Somewhat related, but perhaps not quite. If you went to a restaurant and ordered a $1,000.00 bottle of wine (or any expensive bottle(s) of wine), would you take the wine into consideration when tipping?
Of course, if you can afford a 1k bottle of wine you can afford to tip 18+% for it.
Yikes. At the risk of further taking away from IMF's great collectibles I can't believe Cal would be judged over a tip he left 20 years ago. Anyone know what the minimum wage was in '88?
Glad this thread wasn't about Albert Pujols tipping habbits. We would have WW3 by now if anybody suggested he wasn't a good tipper. In Cal's case it simply appears he left a modest tip 20 years ago. His later tip seems very generous. Being that we do not know what he tipped any of the other thousands of meals he has eaten out I don't think we can extrapolate if Cal is a good tipper or not. However, I am sure Pujols tips more.
Contrary to popular belief, tipped employees do not make standard minimum wage. In most states, the minimum wage for tipped employees is only half of the minimum wage for everybody else, so most servers and bartenders are looking at making around $3 per hour not including tips. If tips are claimed by the employees like they should, they usually will not even get a paycheck because whatever little hourly they receive will be applied to taxes paid on the tips they made. Therefore, the only money a server or bartender makes is the money that you tip them.
Some time ago, the restaurant industry in the U.S. figured out an ingenious way to pass server salaries onto the customer. It actually works out to the advantage of the restaurant, the employee, and the customer. The restaurant gets significantly reduced labor which allows them to keep their prices reasonable. The employee gets to walk away with cash in their pocket every night, and the customer ends up saving money because if the restaurant had to pay the 20% you are tipping to the employee, the price of food would need to increase by about 60% in order to hit labor cost goals.
The arguments against tipping (e.g. Mr. Pink) are ludicrous. You would be looking at paying $16-$20 for a burger at TGI Friday's if they had to pay their employees what they are worth. Instead, you pay $10 plus a $2 tip.
<< <i>Anyone know what the minimum wage was in '88?
Contrary to popular belief, tipped employees do not make standard minimum wage. >>
That's where I was going with my comment about the minimum wage in '88. If a person is making $3.35 at best a $4 tip doesn't look so bad. If the person is making 1/2 of that it looks even better.
in Washington state we have one of the highest min. wages in the country - $8.60 per hour - and tipped employees start at the min. wage rate so that's a nice base pay if you are making good tips on top of that.
in Washington state we have one of the highest min. wages in the country - $8.60 per hour - and tipped employees start at the min. wage rate so that's a nice base pay if you are making good tips on top of that.
Wow, that's insane. I can't imagine what my restaurant's prices would have to be if we had to pay bartenders and servers almost $9 an hour. We'd probably be looking at $6 Budweiser's and $15 wings.
If I remember correctly we made $2.13/hr + tips back in the day. That was at the restaurants/bars I worked at in Maryland and Delaware.
Collecting Interests: Ripken, Brooks & Frank Robinson, Old Orioles, Sweet Spot Autos, older Redskins - Riggins, Sonny, Baugh etc and anything that catches my eye.
My ghetto sportscard webpage...All Scans - No Lists!!! Stinky Linky
Servers get I think $2.85 an hour here...not sure how the recent wage raise affects them or if it doesn't effect them. Tipping is part of a servers wages.
Collecting PSA graded Steve Young, Marcus Allen, Bret Saberhagen and 1980s Topps Cards. Raw: Tony Gonzalez (low #'d cards, and especially 1/1's) and Steve Young.
<< <i>Servers get I think $2.85 an hour here...not sure how the recent wage raise affects them or if it doesn't effect them. Tipping is part of a servers wages. >>
Edit to add: If the server does not claim enough tips to make minimum wage, the restaurant has to cover the difference. So they usually make their servers claim most or all of their tips.
Collecting PSA graded Steve Young, Marcus Allen, Bret Saberhagen and 1980s Topps Cards. Raw: Tony Gonzalez (low #'d cards, and especially 1/1's) and Steve Young.
<< <i>in Washington state we have one of the highest min. wages in the country - $8.60 per hour - and tipped employees start at the min. wage rate so that's a nice base pay if you are making good tips on top of that. >>
That's just wonderful - I wonder how many restaurants "don't open" and jobs aren't created because businesspeople decide they can't make money.
Just like the high minimum wage keeps too many entry level jobs out of the workplace, and raises production costs so that we windup buying too many goods from China and other countries because too many businesses can't compete - America needs to smarten up and it had better be quickly.
Why shouldn't someone be able to work for say $5.00 an hour if they want to? Isn't that better than no job at all?
