On Tipping…

It’s Saturday, so here’s a rant I present for your opinion –

I believe the current trend toward tipping food counter workers will not result in any appreciable benefit to them over the long-term. I think this is nothing but a long-play strategy by employers to increase profits.

Here’s my reasoning –

Right now we perceive tips as “extra.” Like, the workers behind the counter are making $X an hour, and the tips are on top of that. And that might be true… right now.

But, eventually, fast food companies are going to start taking tipping into account when setting wages, either explicitly or instinctively. They’re going to say, “Well, the starting wage is a little lower, but you get tips…” Or they’re not going to raise wages to keep up with the cost of the living, “because the workers get tips now, so that makes up for it…”

What this means is that over a 3-5 year timeframe, I don’t think workers will see any more buying power than they have now. We – the customers – are basically being guilted into paying more, and the employers will slowly and quietly lower their wage costs. In the end, the employee will have no more money, the consumer will have less money, and the employers’ profits will dramatically increase.

To put it another way: tipping is becoming so commonplace that will soon be perceived as just a component of the standard wage, not an extra bonus to the employee.

And ask yourself: who benefits from this?

To take it even further, I absolutely PROMISE you that some fast food chain is going to test the waters eventually and try to classify their counter workers as fully tipped employees. This means they get to pay them $3/hour or something, and the rest is made up in tips. I imagine that the big fast food chains are watching this VERY closely, and I wouldn’t be surprised if there are some backroom deals going on to prod one of the smaller chains from doing a test of it in some markets.

This is the fast food employers’ dream: the customer eliminating a big chunk of their wage expense by effectively just paying more money for the same product. And I’m convinced the trend toward tipping is just a long-play strategy to this end.

I’d love to hear other opinions on this.