Restaurant owners across the country who eliminated tipping have reversed course in droves, to the relief of their staff and the benefit of their bottom lines. As Nikita Richardson documents in Grubstreet, beginning in 2015 numerous marquee establishments from New York to San Francisco instituted no-tipping policies. While their motivations were noble–they liked the convenience and lack of pretense for customers–they didn’t think through how their employees would feel or how they might react.
Andrew Tarlow, an owner of multiple Brooklyn restaurants who recently abandoned his no-tipping policy conceded to staff:
Ultimately, we ended up serving an ideal at the expense of taking care of you, our staff, which is a trade-off I didn’t fully anticipate and am unwilling to continue to make.
One employee of Tarlow’s restaurant group, Marlow Collective, noted:
When we went to non-tipping, we pretty much lost our entire staff that had been there for ten years…You just get a better, well-adjusted employee with tipping…Before we even announced anything, there was buzzing about a return to tips. People were like, ‘Is it true, is it true?’ And, yes, people were very happy.”
The same pattern has taken place across the country. While waitstaff are often portrayed as having little power compared with the often wealthy owners of the establishments they work in, they actually had it in spades. Their actions forced their bosses to change course. Richardson notes:
Without widespread buy-in from other restaurants, it’s just too easy for front-of-house workers to leave to make more money elsewhere.
In other words, because the restaurant industry is fiercely competitive and there are a lot of choices for customers and employees, it’s too hard for owners to collude against workers. The free market enabled waitstaff to earn more money by walking away from the bosses they felt weren’t listening to them. They found other bosses who better met their needs and desires.
Of course government can easily disrupt the way the free market leveled this playing field for employees vs. their bosses. By forcing the hand of restaurant owners with regulations about how they operate their establishments, employees can lose their ability to leave to a competitor offering a better proposition. Owners who don’t want to buy-in will be forced to. Employees beware.
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