The Rule of ReciprocationFollow

Except for the "Denny's server is probably poor" part, I agree. I'm likely to tip less at a more expensive restaurant than I am at a cheaper place.

Nope, they're just cougars on the prowl.

Since full time at minimum wage puts one under the poverty line I think it's reasonable to call that person "poor".

...and suddenly you're the guest of honor at the next one?


Edited, Dec 4th 2012 1:30am by Poldaran

I have no idea where they get their numbers (payscale.com, whatever that's worth...) but this seemed relevant.



Edited, Dec 4th 2012 8:33am by someproteinguy

Well, if you continue to be narrow minded, then of course.

If you're talking about a 50+ year old woman, it's possible that she's just working just to be active who already retired from a previous job and married to a 60+ year old husband who is working a similar job to stay active who also retired from a previous job.

Of course, but you don't know that, hence my disagreement with the general assumption that she is poor just because she is working at Denny's.

If you can't tell, I finally finished one of my two hard deadline tasks. I can say with some certainty that modifying some incredibly ugly perl/tk code is one of the biggest pains in the butt. Worse when I didn't write the ugly code to begin with. Gah!



Grats! You'll be super and sub netting in no time.




Yes. Which is based directly on how much the consumers of your product/service are willing to pay for it. If the supply/demand calculation for your steak dinner says that you'll get the ideal return if the cost is $20 (including tip), it doesn't matter how that money is paid out. If it's a $15 meal with a $5 tip, or a $20 meal with no tip, it's the same cost to the consumer and has the same weight when it comes to purchasing decisions. That's why the choice to allow your employees to receive a tip must be balanced with the base salary you pay them.



Yes. That's the supply/demand curve thing that most of us learned about relatively early in life. The less you charge for a single item, the less you make per sale, but the more sales you will have. Similarly, if you charge more, you'll make more money, but have fewer sales. By calculating both lines, you can find the point where they bisect and determine the ideal amount you should charge for a given item. Econ 101 here, right? Both sides matter.



Sure. I think you're going off on a tangent here though. We're not talking about how promotional pricing may affect business, but whether paying waitstaff a full salary plus tip will result in higher priced meals for the consumers that if you pay lower salary plus tip. Everything else staying the same, it does. It's not like the materials cost for the meal is lower if the person serving it is paid $8/hour plus tips versus being paid $3/hour plus tips. But that extra $5/hour must come from somewhere, right?



You are the rare (and perhaps foolish) exception then. Or you're one of those cheapskates who skip out on the tip when it comes time to pay. Most sane people absolutely calculate the likely additional cost of tipping when deciding where to go to eat. You may not sit and do actual math, but you absolutely know that the cost difference between eating at Chilis versus Ruth's Cris is going to include the tip. No one goes in thinking that if one meal is $20 more than the other that it'll just cost them $20 more dollars. They know that it'll cost them that much plus the additional tax plus the higher total tip.

Furthermore, people absolutely make cost decisions based on that when ordering. If you're deciding whether the steak is worth the price on the menu, you are fully aware that there's a tip involved as well. You might absolutely make a different choice if you knew there was no tip involved. And when deciding to go out to eat at all, you're considering the full price of the meal when making that decision as well. No one in their right mind thinks that since the average price on the menu is $50, it'll just cost them $200 dollars to feed four people at said restaurant and think "I can afford $200 bucks for a nice night out for my wife and parents". They think "The entrees are $50. Drinks are $10. We'll probably get that $15 appetizer my folks love. And my wife will probably order a desert for another $15. Dad will order an extra drink too. And after the inevitable questions about why there are no grand kids, I'll order an extra one as well. So that's $290, plus another $25 for tax, plus another $50 for tip, I'd better plan for $400 to cover the price of the meal".

It's not about how much you can afford, or how much is in your pocket at any given moment. It's whether what you are paying for is worth the cost. And most people learn really quickly to estimate the full cost of something when making such decisions. Your argument is essentially that people will pay any amount for something as long as they can physically afford it. But that's absolutely not true. Even though I can afford several different varieties of something, I'm going to look at the cost versus benefit when making my choice. If that wasn't true then Denny's would charge $50 for their breakfast. They don't because their breakfast isn't good enough for people to be willing to pay that much even if they could afford $50. People make choices based on relative costs and quality.



You're not getting what I'm saying. The meal is worth X dollars to the consumer. Period. Assuming all other costs related to putting that meal on the table in front of the customer remains unchanged, then anything that pushes the cost of the meal over X (which may vary by consumer of course) will cost you all profits (and salaries) associated with the sale. If right now you get Y sales per month at the current cost structure (which includes a $3 base salary plus tips for the waitstaff), then paying the waitstaff a higher base salary, without changing the tip structure will result in less than Y sales (unless you were already grossly undercharging for the meals of course).

