what? all that is required in the transition to fully-waged labor is to pay an equivalent wage to the former wage+tips. if management pays a lower wage, that is a choice, because management has full control over what they rate hourly and what they write on the check.
if the concern is that workers may be paid less, the solution is simply don't pay less.
If you can demonstrate that happens, to the exclusion of other reasons, publish it. I haven't seen that effect or known anyone to see that effect during such a transition. What I have seen is a lot of bosses cutting wages and blaming everyone but themselves for turnover, and a lot of business owners with an ideological agenda making bad-faith arguments.
The money is already there, and the current situation is that customers are literally giving most of it without obligation. It makes sense to formalize the relationship, and properly allocate responsibilities to the business owner.
The entire debate is a deflection of responsibility for employee compensation.
There don't appear to be any direct studies on revenue, but the GrubStreet article mentions a study by Lynn (2018)[0] which looks at the impact of eliminating tipping on online reviews, which have an impact on revenue (but of course it's difficult to judge, since perhaps not all declines in Yelp scores are equal; maybe in that study declines/improvements in score had more to do with the quality of the food):
> This study examines the effects of such moves away from tipping on restaurant’s online customer ratings. The results indicate that (i) restaurants receive lower online customer ratings when they eliminate tipping, (ii) online customer ratings decline more when tipping is replaced with service-charges than when it is replaced with service-inclusive-pricing, and (iii) less expensive restaurants experience greater declines in online customer ratings when replacing tipping with either alternative than do more expensive restaurants.
> ...
> Given the already ubiquitous and increasing popularity of online reviews, and the influence that such e-word of mouth has been shown to have on consumers’ purchasing/patronage behaviors (see Kim, Li, and Brymer, 2016; Ong, 2012; Zhang, Ye, Law, and Li, 2010), our results also have important implications for restaurants’ bottom-line that warrant being underscored. For instance, in a longitudinal analysis (2003- 2009) of Yelp online reviews and revenue data for every restaurant in the city of Seattle Luca (2016) recently estimated that restaurateurs can expect a 9% increase in revenue for every one-star Yelp rating improvement. Thus, if the results of our study are shown to be reliable and Luca’s (2016) estimate generalizable then it follows that low and moderately priced restaurants that decide to replace voluntary tipping with either automatic service charges or service inclusive pricing can expect to experience a nontrivial loss in profits as a function of lower online satisfaction ratings.
The paper notes that raising prices whether through services charges or what will be a price increase for a significant percentage of the clientele:
> Additionally, tipping is a form of voluntary pricing and price discrimination that results in approximately 25 percent of customers tipping less than 15 percent of bill size and 65 percent of customers tipping less than 20 percent of bill size (Lynn, 2017a), so replacing tipping with service charges or service inclusive pricing will raise dining costs for a quarter to half of restaurant customers and this is likely to reduce the overall satisfaction of those customers.
One restaurant that had switched to no-tipping before abandoning had tip averages of 21%.[1] I don't know anybody who tips that much, but apparently they exist. But if you increase prices by 21% on all clientele, then the restaurant becomes more pricey compared to restaurants that do tipping. Someone who would have tipped 15% might just go to another restaurant and tip that much, whereas a particularly generous tipper who would have paid 25% to make the average about 20% between these two is now just paying that 21% price hike - that's an overall decline in revenue. And the restaurateur said his mistake was not raising prices high enough to cover both the waitstaff wages that they had been getting from tipping ($25-40/hr) and raises for the back-of-house staff; he says he should have raised them 40%! Perhaps he could have done so, but it seems likely he would have been doing less business and had to downsize.
