The entire point of tips is that they are the workers', 100%. It's also a variable cost based on the willingness to pay, so it creates a form of price discrimination, where those willing to spend more, spend more, those wanting to spend less, spend less.

Those two factors lead to the inescapable conclusion that tipped staff make more money. Price discrimination captures surplus value that simply is not available to schemes that don't use price discrimination, and any new price discrimination scheme would almost certainly benefit the employer at least in addition to the employees, if not be entirely captured by the owners.

Combined with the, let's say "extra judicial tax incentives", non-tipping restaurants simply cannot compete with tipping-norm restaurants for service staff. In an environment where tipping exists everywhere else, you then get an adverse selection pressure for shitty waitstaff, because if they were competent they would be working somewhere that competency would earn them tips. Which piles on top of the dealignment of incentives to create substantially lower quality service.

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palata 4 hours ago | parent [-]

You sound a lot more like an owner than an employee. Have you ever been relying on tips to survive? I mean someone who does not benefit from the system, I'm sure some employees benefit from it, in some cases.

> Those two factors lead to the inescapable conclusion that tipped staff make more money

Or have you ever... talked with someone who relied on tips to survive, in an environment where they don't benefit from it?

> Price discrimination captures surplus value that simply is not available to schemes that don't use price discrimination, and any new price discrimination scheme would almost certainly benefit the employer at least in addition to the employees, if not be entirely captured by the owners.

Would you mind formulating that in a simpler way? Sounds like "price discrimination captures more value, which benefits the owners". Which is kind of confirming my point that tips are a way for owners to abuse the employees.

> Combined with the, let's say "extra judicial tax incentives"

Sure, the law incentivises the owners to abuse the employees. That is insane, too.

> because if they were competent they would be working somewhere that competency would earn them tips

"If I am rich that's because I am better, because why would I be rich otherwise?". Again it sounds a lot more like an owner than an employee.

Don't get me wrong: I understand why an owner may want to abuse employees in order to make more profit. Humans suck, that's old news. I'm just saying that the whole point of regulations is to counter the fact that humans suck.

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jaredklewis an hour ago | parent | next [-]

IMHO, tipping is a totally irrational way to compensate employees, but at least the places I have lived in the US, it is not disputable: tipped jobs like bartenders, baristas, or restaurants server make significantly more money than untipped jobs doing similar work, like fast food workers.

Does tiping make any sense? Not to me. Does it (strangely) result in higher wages? Yes, and it's not even remotely close (unless there is some argument that being a barista is markedly more skilled than working at McDonald's, an argument I am somewhat skeptical of).

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OkayPhysicist 4 hours ago | parent | prev [-]

Yes, I have both been a server, and regularly spend time with people who still work as servers. My whole point is that we did benefit from it, by making much fatter paychecks than we would otherwise.

My price discrimination comment was admittedly unclear, since I tangled up two chains of reasoning. Restaurants make some amount of money from customers. Some of that money goes to the owners, some of that goes to labor. Price discrimination schemes (i.e., charging people willing to pay more, more, and people willing to pay less, less), by their nature, extract more money from customers. So restaurants with price discrimination schemes have more money total to split between labor and the owners.

Thus, we'd expect that labor makes more money at a restaurant with a price discrimination scheme than at one with flat pricing.

Culturally expected tipping is a specific price discrimination scheme, that has the cultural and legal rules to disproportionately benefit the labor. Other price discrimination schemes lack these rules, so we'd expect some of the excess value extracted from customers to be taken by the owners, rather than labor.

Thus, Labor at restaurants with tipping get paid more than labor at restaurants with other price discrimination schemes, which get paid more than labor at restaurants with flat rate pricing.

Tipping culture is not an exploitation of the servers. If you're morally opposed to (even voluntary) price discrimination, you might be able to frame it as being exploitative against the customers. But of all the ways to structure a restaurant, tipping is one of the most effective at inflating servers' pay checks, which I struggle to imagine how you can frame as exploiting said servers.

	▲	palata an hour ago \| parent [-]
		Doesn't it ever happen that tipped staff end up having a "shitty" shift (say hours of the day where fewer customers are here) and end up working for nothing? I have heard that, it doesn't sound like a "much fatter paycheck". Or would you say that all tipped staff makes much fatter paychecks?