A High Tipping Culture Transfers Risks To Labour Which Should Be Borne By Capital

Americans like to make the argument that tipping engenders good service and that without a significant at risk component to remuneration, employees in the service sectors will lack the incentive to do anything beyond that which keeps them from getting fired. Additionally, a tipping culture allows low minimum wages, which helps create employment.

An alternative view is that an employment structure in which tipping constitutes a high proportion of income, possibly even the majority, transfers to labour risks which should be borne by capital and does not lower costs for customers. It creates excessively low minimum wage expectations and precedents which partly flow to other sectors and erodes the work ethic by creating a gouging mentality in both employers and employees.

One problem with tipping in the US is that expectations seem to have increased over time, to the point where the expected amount is excessive. Expectations also seem to vary across the country.

I went there in the early 1990's and was told 10 - 15% was a good tip for a restaurant. I went back in 2004, gave a 15% tip and got a funny look. I thought I was doing the right thing. It was only when I asked a bartender about it the next evening that I discovered 20% is now normal for good service.

A very low minimum wage of $2.13 an hour plus an expectation of 20% tips is an underhanded way for the employer to pass a significant part of the business risk back onto their employees. Even though US law is that the employer must make up the difference if tips are not sufficient to raise the total remuneration to $7.25 per hour, that is still a very low wage, certainly well below what most employees would expect (and need).

Bad service can hurt a business, but businesses which have good service can also suffer declines in customers and revenue. These are sometimes a result of the economy, but often primarily due to poor management.

The point is that in service industries such as restaurants and bars, where staff are not expected to actively develop the business as a salesman on commission would be, income volatility is a business risk which should be borne by capital. Labour do bear some of the risk due to the possibility of layoffs, however they should not be expected to bear continuous income volatility without participating in capital growth.

Sales jobs typically have low guaranteed income components and significant commissions. But this high proportion of at risk remuneration is reasonable because sales people are expected to actively develop the business as part of their jobs.

Suppose a restaurant has less customers, as AppleBee's probably will now, due to a boycott. That's ultimately the fault of management. But it's the staff who suffer by being paid less because there are less customers to give them tips in the first place.

Even if a restaurant is well patronised, that is no guarantee the expected tip for good service will result in the expected income for staff. There will always be dickheads who won't tip anywhere near 20%, even for good service. There will be foreigners who do not know how much tip is expected. So, the staff aren’t receiving the intended remuneration.

Why should the staff experience volatility of income due to forces outside their control? How does this help maintain a stable society, when employees can’t pay their rent or telephone bill because no customers came into the restaurant, or the few who did were stingy?

A large, expected tipping percentage does not decrease costs for customers. If employees are receiving $20 per hour, with $17 of that coming from tips, the customers are effectively paying their wages via the 20% added to their bills. Higher wages and lower tips would result in the same total bill.

Additionally, tips being a high proportion of wages encourages staff to try to get the customer out as quickly as possible, to maximise the number of tipping customers during the shift. That helps the business owner, but detracts from the customer experience. A good system if you believe restaurants exist solely to make money for the owner and staff, rather than for people to enjoy a dining experience.

Some make the argument that restaurant staff shouldn’t complain about a low minimum wage / high tip balance because a significant portion of their income is undeclared, so they don’t pay tax on it. But do we really want to structure part of our economy around tax evasion?

Put menu prices up 15%, pay staff a meaningful wage, plus a small tip if service was good. Let the business owner take the financial risk, or else give staff shares in the business commensurate with the risks to which they are being involuntarily enjoined.

A second problem with tipping in the US is that it’s confusing and tiresome, because it's ubiquitous. No one will get off their arse and do their job unless they are given extra, because everyone from the taxi driver to the bartender to the doorman to the maid to the guy operating the lift expects a tip.

For example, a porter's job is to take your bags to your room. Why do they deserve $1 a bag or whatever it is from me as well? Why does the maid get a tip for cleaning my room? Just add in the value of the tips to the cost of the room, pay the porters and maids a liveable wage and get them to do their jobs.

When I was in New York a few years ago, I stayed in a small hotel on 11th St. The porter had a key to operate the lift and WOULD NOT take anyone up or down in it unless they tipped him. Seriously.