I'm not sure why I have to explain this. It's basic economic rules understood by pretty much everyone. I'm not talking at all about whether any specific waiter is being underpaid or taken advantage of. I'm saying that it's wrong to simply assume that a lower than minimum wage base pay plus tips is somehow an unfair deal for waitstaff. And given that you seem to agree that waiting is one of the best paying jobs you can get for the skill level involved, I'm not sure what you're really arguing about either.



Um... Because we're talking about pay for wait staff? As you say, the chef gets paid more already. The question is whether it's unfair to pay less than minimum wage for waitstaff who earn tips. My opinion is that it's not inherently unfair at all. Any system that works is acceptable, but to suggest that it ought to be a violation of some kind of human wage rights or something to be paid this way is a bit over the top. If it's so terribly bad, why do so many people choose that type of work over a host of other jobs requiring similar skill? They choose it because they get tips, and the tips vastly more than make up for the less than minimum wage base salary.

At the end of the day, that's really the only thing that matters, isn't it?

Just so you don't think I'm ignoring questions.. I just wasn't going to continue responding if you weren't.



No, you're simply arguing in circles. My point is that everyone is greedy. So therefore, Mc Donald's employers will never pay their employees 100k as you stated. Likewise, employers will not pay their waiters more than a few dollars and cents if they know that their employees will be satisfied with tips.

The problem that you seem to be overlooking is that employers shouldn't be allowed to pay ANYONE below the national min wage. Tips are EXTRA and are not necessary, guaranteed or consistent.



Nope. It's all about the money. You can't have it both ways. You can't say everyone is greedy and operate off of greed and then turn around and say that CEO's don't move their operations overseas because of money. No matter how you cut it, it boils down to money. Customer satisfaction? More efficiency? Unless you're giving it away for free, it boils down to money.

I'm going to assume that you didn't read what I said, since you just restated what I said in more words. You seem to be confused on where we disagree.



Read above..

If that were true, there would be zero manufacturing jobs in the US Smash. Labor costs are a factor, but they really aren't the biggest one. Silly things like power, transportation, and communication infrastructure tend to offset the value of cheap labor in other countries.

Right, that's why you guys fab Snapdragon in Texas. What? Taiwan? Really? They must have a FANTASTIC power grid there.

There's a reason TSMC doesn't stand for Tennessee Semiconductor Manufacturing Company. I'll give you a hint, it's not transportation nor is it the communication infrastructure. That's an example of a fairly complex process where the point you're failing to make might matter at all. One I'd assume you're at least vaguely familiar with. When you start talking about stuff like textiles/apparel/injection molded plastic junk, it's even sillier. Virtually non of that stuff is manufactured here any more.

I had a client a few years back who manufactures a line of sneakers in the US. It probably won't take long to figure out who it is, since they're the only corporation still doing so. The primary thing I did for them was develop more efficient algorithms for sourcing parts from china, when to order to meet factory demand, the best way to load containers from various ports, that sort of thing. It was significantly more complex, but you get the idea. When I asked about the "parts" out of curiosity, it turned out they were completed uppers and soles of shoes, and the only "manufacturing" done at the plants in Maine was basically gluing them together. The cost of the source parts was about $6. The cost of the completed shoe (many of the lines for the company aren't made in the US) was about $7.50. The cost of the assembled shoe made in the us was $14. The *only* reason they continue to operate here is the marketing win. Which is the sort of thing that has value to basically one player in that market as a niche value.

Also, labor costs was not even remotely the biggest factor. Do you know how expensive it costs to build and operate a fab in the US? There's a reason why there's only a handful of them left in the US Smash. And it's not the cost to pay the employees. Welcome to my point about taxes and regulation and licensing costs.

I know exactly how much it costs, in fact. I also know what the largest difference is between doing it here and doing in Taiwan. Labor. The loaded labor rate pert FTE employee in the US is about $19 for semiconductor fab. It's $8 for TSMC. That's the deciding factor. Nothing else comes even vaguely close. It's also the reason fab is gradually moving away from places like Japan, and as the rate gets higher in Taiwan it'll move away from there to Zhengzhou. It's a race to the bottom, it's not complicated. As cheaper markets of sufficiently educated workers open up, manufacturing moves to where they are. That's what capitalism is. If you want to have manufacturing in the US, you have to have import tariffs.



And the breakdown of that cost difference to assemble the shoe parts was that it was mostly labor costs? Kinda missing that part Smash. I'm not arguing that it's not more expensive to manufacture (or even to assemble) things in the US. I'm arguing that labor costs are not always (or even often) the biggest reason for that.

Yes, I understand. You're just completely wrong, which can be trivially established by typing "global trade labor cost" into Google Scholar and reading any of the first 900000 papers returned.