But OK, let's assume that somehow restaurants earn the same amount of income as before with hiked prices and no tipping, and that extra income is paid to the staff. If any money goes to the back-of-house staff, that means that the waitstaff would be making less than they did before. Do you think it's reasonable for waiters to be making $25-40/h while the kitchen staff is making $13-20?[1] I don't particularly think it is, and if tipping culture eventually ends (which, make no mistake, I am no fan of tipping), we would see waitstaff being paid less because now they can't switch to a restaurant where they can make more than tips, but we might see kitchen staff make more. However, this would necessarily mean that waitstaff are making less money.
You're still talking about administrative decisions to compensate certain workers more or less. Again, if there is concern about workers being paid less, the solution is to not lower their compensation.
I have no problem with raising back-of-house wages, they are typically undercompensated compared to front-of-house, even though the work is comparable and all of it counts towards the dining experience. Raising kitchen wages does not necessitate lowering server wages, and suggesting it does only encourages division and confuses the situation. It is worth noting that tip pooling with kitchen staff is standard practice in many restaurants despite being flat out illegal until recently, so the situation you fear already exists, and could be remedied by moving away from a tipping system to explicit wages.
Again, it is worth formalizing the relationship and clearly allocating responsibilities.
> Again, if there is concern about workers being paid less, the solution is to not lower their compensation.
Then kitchen staff will continue to be paid poorly. Just understand that's the tradeoff.
> Raising kitchen wages does not necessitate lowering server wages
How?
> It is worth noting that tip pooling with kitchen staff is standard practice in many restaurants despite being flat out illegal until recently
It's still illegal in many states. Meyer, one of the restaurateurs who switched to no-tipping and back, is in New York, where it's illegal both to add a service charge and to collect part of the tips to share with kitchen staff. Switching to no-tipping allowed him to compensate the kitchen staff more fairly, at the expense of the departure of his entire waitstaff.
>Then kitchen staff will continue to be paid poorly. Just understand that's the tradeoff.
If it’s a tradeoff it’s only a tradeoff that management chooses to make.
>How?
How what? It’s a business operating within a market. They will do something.
None of this is a binary mechanistic outcome determined by a boolean of tipped or untipped service. The restaurant has a budget and they will spend money and set prices as they think best, and succeed or fail based on that. There is no law that dictates zero-sum competition between kitchen and server wages, and all else static! Clearly in a market in which tipping is not practiced, a business will behave differently than the current market, and employees will expect appropriate wages.
>meyer etc etc
this is still another case of an employer making administrative choices about how much to pay different workers, and workers reacting to those decisions. if the waitstaff were given an equivalent or better wage to their previous wage+tip compensation, they would have had no reason to depart. this was explicitly not the case: the servers left because the transition gave them a pay cut.
it makes no sense to blame tipping or not tipping for bad budgeting and failed wage negotiations. the issue is in the allocation, not the concept.
again, this is a case of employers deflecting responsibility for compensating their employees.
the economic calculus of a restaurant does not massively change based on a switch from tipped service to untipped service. there is still money coming in and food going out.
i am advocating that employers be held responsible for paying their employees. the current tipped service regime fails to attribute that responsibility to employers, and leaves employees vulnerable.
i have seen no-tip service implemented in a way that satisfied employees. i have seen also it done in a way that drove staff to quit, and in those cases the fault lay entirely with management trying to reduce compensation.
stop asking questions about a fantasy budget. i do not care. if tipped service was abolished tomorrow, employers would figure it out.
> i have seen no-tip service implemented in a way that satisfied employees.
Have you seen no-tip service implemented with waitstaff earning as much as they did before?
> if tipped service was abolished tomorrow, employers would figure it out.
Of course they would figure it out if tipped service were abolished. But I am confident the outcome of whatever they figured out would result in lower take-home pay for waitstaff, as waitstaff would no longer be able to earn more money by switching to an establishment that allowed tips.
I don't doubt that equivalent compensation is necessary to get waitstaff to stay. I do doubt that it's possible for a restaurant to switch to no-tipping, offer equivalent compensation, and pay the kitchen staff more equitably.
if the concern is that workers may be paid less, the solution is simply don't pay less.