Had he leased the lift from the building owner, I could understand.

That's the kind of menial job which should just be paid at minimum wage. If the employee won't do it properly, sack them and hire one of the dozens of other people who would apply.

The problem is that such a system cultivates a gouging mentality, where employers screw employees with low wages and employees screw customers by refusing to do their jobs properly (or at all) unless the customer coughs up extra. It devalues pride in one's work and doing a good job out of respect for yourself and others.

The term “work ethic” means a belief that work of itself creates value: that as well as being an immediate economic addition, it is character building. At the very least, the satisfaction of doing a task well has a positive psychological effect, not just on the person doing the task, but as an example to others. People would not work as volunteers for charities without a work ethic.

What is not part of a work ethic is an attitude of refusing to do any task unless paid, no matter how trivial.

The quid pro quo is that societies which desire the creation and / or reinforcement of a genuine work ethic need a commensurate minimum wage regime. Statutory minimum wages for manual labour and low skilled service jobs must be sufficient that employees can afford the basic necessities of life. They must be at a level which says that society values the work done so it mandates that all full time employees’ non at risk remuneration is sufficient to participate in society.

Why would a person continue to work hard in a free society if their effort did not provide them with sufficient income to participate meaningfully in that society? Conversely, why would many people continue to work hard in a society which catered to their needs, regardless of their output?

A genuine work ethic can only survive in a society which says to its citizens: Do your job well and you will be able to afford rent, food, clothing, utilities … all the necessities of life. Do your job without concern for quality and you’ll lose it, together with your access to the above.

My third point against a high tipping culture is that it creates excessively low minimum wage expectations and precedents which partly flow to other sectors. To prove the flow to other sectors requires an academic paper in economics, so I will simply posit it as a thesis and provide a heuristic argument.

A minimum wage of $7 per hour in Australia or the US is unliveable and thus excessively low. It’s all very well to argue that many of these employees in fact receive much more than this, however if the business has few customers, they may not.

In the US, many non tip jobs have statutory minimum wages which are well below Australia’s.

I was recently watching a Four Corners program on homelessness in the USA post GFC. They interviewed a 52 year old family man who had been laid off from his sales job and eventually found some menial, customer facing role at Disney World in Florida. After 2 years, he had received a promotion, which took his pay from $7.40 to $8.20 an hour. He said he takes home $228 per week after tax. His family pays $149 per week rent in a long stay motel. Even converting at the longer term $US/$AUS currency rate of 75 - 80c, his take home pay is around $A300 per week, after his promotion!

His situation is apparently not unusual. There are many people in the US working for $7.25 per hour with no tips. Would this be possible if US restaurant staff received 5 - 10% tips and $15 per hour?

I’m not saying that all tipping leads to negative outcomes.

In some industries, the possibility of a small gratuity as an incentive gives better outcomes than none. This is only in part due to the financial reward. The tip clearly conveys the sentiment that the customer is happy and the staff have done a good job. The value of such emotional reinforcement versus the financial reward should not be underestimated.

Obvious examples are restaurants and cocktail bars (where they actually bring your drink to your table). Tips work in these industries because of the amount of time staff and customers spend in contact and the scope for enhancing the customer experience with advice, attentiveness, a friendly attitude etc. In Australia, it’s 5 - 10%, depending on how happy you are with the service.

Tips also work in other service industries. I’ll tip the hairdresser if I get a head massage. I’ll tip the taxi driver if I have some suitcases and he loads and unloads them for me. There are more “under the table” tips, such as giving your mechanic a case of beer if he goes out of his way to save you money on parts and overlooks the small crack in the windscreen when your rego is due.

To this last end, even if someone is just pulling beers from the tap, if I’m buying a round and the cost is $18.50, I might give the bartender $20 and say: “Keep it”. I do that to establish a rapport with the bar staff. That’s for two reasons: because I drink there regularly or because I intend on having a few and don’t want to be refused service later in the evening.

But most jobs involve some service component. Why don’t we tip the bus driver? Or the postman and the garbos? Or the polite and knowledgeable employee who spent 20 minutes showing us televisions before we made up our mind? Or the bank manager who made the effort to process our home loan application quickly?

