Comment by ergothus | Hacker News Reader

Comment by ergothus | Hacker News Reader

I had a friend that was a manager at a chain restaurant in Seattle, and we had some interesting discussions.

I'm a big fan of paying a living wage. I'm also not a fan of tipping (just raise the prices and pay people fairly). However, I have no experience in the industry.

He has lengthy (20+ years) experience, from server, bartender, cook, and manager. (all from outside of Seattle - he was a recent transplant) He's a fan of tipping and hates the minimum wage increase.

His experiences (+ fears, hard for me to say which is which) were that: * without tipping, even with the increased base rate, it was hard to get people to show up for the short but intense crunch periods, because with tipping people are used to being able to work a weekend shift and pocket several hundred dollars. * If you aren't in a university area or someplace that would have people with flexible schedules and a need for short bursts of money, you would have hiring issues in general, because people earning minimum wage would just go to a less demanding job with more convenient hours.

One particular area of disagreement - he felt that the national chain's policies made it very hard for him to adjust to Seattle's quirks - rules made to pay $2-$4/hr didn't work here, but he couldn't change them and blamed Seattle's rules. I argued that if the business model didn't work, the answer was to change the business model, but it sounded hollow and elitist even to me (even while I still believe it).

I've talked with a few other acquaintances that have done server jobs and they all echo similar thoughts - even those that hated tipping agreed that they would use it to get a lot of cash on short notice and were skeptical that the current system would survive a transition into a flat wage. What I've not heard is any ideas on how to DO that transition, or if it's worth doing. (I have beliefs, but not facts)

> If you aren't in a university area or someplace that would have people with flexible schedules and a need for short bursts of money, you would have hiring issues in general, because people earning minimum wage would just go to a less demanding job with more convenient hours.

In other words, without tips you'd have to pay people more. But didn't we already know that?

I think the key is you’d have to pay them very significantly more. I have a buddy that can earn $200 in tips in 5 hours on a busy night. Nobody is going to pay a waiter $40/hour.

> Nobody is going to pay a waiter $40/hour.

That's not obviously true.

I have many friends in the restaurant business in Seattle, both on the business and employee side, and mostly not in the national chains (and the national chains that do well in Seattle usually defer employment practices to their Seattle sites). The labor situation has a lot of similarities to software engineers in the big tech cities actually.

The reality is that there is an extreme shortage of restaurant labor in Seattle, so employees have all the leverage right up to the point where it breaks the business. The employees I know have told me that if you want to take three weeks off etc, at this point you just tell the manager because they can't say no or even negotiate really -- they won't fire you because they won't be able to replace you, and they know the employees will quit if they don't say yes and would be employed equally well within an hour of looking.

To make matters even more crazy, there are investors running around Seattle offering buckets of capital to the employees at restaurants to start their own restaurants. I know a few former-employees-now-restauranteurs that have taken the money, and had very tech startup-like learning curves which has been fun to talk about. (Like I said, oddly analogous to tech boom craziness.)

These things ebb and flow. At some point in the not-too-distant future, the businesses will have all the leverage again.

Sounds like the value being extracted from employees was much less than the stress and obligation being put on them. If these periods are very high value to the restaurant owner then over time they'll develop a higher hourly pay for these crunch periods. Another way to implement is a small bonus per table served. These are all solvable problems. But I agree it sounds like his largest argument is "some things will be different" and a bit of fear of the unknown.

If the large chain won't adjust, that seems something that would give smaller businesses an advantage, and seems like a positive to my ears.

As for tipping, people don't tend to tip based on quality of service (see Adam Ruins Everything) [https://www.youtube.com/watch?v=q_vivC7c_1k], and instead tends to be based more on attractiveness and ethnicity. A normal wage is fairer.

The argument though is that not all hours are created equal. If you are working during hours where utilization is peak, i.e. lunch and dinner, then you will make more money than if you were working off hours on a tipping system because you serve more customers regardless of the customer tipping criteria. This naturally incentivizes people to work the more difficult hours by compensating them better for those hours. If pay is flat at the minimum wage, then you incentivize the hours of least utilization where people do not have to work as hard for equal pay or worst case drives people into other easier professions.

Right. That's the issue with moving from tipping to flat wages. Yet the US is one of the only countries that does tipping, and plenty of other professions have this issue in the US, so how do they manage ?

I understand the problem, I want the next step of "how do we get to a less crappy system?"

Nurses commonly bid for shifts. Undesirable shifts pay far more than desirable ones. Christmas morning will pay far more than an ordinary Thursday afternoon.

I guess that isn't exactly flat wages, but it isn't tips either. I think it beats both.

So at the restaurant, early evening on Valentine's Day would pay a lot more than the late afternoon on an uninteresting day.

Total agreement on the fairness. In this case, the tipping issue is that, since it's per table, busy times result in more tip money than non-busy times, which a flat per-hour wage doesn't account for. With tips, a restaurant can get someone to come in for 2-3 hours because they'll be making quite a bit more per hour (even with the unfairness of tips) than if they had a flat wage. At slower times, a shift might be 4-8 hours and not make nearly as much, but the place doesn't need as many staff then.

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