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Went to a restaurant in LA today and when I got the check I noticed that it was a bit higher than it should be. Then I noticed this 18% service charge. So... We, as customers, need to help pay for their servers instead of the owners paying their servers a living wage. And on top of that they have suggested tip. I called bs on this. I will bet you that the servers do not see a dime of this 18% service charge. [deleted a word so it wasn't a grammatical horror to read]
Even if all the money does make into into the staff's pockets, the owner still averts financial risk by making worker pay a function of sales. An employer must have higher business risks than their staff, because otherwise the staff wouldn't need an employer anyways! This absolutely goes against the high risk - high reward scheme that is common place elsewhere. Want to earn more? Take a risky choice! Just want stable support for your life? Get employed and earn a regular wage.
[face palm] that is an amazingly important point I hadn't thought of / not heard discussed before, about the service fee vs actual increase hourly wages. I mean it's totally obvious now that you said it.
And I really do agree with owners taking the risk if they want the reward. I will only say that there IS a place for balance, and reward for performance. I think the current tip system is tilted WAY WAY WAY too much to the server's risk and needs to go away. I also think restaurant margins are actually too thin to go 100% wage based and put all that risk on the owners. I fear the bankruptcy churn in restaurants would be too much.
And yet it seems to work out in Europe so I'm probably wrong.
In Europe everyone charges what's needed to pay the staff, with varying tip/no tip cultures. There's no added risk. In the US unless everyone suddenly switched at once (eg. making tipping illegal overnight) then the restaurants that increased prices would be taking a financial risk because it might drive customers away.
In truth, food price probably works out about the same anyway.. in the US the menu price has service charges tax and another 20% added on top of that for a tip. In Europe the price on the menu is what you pay. . it already includes everything except the tip, and tipping is voluntary for good service (depending on country, Europe isn't one culture).