Labor costs are already entirely on the customer. Employers don’t pay their employees with money that grew on trees; they’re paying with a chunk of the business revenue, all of which originated from the customers to begin with. There’s no functional difference in the finances between abolishing tipping but bumping up all your prices or maintaining tipping, except that tipping represents one additional exchange of money, and people don’t like that. When people have already decided to buy something, it feels bad to be asked for money a second time, even if, in the alternative situation where that expense was included in the original price, they’d be spending the same amount of money.
When people have already decided to buy something, it feels bad to be asked for money a second time
Sounds like a functional difference to me that impacts the transaction. And the psychology involved is more than that because most people are manipulated by the up front prices and don’t properly factor in the more hidden secondary fees. Not to mention that when it comes to tips this second ask is technically voluntary and just against social and moral expectations to refuse, so it essentially rewards the people who don’t care about the employees and refuse it.
It is meaningful, I agree, but the objections should be on that basis, not that tipping represents some kind of gross economic injustice. I think, fundamentally, being asked for money feels bad, and people are trying to re-interpret that as some kind of injustice imposed on them, rather than acknowledging that it’s just a slightly different and mildly annoying way to distribute essentially the same cost. When you actually poll tipped workers, they tend to be against removing tips because it allows them to make substantially more than a fixed rate would.
I don’t want to blame the individual too much, but it’s really not that hard to factor in a potential tip into your decision making process, or to simply hit $0 on the iPad if you don’t think the interaction merited a tip (no, I’m not going to tip you for ringing up a bag of coffee that I picked up off a shelf at a cafe, for instance). My loose understanding is that customers have started to reduce or decline tips for a lot of these more trivial interactions, so I’d expect some kind of market equilibrium to emerge at some point. It does somewhat represent those more easily guilted or manipulated effectively subsidzing those who aren’t, which is perhaps a little iffy, but I’m not really gonna shed any tears over it.
An incredibly common complaint when people discuss tips is the perceived injustice of having to pay employees’ wages when the onus of that should be on the employer. It’s literally been brought up in this thread multiple times, including the comment I replied to.
So no, I’m not actually that convinced that people really understand it. While there is a social and psychological difference in tips vs raised prices that is meaningful, the economics are essentially the same, so appealing to some sense of economic justice really doesn’t make sense. People continuously talk about how employers simply need to abolish tipping and pay their workers more, seemingly unaware that that would be directly financed by higher prices roughly equal to the tips they’re already paying.
Labor costs are already entirely on the customer. Employers don’t pay their employees with money that grew on trees; they’re paying with a chunk of the business revenue, all of which originated from the customers to begin with. There’s no functional difference in the finances between abolishing tipping but bumping up all your prices or maintaining tipping, except that tipping represents one additional exchange of money, and people don’t like that. When people have already decided to buy something, it feels bad to be asked for money a second time, even if, in the alternative situation where that expense was included in the original price, they’d be spending the same amount of money.
Sounds like a functional difference to me that impacts the transaction. And the psychology involved is more than that because most people are manipulated by the up front prices and don’t properly factor in the more hidden secondary fees. Not to mention that when it comes to tips this second ask is technically voluntary and just against social and moral expectations to refuse, so it essentially rewards the people who don’t care about the employees and refuse it.
It is meaningful, I agree, but the objections should be on that basis, not that tipping represents some kind of gross economic injustice. I think, fundamentally, being asked for money feels bad, and people are trying to re-interpret that as some kind of injustice imposed on them, rather than acknowledging that it’s just a slightly different and mildly annoying way to distribute essentially the same cost. When you actually poll tipped workers, they tend to be against removing tips because it allows them to make substantially more than a fixed rate would.
I don’t want to blame the individual too much, but it’s really not that hard to factor in a potential tip into your decision making process, or to simply hit $0 on the iPad if you don’t think the interaction merited a tip (no, I’m not going to tip you for ringing up a bag of coffee that I picked up off a shelf at a cafe, for instance). My loose understanding is that customers have started to reduce or decline tips for a lot of these more trivial interactions, so I’d expect some kind of market equilibrium to emerge at some point. It does somewhat represent those more easily guilted or manipulated effectively subsidzing those who aren’t, which is perhaps a little iffy, but I’m not really gonna shed any tears over it.
We knew that, no need to comment about it.
An incredibly common complaint when people discuss tips is the perceived injustice of having to pay employees’ wages when the onus of that should be on the employer. It’s literally been brought up in this thread multiple times, including the comment I replied to.
So no, I’m not actually that convinced that people really understand it. While there is a social and psychological difference in tips vs raised prices that is meaningful, the economics are essentially the same, so appealing to some sense of economic justice really doesn’t make sense. People continuously talk about how employers simply need to abolish tipping and pay their workers more, seemingly unaware that that would be directly financed by higher prices roughly equal to the tips they’re already paying.
Or, you know. Tighter profit margins.