Welcome to my point. Your post made it seem like that the employer had to pay the employees less to keep prices down for people to buy goods. I countered to say that was malarkey. Employers pay their employees less because they know that they will make extra money with tips.
Which is paid by the customer, who uses that total bill amount to determine if the food/service was worth the price, thus having a very very real effect on the businesses bottom line. If a customer is willing to pay $20 for a given meal and service, whether that is broken up as $16 for the meal and $4 for the tip, or $20 for the meal is irrelevant from the customers perspective
. That's how much he's willing to pay. The employer must pay the wait staff less money if they are getting that $4 tip since it comes out of the pool of money he could otherwise charge the customer directly
I put that in bold because it's a very key point to this whole thing, but you seem to be utterly missing it. Please tell me you understand that if paying the wait staff a full salary (with no tipping involved) would require charging $20 for the meal, then to give them the same salary *and* the tip, would require charging $24 for the same meal. Everything else being the same, fewer people will come into the restaurant if that were the case. I'm not sure how much more clear I can be about this.
As I said, 'tis an agreement between the two people involved, but don't fool yourself. The action is still nefarious in the sense that an employer is paying an employee below the minimum wage (in most cases) because customers might like the employee's service good enough to tip him or her well. You are now relying on customers to make ends meet, NOT the work put forth to support the employer.
Which is absolutely no different than relying on the customer to be willing to pay a higher price (with no tip) for the meal and paying the waitstaff a higher wage (but no tip money). The customer decides if the meal was worth the price. If it was, they'll come back. If it wasn't, they wont. It's really that simple. The methodology of tips adds a bit of variation to this in that the customer can choose to pay a bit less for his meal this time if the service or product was sub-par, but in the broad scope of the issue, it doesn't make a whole lot of difference. No one's going to come back to a place that they felt was so bad they weren't willing to pay a tip. So the fact that I could get that meal for $16 plus no tip, instead of paying the full $20 isn't likely to affect my decision to come back one bit.
Now, if the employer only wanted $2.50/hr worth of work from the employee, then that would be fair. But, that's not the case, the employer wants $10.00/hr worth of work.
And if the customer decides that the work was worth it, he'll pay that much more. If it wasn't, then it still wouldn't be even if you paid the waitstaff $10 as salary and required no tips from the customers for the service. The tip cost would be included in the meal or whatever up front in that case. Either way, the customer will decide if the total cost was worth what he got.
At the end, it's all about money. As long as everyone gets what they want, no one cares about the "fairness" of it all. That's why people still continue to be waiters/waitresses.
Honestly? People continue to be waiters/waitresses because it's arguably the best paying job someone with little to no job skills or experience can get. There's a reason why waitstaff is overwhelmingly made up of college age kids. It's the kind of job you get while looking/waiting for that "real job" to come along. Occasionally, someone makes a career out of it, but for most people it's temporary work on the way to something more permanent. And compared to the set of jobs you can do while in that skill range, it's very very good pay and flexible hours.
False. Having worked at McDonalds with a boss who cared more about money than her employees, you're painting quite a quixotic picture that conservatives tend to believe.
Yup. In a McDonalds where there are limited amounts of money customers are willing to pay for a Big Mac. I'm asking you to stretch your mind a bit and imagine if there wasn't any limit. The company could make as much money as they wanted to, while still paying as much as their employees wanted as well. It's not intended to be a real world example, but to illustrate the point that it's cost constraints that affect labor costs. I know it's popular to blame greed for these sorts of things, but here's the secret: Everyone is Greedy
. That's what I was trying to get across earlier.
The CREAM factor is always in effect and that's why businesses ship jobs overseas and higher illegal immigrants.
They do so because they can make more money by doing that business overseas than domestically. There are a host of factors that might come into that. Simply blaming it on "greed" is silly. Greed is a constant. Businesses were just as greedy in a year when less offshoreing happened than in a year when more did. What changed was the conditions that impacted their business decisions. Sitting around crying about it and decrying "corporate greed" is completely counterproductive. The correct answer is to find ways so that businesses can make more money while hiring folks in the US than otherwise.
There is never "too much money" where everyone lavishly gives to everyone. Nor, would there ever be a time where people would change their attitudes to deserve and maintain that money, but I slightly digress.
Sigh. As I said earlier, this applies to everyone in the market though. If you could earn twice your current salary by changing jobs to another employer, with everything else staying the same, would you? Of course you would. Because you are greedy. If you could buy something from store A for half the price as the same thing from store B, would you? Of course you would. Because you are greedy. To insist that employers must make less money than they could while you insist on making as much money for yourself as possible, and buying things for as little as you possibly can, is completely hypocritical. You're blaming them for doing the same things you do yourself.
And it's doubly silly because all of these things interact in the market. As long as you want to buy things for as little as possible, you help drive the need for producers of those goods to find the cheapest way to do so possible. As I said earlier, the correct answer isn't to "blame greed", but to find ways to make greed work. Make it attractive to businesses to do business in the US, and they will. And btw, this is a bit off topic because I can tell you that the idea that businesses do this for labor reasons alone is a fallacy. There are a host of reasons for businesses to move their operations. Cost is a factor, but labor costs are rarely the biggest ones. It's usually regulations and/or taxes (or other costs/benefits) on the businesses that drive this, not labor costs.
The link that you are describing is far from accurate. The price of the goods that are being sold has less to do with the employees, but the most beneficial price ratio (highest price for the most number of sales) has everything to do with the customers. I've done some driving to and fro a few states the last two months and I've noticed significant price differences in the same McDonald's meal. Of course you could argue the cost of living factor, but at some point, the manager is surpassing the median and making profit. The more profit the better. At that time, the management has the upper hand because there are no expectations of you receiving reciprocal raises.
Ok. Then why doesn't every McDonalds charge the same high price? Clearly, there is some force that prevents the cost of a big mac from increasing without end. That force is the willingness of the customers to pay for it. And that absolutely has to do with cost of living and relative wages in a given area. If people get paid more, they're more willing to pay more for a big mac, and the costs will go up (not to mention, the need to make more to pay for the higher wages themselves). If cost of living is lower, wages tend to be lower, but the price of a big mac will be lower as well.
If this was not true, then big macs would cost a thousand bucks. They don't. They don't because people wont pay a thousand bucks for a big mac. But if you raised the minimum hourly wage to $2000/hour, they would be willing to pay that much for a big mac. Why? Because it's still relatively the same price as it is right now (about half the price of the minimum wage). Prices for goods are relative to things like wages. The greed factor cancels itself out. All sides are greedy. the problem is that some people don't seem to get this and think that they can play games with the values and somehow improve things. But at the end of the day, someone will decide if the price of a big mac relative to their hourly wage is worth it. Thus, the price of said big mac will tend to stay somewhat constant relative to average wages in an area. It has to if the business wants to stay in business.
Similarly, the relative wages of the people who make the big mac is somewhat constant as well. You can cry and insist that big mac assemblers should make more. And you can even pass a law making it so. But the market will always react to that and adjust that relative cost/value. Same deal with wait staff. It's not how hard you work, or how good you are (or think you are). It's how the customer perceives the value of what you do relative to how much he gets paid for his own labor. You can't get around that fact no matter how hard you try. Edited, Nov 29th 2012 5:46pm by gbaji