P.S. I should have known that was a little toooooooooo much! LOL! (That was the whole team's salary? Maybe???) >>
That is a baseball simulation game. A decent enough estimation of Ripken's value in today's dollars. If you look around that sire, I'm pretty sure Babe Ruth didn't earn $17 million in 1923 either
<< <i> The employee gets to walk away with cash in their pocket every night, and the customer ends up saving money because if the restaurant had to pay the 20% you are tipping to the employee, the price of food would need to increase by about 60% in order to hit labor cost goals >>
My mind cannot figure this one out. Why should it matter if I pay $8 for a hamburger plus a $2 tip or if I pay $10 for a humber and the restaurant spends an extra $2 of that on payroll? Both Wal-Mart and the union grocery stores are able to keep costs low without asking the customer to directly pay the salary of the cashier
<< <i>that's just wonderful - I wonder how many restaurants "don't open" and jobs aren't created because businesspeople decide they can't make money. >>
Based on the failure rates of restaurants that might be a good thing. Tipped employees earn minimum wage and I see it as a good thing. The significantly reduced job turnover offsets a lot of the extra costs to the business owner, significantly more people are able to earn much better incomes and the customers only tip 10 to 15%
My mind cannot figure this one out. Why should it matter if I pay $8 for a hamburger plus a $2 tip or if I pay $10 for a humber and the restaurant spends an extra $2 of that on payroll? Both Wal-Mart and the union grocery stores are able to keep costs low without asking the customer to directly pay the salary of the cashier
You're missing it completely. It's not a matter of where the $2 comes from, it's a matter of me (as a restaurant owner) hitting my target labor cost of 30%. If I have to pay my employees $2 extra for every hamburger sold, I will need to charge $6 more for the hamburger to keep my costs in line and remain profitable. So if I'm paying my employees $2 extra per hamburger sold, I need to charge $14 for those hamburgers to hit my goals and remain profitable. This is why it's advantageous for you to pay the $10 for the burger including tip.
It's not a case where the hamburger costs $10 regardless of whether you are tipping or whether I'm paying the employee that money. If I just start paying my employees instead of them being tipped and not raise my prices, I will not remain profitable because my labor cost will be all out of whack.
<< <i>It's not a matter of where the $2 comes from, it's a matter of me (as a restaurant owner) hitting my target labor cost of 30% >>
Still can't understand why hitting a target like that automatically determines success or failure. The goal of the owner is to turn a profit. If payroll expenses increase exactly the same as revenue, the profits will be exactly the same. If customers stop leaving tips and you start paying higher wages, menu prices would need to increase only as much as what the previous tips were -- and all that money simply gets put into workers salaries
I will accept that there is a chance my ideas are wrong, but it will need a much better explanation
This is why I voted against the minimum wage increase when it was on the ballot. When those wages are increased, do you really think the business owner will just eat that cost because they're nice? No. They will either increase the cost of their product, or go out of business.
The bad part is, the only people who are not smart enough to understand this concept ARE the people making minimum wage, and they just want a pay increase. lol
Still can't understand why hitting a target like that automatically determines success or failure. The goal of the owner is to turn a profit. If payroll expenses increase exactly the same as revenue, the profits will be exactly the same. If customers stop leaving tips and you start paying higher wages, menu prices would need to increase only as much as what the previous tips were -- and all that money simply gets put into workers salaries
You are thinking of profits in terms of dollars. Most businesses think of profits in terms of percentages, and they base success or failure on whether or not they hit their targeted percentages. The closer your percentages get to break-even, the more at-risk your business is.
Essentially what you're asking a restaurant to do is to put money into something (employee wages) and not turn a profit on it. If you ever hit a period where sales dip, you're screwed because you're paying higher labor and not making up for it with revenue. At that point are you going to ask your employees to take a pay cut?
As already pointed out, there could be a lot of other factors involved. Service could've been terrible and Cal could've had someone that left a tip as well. Earlier this year I took a group of over 50 to a conference in the mountains. It was a long day and I was responsible for everything. My wife and I barely had enough time to run and get dinner with our 2 year old. Our server came to the table and asked if I needed more to drink and I said, "A little would be great." He poured maybe a drop of fluid in my glass and walked away. He then turned around and said, "You did ask for a little." I may have left him a $.01 tip if anything.
<< <i>Still can't understand why hitting a target like that automatically determines success or failure. The goal of the owner is to turn a profit. If payroll expenses increase exactly the same as revenue, the profits will be exactly the same. If customers stop leaving tips and you start paying higher wages, menu prices would need to increase only as much as what the previous tips were -- and all that money simply gets put into workers salaries
You are thinking of profits in terms of dollars. Most businesses think of profits in terms of percentages, and they base success or failure on whether or not they hit their targeted percentages. The closer your percentages get to break-even, the more at-risk your business is.
Essentially what you're asking a restaurant to do is to put money into something (employee wages) and not turn a profit on it. If you ever hit a period where sales dip, you're screwed because you're paying higher labor and not making up for it with revenue. At that point are you going to ask your employees to take a pay cut? >>
I was a restaurant manager for several years and what Lee is saying is correct. One of my jobs was to keep labor under 18% and food cost under 20%. If restaurants had to pay the servers 100% more, I would have to increase prices by about 40% (assuming about 1/3 of the staff is servers). So instead of an 8 dollar meal where you should leave a $2 tip, I would have to charge you, $10-12.
