Give workers a living wage! Tipping in restaraunts is wage slavery!

I’ve heard it all out here in Oregon. Calls to unionize restaurants have…been mixed at best. But it turns out, changing restaurant serving work to a ‘living wage’ has largely gone poorly. It turns out the people most upset and leaving restaraunts with no tipping and living wage pay are the workers themselves. A great majority of the restaurants that tried it over the last few years have quietly quit the experiment. Eater magazine, one of the most pro-food restaurant and food worker magazines has written up an excellent article ‘Why the no-tipping restaurant model failed‘. Why would workers leave living wages jobs?

It wasn’t that they didn’t try it or fully embrace the idea. High profile restaurants in San Francisco converted to a no-tipping living wage model – Sons & Daughters, Menlo Park’s Flea Street, Cotogna, Faun, and most famously, Zuni. So did restaurants in New York and other major food destinations. I often ran across restaurants in Portland that gave up tipping in favor of a mandatory living wage surcharge. Since then almost all of them have quietly quit and gone back to tipping – save a few holdouts. Why? The workers left.

It wasn’t just the diners that doomed the movement; workers saw lower earnings were also reluctant to embrace the change. At Faun, for example, Stockwell started servers at $25 per hour when the restaurant was tip-free. Even then, he says, it was “virtually impossible” to compete with what servers could make at a “similarly ambitious local restaurant with tips.” If a tipped server could make $40 to $50 an hour, or up to $350 over the course of a seven-hour shift, why do the same work for half the money?

But it wasn’t just workers. Higher costs do have an impact. A UC Irvine study found that for every dollar increase in food cost, it resulted in more than a 6% decrease in full-service restaurant employment. 

It’s not like this wasn’t expected. But politicians and activists ignored the simple economics. The wide-spread reality and economics of tipping is right there for politicians. They could have easily found out by checking W-2 reports, well, assuming workers were reporting all their tips ;). The people who were hurt from these experiments in social restructuring and activism are ironically the workers at these restaurants. They were ultimately those that had to change or lost jobs as the predicted lower actual pay and the extra costs drove away customers played out in the economy.

This is not to say that the tipping model is perfect. It certainly is not. But good intentions are NOT enough and certainly not enough to make industry-changing policy. Unintended consequences have very recently been showing the flaws of many poorly designed and implemented overly naïve activist policies.

Other first world countries like Europe and Japan manage to have very affordable food and restaurant experiences in the most expensive cities in the world without trading livability of employees. I have been surprised to find my meals in Paris, London, and Tokyo were often better, and cheaper, than many I have had in the US. Perhaps we should learn more about how their working systems operate instead of letting activist, who rarely have experience or training, legislate policy.