Because that way lies graft and corruption. Very soon, tips will become expected, then required. Wages will fall in real terms and everyone will have to be paid extra just to do their job, which means tax revenue will also fall. Discounts will be available to people who tip, affecting employers’ profit margins and hence taxation revenue and employment. This is how things (don’t) work in many parts of Asia, Africa and the Middle East.

Jeremy Fernandez Should Have The Legal Power To Have Thrown His Tormentor Off The Bus Himself

Harking back to “the good old days”, when “things were better” is a common caricature of older right wingers. However, there are some aspects of our society and its rules (written and unwritten) which have definitely degenerated.

It used to be that if a troublemaker began behaving in an aggressive and confrontational manner, at least one bloke present would take it upon themselves to summarily sort the problem out. Moreover, said bloke would have been inculcated with the ethic that the “sorting out” must be proportionate to the trouble.

The specific incident which prompted this post is the racial abuse of ABC newsreader, Jeremy Fernandez on a bus to Marrickville.

What should have happened in a sane, liberal society is this:

The bus driver should have stopped the bus, walked down and asked what was going on. After briefly listening to both sides, anyone with even half a brain could have worked out that Jeremy Fernandez had done nothing wrong and had, in fact shown a level of restraint which many would not.

The driver should have then ordered the woman off the bus. Had she refused to go, he should have physically thrown her off, followed by her two brats. If he didn’t feel comfortable doing that, Jeremy Fernandez or another physically capable passenger should have felt sufficiently confident in the righteousness of their actions to have done it instead.

There were ways to remove the woman from the bus without actually physically throwing her off. For example, pick up her handbag and throw it out the door when the bus stopped. The driver could have said: “I’m driving off now. Whether you want your bag back is up to you.”

Any subsequent complaint by the woman to either the police or Sydney Buses should have resulted in brief interviews with Fernandez and the driver, then the matter deemed closed.

Had the woman refused to get off the bus and no-one felt sufficiently confident to throw her off, at the very least, the driver should have told the woman that he was radioing police to come and meet the bus, then told Fernandez to come and sit near him until then.

What actually happened was this:

The bus driver told Jeremy Fernandez to either move or get off the bus, then told him the situation was his own fault. He did nothing to stop the woman’s harassment of another passenger; he didn’t even report the incident by radio and ask for advice.

The real problem here is that our society has become so infected with a culture of lies, complaint, false victimhood and grifting that law abiding citizens resile from taking appropriate physical action to protect their wellbeing and amenity, for fear of the unpredictable outcome in a bankrupt justice system.

I feel a lot of sympathy for Jeremy Fernandez, being a public figure in that situation. Suppose he had manhandled the scummy bitch off the bus and she subsequently made an assault complaint, plus repeated the allegations about touching her daughter. The police may well have pursued at least the assault. The matter would probably have made the press, where the woman may well have publicly reiterated her dishonest allegations re touching her daughter.

On top of the financial cost of defending himself and the emotional stress to his family, Fernandez’ reputation would have been traduced. Faced with this possibility, he obviously felt sitting there and taking this shit from an absolute dreg of society was preferable. Additionally, no-one else ever wants to get involved, lest they face accusations themselves.

That is not right. Anyone faced with such behaviour should have the legal right to use appropriate physical force to remove or otherwise silence the troublemaker. If they are incapable of defending themselves, any citizen should have the right to step in and do it for them. Citizens should not have their time wasted or their amenity unreasonably curtailed by being required to wait for the police to arrive to deal with minor matters. Nor should they be required to “turn the other cheek”.

That is how society used to see things … and should again. As for physical force against a woman: you lose your right to be “treated like a lady” when you stop behaving like one.

Section 418 2(a) of the NSW Crimes Act deals with self defence. Unfortunately, all it says is that a person may use reasonable force to defend themselves or others. Against what is not clear.

That is not necessarily a bad thing, as taking an evolutionary approach to the construction of law via common law generally gives better outcomes than a constructivist approach via statute, where every minutia of what is and is not legal must be spelt out.

