Daily Kos reports that Ivar’s Fish Bar, a seafood restaurant chain in Seattle, will stop taking TIPs from customers and raise its employees’ minimum wage to $15 per hour. Of course, they will have to raise prices, which many critics of an increased minimum wage claim will kill small businesses. Not really. The price increase will be 4%, which is much less than most customers would leave as a tip. Rather than paint this as a situation where one or more parties lose, it’s a win-win for all concerned. Employee get a raise. Customers pay less. Finally, the business earns good will with its customers and employees. Ivar’s Fish Bar shows that American businesses can pay a living wage.
Think Progress reports that some businesses are asking their customers to do something very odd: Stop tipping wait staff. Instead, these moral businesses are pricing their food and drink in a way that lets them offer living wages and benefits, which is a common practice in other countries. The article also notes that under the current tip based system, the poverty rate for restaurant employees is three times higher than other workers. If the average tip is 20% and the restaurant raised its price by that amount, we could be confident that hard working people are being properly compensated. Anyone who thinks that paying such a small amount is unfair has another option: Cook your own meals.
I have a new client that we’ll call Fred. He’s worked as a manager in the hospitality industry at the same company for over 10 years. His boss recently put all the wait staff on a tips only pay structure, which is illegal. Fred pointed this out to his boss, who then demoted him to a bartender position that is paid tips only. Fred says that his boss treated him fairly in the past and doesn’t understand what’s happened. That said, he’s getting a resume and moving on. He’s been loyal. He won’t be stupid. In this economy, workers have to be loyal to themselves, especially when bosses steal their wages.