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Why American Tipping Culture Is Broken

https://yewtu.be/watch?v=XLG3pX6tNv0

We dug into how American tipping culture got so broken, and the fight to fix it. It turns out that your tips are subsidizing the payrolls of multi-billion dollar chains, while they pay their workers under minimum wage. It's a system rooted in slavery, and pushed by a wealthy restaurant owners onto the rest of us. But there's a growing movement to change it. ----- More Perfect Union is a new nonprofit media org with a mission to empower working people. Learn more here: http://perfectunion.us/ Follow us on Twitter: https://twitter.com/MorePerfectUS Instagram: https://www.instagram.com/perfectunion/ Facebook: https://www.facebook.com/MorePerfUnion

We dug into how American tipping culture got so broken, and the fight to fix it.

It turns out that your tips are subsidizing the payrolls of multi-billion dollar chains, while they pay their workers under minimum wage.

It's a system rooted in slavery, and pushed by a wealthy restaurant owners onto the rest of us.

But there's a growing movement to change it.

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darkseer

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It always amazes me how business owners are portrayed as greedy monsters instead of the pants pissing cowards they most likely are. If you need to raise the prices of your products to give your employees good wages, do it. And customers need to understand that better paid employees means higher prices.

BrikoX

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That's the thing. They don't need to raise the prices to be able to give good wages, they just bribed all the politiciants to make restaurants to be excluded from minium wage requirement to able to pocket all the money themselves.

darkseer

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You make it sound like they're pocketing millions a week, when the typical profit margins for restaurants are less than 5% and max out at 10%.

BrikoX

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https://www.opensecrets.org/orgs/national-restaurant-assn/summary?&id=D000000150&topnumcycle=A speaks for itself.

darkseer

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Fifty seven million over 22 years is pretty tame. Especially considering that the National Restaurant Association has forty thousand members. It would have only taken about seventy dollars a year per member to get to that total.

BrikoX

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First of all, OpenSecrets only list public money as dark money is by definition not known. Secondly, they literally have the best deal possible so they have no reason to spend more money now. They are the only sector that has an exemption from minimum wage laws.

Whatever way you may want to present it they have enough money to pay fair wages. And if they didn't they should close as not viable business venture.

darkseer

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Yet, they shouldn't raise their menu prices because they should have enough money to cover additional wages? With a 5% profit margin? By your reckoning every restaurant in America should be out of business. Yet, you also want our restaurants to follow the European model which serve smaller portions at higher prices. I've said this before and I will say it again. The ills of the US corporations can be laid at the feet of the consumer. CEOs get extremely large salaries and bonuses because they're the scapegoat. Consumers were satisfied with one person taking the blame for a systemic problem that would most likely continue after the poor bastard was fired, but hey at least the company heard you. Small wages for employees? Consumers won't shop here unless we offer what they want for the cheapest price. Even when certain restaurants offered more transparency for why it costs more consumers complain about having to pay for such things as employee healthcare.

BrikoX

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Yet, they shouldn’t raise their menu prices because they should have enough money to cover additional wages? With a 5% profit margin?

I'm not sure where are taking that 5% as it's around 15% in 2023 and double or triple that for franchises.

By your reckoning every restaurant in America should be out of business.

No, but they should re-evaluate their business if they can't afford to pay a fair wage for their employees like every other business on the planet. There are plenty of other sectors that operate on lower margines yet they manage to pair their employees fair wage without subsidizing it with tips.

Yet, you also want our restaurants to follow the European model which serve smaller portions at higher prices.

While it's true that our US portions are typically larger the prices are also a lot higher. The same type of dinner in Europe on average costs around 3 times less while being 30% smaller. So this argument is pure nonsense.

The ills of the US corporations can be laid at the feet of the consumer. CEOs get extremely large salaries and bonuses because they’re the scapegoat.

No I'll lay it where it belongs. At the feet of NRA and their lobbying. Like I mentioned previously, restaurants are the only sector that is exempt from the minimum wage laws. That is insane and it's nice to see it starting to get reversed in multiple states. By the way, the same CEOs privately admit that their profit margins increased in states where minimum wage requirements were introduced...

darkseer

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Ok. Looks like you're using gross profit while I'm using net profit. And I'm not including franchises like McDonalds or Wendys because most of the profits are from franchise fees and the raw products that their franchisees have to buy at a markup. They also don't have employees that rely on tips and their portions tend to be smaller than a meal at, say, a Denny's which does use employees that rely on tips.