However, in this case, I suggest s418(2)(a) should state that it is lawful for a person to use reasonable physical force to defend themselves against any crime. That includes s529 - Criminal Defamation (or its equivalent in other states), which all citizens should read and know.

By calling him a paedophile (and a black one, no less!), this woman has criminally defamed Jeremy Fernandez. She should be prosecuted as an example to all others who seek to deal with conflict by telling malicious lies.

There is actually provision in the current law for Fernandez or the bus driver to have dealt with the situation physically: either could have made a citizen’s arrest. However, citizens cannot detain others, then let them go. If you make a citizen’s arrest, you must defer to the police as soon as practically possible … and they will determine the validity of your arrest, with charges of assault and deprivation of liberty ensuing if you are in the wrong.

That’s not what society needs: citizens arresting each other for offensive language / conduct or criminal defamation.

Why should the bus have to be stopped and everyone on it inconvenienced to wait for the police to arrive to deal with such a matter? This woman deserves no more respect than something I’d find under my shoe.

A liberal society should expand the notion of self defence to ensure the right to stand one’s ground and to use appropriate force to protect oneself and others from any criminal act, including threats, harassment and defamation. S419 of the Crimes Act already makes it clear that in claims of self defence, the onus of proof is on the prosecution to prove otherwise.

It essentially comes down to the right and level of legal power of citizens to remove a fuckwit from their presence, with minimal interruption to their planned activities. To force citizens to call the police, then waste time waiting for them to arrive and sort the matter out is itself unjust. To that, add the additional risk of the perpetrator making a false counter complaint and the police doing nothing, or worse, arresting the victim.

That is precisely the type of injustice which flourishes in a nanny state, ruled by lawyers and bureaucrats, where fear of the random consequences of action causes docile citizens to allow “the appropriate authorities” to (not) sort out conflicts.

Extending the scope of the right to self defence as above and retaining the s419 onus of proof on the prosecution is what a liberal society should do. Citizens do not have to demand these civil rights: it is us who determine the rules by which we agree to be governed. That we are over-governed is only due to our consistent failure to organize and prevent it.

If bouncers, many of whom are moronic thugs, have the legal right to use physical force in order to remove troublemakers from pubs, how can law abiding citizens not have the same rights to remove troublemakers from trains, buses, shops etc?

Middle Class Guilt Now Extends To Quinoa

Middle class, university educated lefties tacitly tell us that people who are not white and educated cannot be held to the same standards of responsibility as the rest of us, either on a personal or collective level.

If a white man is a drunk who beats his wife and kids, he is an ogre. If a black man does it, it’s because he’s been oppressed by the racism inherent in our social structure and it is white people who really bear the ultimate blame.

White Westerners who mine coal are environmental vandals. The Asians who buy and burn it somehow escape censure. They wouldn’t if they were white Westerners.

Conversely, the Arabs who mine the oil are not environmental vandals. White Westerners are because of their rampant consumption.

Western societies who gear certain industries toward earning export revenue at the expense of higher prices for their own population have been hijacked by greedy, capitalist buccaneers. Non-Western societies who do the same have been hijacked by greedy, (Western) capitalist buccaneers, who co-opt local elites and oppress the remainder of the indigenous population. If Western societies do it, the corruption is internal. If non-Western societies do it, the corruption is external.

Anyone with even a modicum of non-white ancestry thoroughly deserves all their gains in life. In fact, any achievements are that much greater, having been made in the face of a constant struggle against racism … and if it’s a woman, sexism as well.

Everyone who is white and educated should feel guilty for any gains in their life, particularly material ones. Consumption of any good or service should be accompanied initially by self loathing, then neurotic dithering over which is the most “socially responsible”, followed by an overtly smug air of superiority for making the “correct” choice.

Westerners’ consumption of quinoa is the latest scourge of the noble, oppressed masses, as brown people in Peru and Bolivia suffer malnutrition due to rising local prices for their staple grain.

The original perpetrator of this hand wringing political piety appears to be (surprise) from the Guardian’s stable of secular, lefty preachers. Joanna Blythman churns out textbook cant:

“The quinoa trade is yet another troubling example of a damaging north-south exchange.”

