Gbaji wrote:
First off. Fixed your statement about what I said. I never said that higher salary for waitstaff would result in lower tips. I've already corrected you on this. I said that higher salary would result in higher menu prices and that this would affect business at the restaurant. Where I think you got confused is that I also made the argument that it was ok to pay a lower salary to waitstaff because the business was effectively paying the waitstaff with tips instead. Thus the business could offset the increased cost to the customer because of the tip by decreasing the salary thus reducing the menu price. That's where we went off on the tangent of you insisting that tips don't matter to the business.
See post 89. You can't have it both ways
You said the following:
1. Customers think TOTAL cost. Regardless if it is $16/$4 or $20/0. The customer will only pay $20
2. In order for an employer to pay their staff full wages, they would have to charge the meal $24 to include the $4 tip
3. Since customers wont pay $24, employers will lose business.
So, according to your logic, employers MUST keep their meals below $16 (example) to allow for the $4 tip, else, the customer will not pay the $4 tip, because the customer thinks in total cost ($20). This is opposed to any logical person with a sense of money managing who segregates the value of the food from the tip of the service, since the service is not part of the food, not necessary and at your discretion.
The second one is a complete fallacy as the tip is based on service, a profitable business may not have to make any changes to make profit and there are several other methods of increasing revenue.
Gbaji wrote:
Your counter about "good value" is irrelevant because "good value" is determined by the consumer by comparing the price to the product and service received. If two meals are of identical quality and one costs less than the other, then that one is a better value. Consumers will tend to buy that one more than the other, and that business will do better as a result. At the risk of repeating myself yet again, this is nothing more than the standard demand curve effect we all learned in econ 101.
I never argued with the correction. Why do you think gratuity is added separately to catering if the value of the food involved encompasses the service. You do realize that cooking the food and serving the food are two different tasks done by two different people working for two different wages right? You do realize in restaurants now, you don't have to have the service to get food?
Do you tip the pizza driver when you order take out?
Gbaji wrote:
Again. Correcting you. I'm not even sure how "how your management affects their pay" fits into this topic at all.
What I said is relevant because their pay affects the cost passed on to the consumer, which in turn affects the consumer's choice as to where to go to eat.
Employer = management. The disconnect is that you have gone so far off tangent that you're arguing something completely different. I'm specifically referring to one scenario and one scenario only. You are talking conceptually over all.
Gbaji wrote:
You're obsessing over the tax/tip thing. My point is that every single thing that adds to the total cost of the meal affects the demand curve for the meal. Period. It does not matter how the bill is structured, if the same meal costs more at one place than another, people will tend to eat at the less expensive place. You are missing the forest for the trees.
I'm not comparing restaurants. I'm not talking conceptually. I'm talking specifically about one scenario in which you have totally gotten off mark. In any case, tips are not part of the bill as it is optional. Just because you decided to tip $5 from a $12 meal doesn't mean that it cost more than a $14 meal with a $2 tip. the comparison is $12 to $14, not $17 to $16.
Once again, only if the tip was added into the bill can you make that claim.
Gbaji wrote:
Nope. It's the same thing I've been saying all along.
We're just discussing two completely scenarios. I'm specifically talking about one scenario, not universally.
Quote:
You argued that the tips shouldn't count and the employer should pay the full wage anyway.
So, if a man filled with the Christmas spirit tips a person $1k, do you adjust their wages?
Gbaji wrote:
If you are willing to pay $40 for a meal total (including tip) then you don't care if that $40 was charged directly to you on the bill, with the waitstaff being paid from that money, or the bill was $35 plus a $5 tip paid directly to the waitstaff. It's the exact same relative value either way. If you decide that the meal isn't worth $40, it also should not matter whether it's a single $40 bill with no tip, or a $35 bill and a $5 tip. You're going to decide if the total value of the food, decor, service, etc is worth $40.
No logical person who knows how to manage money thinks like that. I'm not going to pay more for a meal than what its worth just because it falls within my budget nor will I tip a waiter more than s/he deserves because it falls within my budget.
If your budget for a car is $10k, would you spend exactly $10k for a car that's only worth $4k? So, why should I do that with food?
Gbaji wrote:
but the price was $35 and you're expected to pay a $5 tip, that suddenly you'd be willing to pay that price because at $35 it was a good value, and the tip doesn't count? If so, you're more nutty than I thought.
Given the fact that I'm not obligated to pay $5 no matter how much I'm "expected" to pay, yes I would say that is a good value.
1. 35 < 40, the actual prices of the meals
2. I can choose to tip less than $5, which would be less than $40.
Gbaji wrote:
Whether the waitstaff is paid a full normal wage from their employer and tips aren't a factor, or whether the waitstaff is paid a lower wage but tips are expected, should not make any difference
Your fallacy is that it has to be one or the other.
Quote:
You seriously still don't get this?
This is really simple.....
AS LONG AS THE CONSUMER THINKS S/HE IS GETTING A GOOD DEAL, THAN S/HE WILL CONTINUE TO PAY FOR THE MEAL AND TIP ACCORDINGLY. IT DOES NOT MATTER IF YOU INCREASE YOUR PRICES. As an employer, you can't factor in everyone's "cost limits", because you don't know them. You don't know what those numbers and therefore you can't plan against them. The only thing you can go off of is the price range of your meals. So, therefore, as long as your meals stay within those prices ranges, it is safe to assume that people will continue to pay for them. Just because you decided to order two appetizers, two desserts, non-refillable drinks and decided not to order the 20 oz steak because it would put you over your personal budget doesn't mean that any of those items are outside the targeted price range and/or overpriced. So, therefore an employer can only factor in the value prices of their meals.
Employers don't know how much gas you have to use to get there, so they can't plan against it. Employers also don't know how much you are willing to tip either. The only known factor is the value of the meals.