $4 tip on a $20 meal, but since he doesn't think the meal is worth $24, he simply will not go to that restaurant. He'll stay home. Go to another restaurant with better prices. Whatever. In any case, the owner will lose business. It's bizarre that you correctly stated the whole "he'll lose business bit", but then transformed it into "waiter will lose tip" here. That's baffling.
This is opposed to any logical person with a sense of money managing who segregates the value of the food from the tip of the service, since the service is not part of the food, not necessary and at your discretion.
What's also baffling is your continued insistence about this. It makes no sense. A logical person with a sense of money management will consider the total amount of dollars he's going to pay for something when deciding whether to purchase it. You have a very different definition of "sense of money" than anyone else I've ever encountered. While you can certainly argue that *you* completely segregate these things when making purchasing decisions, you are clearly in the absolute minority here. And since the business owner will make business decisions based on the typical response to a pricing change and not one one strange person on the internet claims he'd do, he's going to resist anything that raises the total cost of meals at his restaurant.
The second one is a complete fallacy as the tip is based on service, a profitable business may not have to make any changes to make profit and there are several other methods of increasing revenue.
So you're claiming that that waiters tip is completely independent of the food? It's based purely on the customers perception of the quality of the service, and should not count at all as part of the pay the employer is providing? If that were true, then you should not only be ok with the employer paying a lower wage, but with the employer not paying the waiter a direct wage at all
. Because in your world, the waiter doesn't actually work for the owner at all. He's an independent contractor working for, and paid directly by, the customer.
We absolutely could manage pay for waitstaff this way. But for ease of paperwork (and things like benefits, payroll taxes, etc), we treat them as an employee. But since they also get money directly from the customer, we allow the employer to pay them a lower hourly wage. You're getting so caught up in how the money gets from point A to point B, that you're missing the bigger picture. At the end of the day, the waitstaff gets paid. And usually they get paid quite well.
Do you tip the pizza driver when you order take out?
Not as much as I tip a waiter. Want to know why? Because the pizza driver is a full wage employee of the business. He's already being paid for his time (and gas and wear/tear on his vehicle) delivering the pizza, no different than the guy who makes the pizza. The waiter is not, which is why we tip them more. Arguing that we should both pay them a full wage *and* tip them artificially increases the cost of waitstaff relative to other employees who often have just as much to do with the total value of the meal.
There's a reason why in many restaurants, the waitstaff don't just keep their tips for themselves. It's divided up between the waiter, the bartender, and the busboys (sometimes the cooks well). This is because as the base price increases, the value of the tip relative to the time it takes to earn it increases dramatically. It takes no more time to wait a table at a $100/meal restaurant than at a $20/meal one. But the tip will be 5 times as much. Allowing the waiter to just keep all that extra cash is unfair to everyone else, because while the service certainly will be better, it's probably not 5 times better. Most of what people are are willing to pay more for in a higher cost restaurant is the better quality ingredients, better chefs and preparations, better decor, better ambiance, location, etc.
The tip money tends to get spread around, so thinking of it being just a reward to the server for doing a good job, and somehow separate from the other costs/value associated with the meal is just plain wrong. When you tip, you are rewarding the guys who bussed your table, and the person who seated you there, and the person who made your food, and the person who made you drinks, and yes, the person who actually waited at the table. You cannot separate that the way you seem to want to insist on doing. Well, you can, but you'd be doing it wrong. The waitstaff gets the largest share of those tips (and it offsets their lower base pay), but there really is a money calculation going on behind the scenes that I suspect you are completely unaware of.
BTW. This is precisely why restaurants often include the tip on large party meals. That tip is calculated into the entire restaurants bottom line, including pay for their staff. A single large table failing to pay the correct tip can basically wipe out the profits for everyone for that night.
Once again, only if the tip was added into the bill can you make that claim.
Yeah. Welcome to the real world.
You argued that the tips shouldn't count and the employer should pay the full wage anyway.
So, if a man filled with the Christmas spirit tips a person $1k, do you adjust their wages?
No. You adjust their wages based on an expected average amount of wage they will get from tips. This isn't rocket science.
AS LONG AS THE CONSUMER THINKS S/HE IS GETTING A GOOD DEAL, THAN S/HE WILL CONTINUE TO PAY FOR THE MEAL AND TIP ACCORDINGLY. IT DOES NOT MATTER IF YOU INCREASE YOUR PRICES.[/b][/u]
Um... What everyone else has said.
As an employer, you can't factor in everyone's "cost limits", because you don't know them.
Correct, but irrelevant. It's not about cost limits. It's about how much someone is willing to pay for something. No one's going to pay $100 for a bowl of soup they could get at home in a can for $2. The employer has to figure out how much he can charge for a meal without unduly affecting his business, and has to make sure he can stay in business at that price (supply vs demand). He doesn't have to know anything about each individual customer, just know the market in general.
You don't know what those numbers and therefore you can't plan against them. The only thing you can go off of is the price range of your meals. So, therefore, as long as your meals stay within those prices ranges, it is safe to assume that people will continue to pay for them.
Only if the meals are worth the price. You can't just declare a price range of $20-$30 for your meals, and then put dog food on the table and expect people to go to your restaurant. The food and service and decor has to justify that price range you are charging. If it doesn't, you will lose business.
Just because you decided to order two appetizers, two desserts, non-refillable drinks and decided not to order the 20 oz steak because it would put you over your personal budget doesn't mean that any of those items are outside the targeted price range and/or overpriced. So, therefore an employer can only factor in the value prices of their meals.
You have the most muddled thinking I've ever encountered. I'm honestly not sure if it's a comprehension issue (like you just don't know how to read or understand certain words), of if it's a critical thinking issue. None of what you're talking about has anything to do with the issue we're discussing. The restaurant owner doesn't care what exactly any given person will order. He cares that on average, he will get enough customers willing to pay enough money to eat at the restaurant to cover the costs of the restaurant and make him some money as well. That's it. Anything that increases his costs more than it increases the amount customers are willing to pay will hurt his business. Anything that increases the amount customers will pay more than it increases his costs will help his business.
Employers don't know how much gas you have to use to get there, so they can't plan against it.
They don't have to know exactly how much gas. What they do know is that if they place their restaurant 50 miles down a dead end dirt road with nothing else around, they'll get fewer customers than if they place it in the middle of a heavily populated area. Location is a key factor to opening a restaurant because... wait for it... people will go to a restaurant closer to them unless your restaurant offers some other value to them to offset the increased distance. You're getting way too caught up in details and missing the bigger pictures. Even if you don't know the specifics, there are certain trends that you can count on.
[quote]Employers also don't know how much you are willing to tip either. The only known factor is the value of the meals.[/quote]
"You" meaning that specific customer right there? Correct. "You" meaning the average of the next 100 customers who walk though the door? Absolutely they do. They can precisely calculate the average tip relative to average price of meal purchased. Why the hell do you think so many people talk about tips as a percentage? The business owner absolutely can count on a total volume of money coming into the restaurant that is at least 10% higher than the total cost of all the meals sold. And he will use that number to cover part of his labor costs when calculating the costs to run his restaurant.
Do you know anything at all about business?