She then goes on to tell us that

“NGOs report that asparagus labourers toil in sub-standard conditions and cannot afford to feed their children while fat cat exporters and foreign supermarkets cream off the profits. That's the pedigree of all those bunches of pricy spears on supermarket shelves.”

Right on, Joanna!

Asparagus is a source of even greater Western guilt than quinoa, because Western consumption is destroying Peru’s water security by effectively importing their scarce water.

So you don’t cook with asparagus any more, Joanna? Or do you only buy it from a “local market”?

Like most university educated, Western, middle class, dilettante lefties, Joanna Blythman is an inveterate snob, only wishing to drink her coffee at “indie, artisan” coffee shops like “Tazza D'Oro in Rome or Caffè Pirona in Trieste”. (I’m so cultured, I even know the best cafes in Italy. Not bad for a Glasgow girl, especially one who’s had a touch of the tar brush).

Of course, if you make lots of money writing books on the evils of supermarket chains and GM foods, you can afford “ethically grown” coffee at boutique cafes.

If you really cared about the environment and the poor people in the third world who will suffer the most from climate change Joanna, you’d have written ebooks. But they don’t sell as well, do they? Fuck the trees and the CO₂ when it comes to paying for my nice house, clothes and furniture, gourmet food and trips to Europe to drink artisan coffee, not to mention my cleaner, gardener, masseuse …

It is of course impossible to expect the Peruvians and Bolivians to be responsible for their own economic management, because they are poor little brown people.

If quinoa farmers respond to undersupply by demanding higher prices and other farmers convert to quinoa, it’s all our fault as consumers that their governments do not use the tax system to purchase a quota of quinoa for local distribution at subsidized prices, or establish national corporations to guarantee minimum prices for quinoa growers and manage the exports. Isn’t the latter the type of economic model lefties advocate?

Why are Peruvians and Bolivians not responsible for their own economies? Why are their farmers not responsible for their own choices? In fact, for many quinoa farmers, it’s the first time in their lives they have made decent incomes, as even the Guardian tells us.

Why are their governments not responsible for stabilizing local prices?

“Oh, but those countries are ruled by oppressive elites, co-opted and kept in place by American corporate imperialism.” Actually, it’s Spanish imperialism which installed the elites in Peru and Bolivia. The Inca weren’t exactly a free, egalitarian society either.

There probably are already comparatively wealthy Peruvians and Bolivians making good money from quinoa exports. However, the Guardian article quotes a Peruvian farmer, who tells us that she now sells her quinoa for $2 / kg, up from 25c / kg a few years ago. So it does appear that poor farmers are also benefiting from increased demand and making a conscious choice to cultivate for export.

If people in towns and cities want subsidised quinoa, they need to advocate for that economic policy. However, that’s the Peruvians’ and Bolivians’ business.

The development of stable, liberal democracy has almost always required the growth of a large middle class, many of whom ultimately come from the agrarian sector. As these sections of society gain more economic power, they are able to successfully demand more political power.

Is Joanna Blythman suggesting we halt the economic growth and hence true enfranchisement of Peruvian and Bolivian farmers? Because that will be the outcome if Westerners decrease their quinoa consumption to the point where it has a material effect on prices. Does she believe it is our role to decide on the appropriate distribution of income and wealth in Peruvian and Bolivian society?

Here’s what will really happen:

Western countries with high plains like Canada, the USA and Australia will start growing quinoa for both domestic and export markets. The price of quinoa will fall and eventually fluctuate (in real terms) in a semi stable interval, sporadically jumping if harvests fail. Local quinoa prices in Peru and Bolivia will fall and domestic consumption will again increase.

The lead time on this will probably be five to ten years, unless quinoa is actually just a fad and returns to a niche food, in which case prices will fall rapidly as people like Joanna Blythman encourage their dopey followers to eat the next, latest “super food”.

Does Joanna Blythman really want to deny Peruvian and Bolivian farmers this probably once off opportunity to permanently increase their wealth? To buy better goods? To have better houses?

No, we want them to stay poor and disenfranchised. Otherwise, there will be no victims of American, corporate imperialist oppression for us to champion.

I wonder who Joanna Blythman would blame if her heroic Palestinian farmers succeed in creating an export industry and drive up local prices.

The Jews, of course!