Minimum Wage for Tipped Employees – No
Oh yes my friend, it is a tempting and beautiful dream. Anyone who has worked in the hospitality industry has shared the vision. I can remember working my way through college as a bartender and server. Some nights I would lie awake in bed scheming about the day I would revolutionize the restaurant industry, unionize, capitalize, and most of all legitimize this industry. I was sick of hearing people say that I didn’t have a ‘real’ job. I would make sure we all got our justly rewards! Proper payment for services rendered! Vive la revolucion!
That was a very long time ago. While I do still indulge in hopeful, youthful exuberance, I really can’t justify paying tipped employees a standardized minimum wage. On some level sharing this view makes me feel a little like a traitor, but it’s for your own good.
I realize that many parts of the world encourage a non-tipping system. That is all well and good, but have you ever been to a restaurant in the U.K. or Germany. It’s not always pretty. There is very little incentive to provide a guest with a “WOW!” experience. Typically the cast of this movie is a drab, sullen crowd. It is a job, and people show up to provide the minimum level of service because after all, what’s the point?
Service in the states, while it can be a bit lackluster at times, provides a financial incentive. The better the service received, the higher the tip…in a perfect world. Realistically, for every jerk that can’t figure out what 20% is without some technical help, two parties will turn out to be in your favor.
The bottom line is if tipped employees start earning minimum wage guests will tip less, if at all! A server's salary could easily be cut in half. Of course, there is also a very attractive feature to being tipped. That would be cash-in-hand. Everyday, every shift, you have money in your possession that bears some quantitative reflection of your performance. In the long run you will always make more money in tips than gaining a paycheck. Oh, and don’t forget about the tax breaks. Are you claiming all of your tips? You know who you are. Don’t worry I won’t tell.
There is one more very important thing to consider. Most restaurateurs are small business people. Most small businesses don’t have deep pockets like our corporate counterparts. Every day in any restaurant you walk a very thin line between profitability and utter disaster. In a small operation that line becomes more like a tightrope. When you stop to consider operational costs, utilities, leases, believe me the list goes on and on, it’s nothing short of a miracle that small time restaurant owners make money at all. If we were to transition to a minimum wage system it could conceivably double or even triple labor expenses. Effectively, pricing these businesses out of existence. What does this mean to the wait staff? Fewer jobs! Shorter hours! In the end a very small paycheck that probably won’t be subsidized by tips. If there is one thing that small restaurant owners have in common it’s resilience. They survive on determination and spite of all of the odds stacked against them. The result will not be in favor of the server.
We would all like to make more money. It cradles our egos by providing a sense of accomplishment. The one thing to remember is that tipped employees are sales people. The commission is 15-20% of goods sold. So sell, have sales contests, provide an experience to remember, and make sure to build up your regular clientele. You will end up a winner, even on the bad days.