This works with any business. For example, your city raises its property taxes by 5%. Rentees would have to raise their rent by ~10% to make the same money...on the same principal...or percentage as it is above. If you raised your rent by the same 5%, you would be spending more money to make the same old money....which means you would lose money.
Collecting PSA graded Steve Young, Marcus Allen, Bret Saberhagen and 1980s Topps Cards. Raw: Tony Gonzalez (low #'d cards, and especially 1/1's) and Steve Young.
I was a restaurant manager for several years and what Lee is saying is correct. One of my jobs was to keep labor under 18% and food cost under 20%. If restaurants had to pay the servers 100% more, I would have to increase prices by about 40% (assuming about 1/3 of the staff is servers). So instead of an 8 dollar meal where you should leave a $2 tip, I would have to charge you, $10-12.
>>
But this doesn't change the fact that from the consumer's perspective there isn't any difference between being charged $8, and then leaving a $2 tip, or being charged $10 to start.
Actually it does, there has been alot of market data that shows a lower "sticker" or menu price will entice more consumers. The tip being left is 100% controlled by the customer so if they leave $2 or $1 they don't feel like they have to make the total $10 even if they choose too. Taking away a tip option and increasing prices across the board (unless all restaurants in the state do it) will probably make customers mad even if you explain on "average" they are paying the same money.
It's why alot of pricing uses .99 instead of .00 so as to drop off the bigger dollar number, it has shown to be an effective selling tool.
Currently completing the following registry sets: Cardinal HOF's, 1961 Pittsburgh Pirates Team, 1972 Pittsburgh Pirates Team, 1980 Pittsburgh Pirates Team, Bill Mazeroski Master & Basic Sets, Roberto Clemente Master & Basic Sets, Willie Stargell Master & Basic Sets and Terry Bradshaw Basic Set
Our server came to the table and asked if I needed more to drink and I said, "A little would be great." He poured maybe a drop of fluid in my glass and walked away. He then turned around and said, "You did ask for a little." I may have left him a $.01 tip if anything.
WOW!!!! that seems like a mega over reaction to something that sounded like an attempt to make you laugh... good lord man.. life is too short to take stuff that seriously
Another point I made and didn't elaborate much on is that using Tom's logic, he is expecting a business to spend money on labor and not make any profit on it. This directly contradicts his point that most businessmen are in business to make profit. No one is looking to spend money on anything without profiting somehow.
Therefore a restaurant just opening will need a higher investment/loan for a lower payoff (% wise), leading to lower short term profitability, leading to more restrictive financial constraints, leading to a slower building of the business, leading to a lower probability of staying power, leading to more restaurants failing, which is something that's already plaguing the restaurant industry.
Steve- yes, slaves would be the perfect option although it didn't work out so well for the gang on It's Always Sunny.
Guy- The difference to the consumer would be more like $10 plus tip or $16 without tip.
Morogth- Yes, good point. Even if I could get away with charging $12 for my and pay my employee more and keep my costs in line, the place down the street that sells the same quality burger for $10 without tip will always sell more than me because of the initial perception.
<< <i>Our server came to the table and asked if I needed more to drink and I said, "A little would be great." He poured maybe a drop of fluid in my glass and walked away. He then turned around and said, "You did ask for a little." I may have left him a $.01 tip if anything.
WOW!!!! that seems like a mega over reaction to something that sounded like an attempt to make you laugh... good lord man.. life is too short to take stuff that seriously >>
Probably not the best way to interact with paying customers from my perspective, especially in a community that generates revenue from out of town folks. If you were running a business and had no problem with that then that's cool. From the perspective of everyone else in our group they viewed it as a guy being a jerk.
One thing on Cal, do you really think he put alot of thought on how much to leave for a tip? Since he paid a normal tip amount I don't see the issue, just because he may make more money doesn't mean he owes it ot everyone he meets to give them more money than normal for the same service.
I have an issue with celebs that feel like they should be comped for everything and not pay a dime for anything.
Currently completing the following registry sets: Cardinal HOF's, 1961 Pittsburgh Pirates Team, 1972 Pittsburgh Pirates Team, 1980 Pittsburgh Pirates Team, Bill Mazeroski Master & Basic Sets, Roberto Clemente Master & Basic Sets, Willie Stargell Master & Basic Sets and Terry Bradshaw Basic Set
Comments
Somewhat related, but perhaps not quite. If you went to a restaurant and ordered a $1,000.00 bottle of wine (or any expensive bottle(s) of wine), would you take the wine into consideration when tipping?
Of course, if you can afford a 1k bottle of wine you can afford to tip 18+% for it.
Steve
Ripken in the Minors * Ripken in the Minors Facebook Page
<< <i>Anyone know what the minimum wage was in '88? >>
I remember making 3.50 as a dishwasher in 1988.
Contrary to popular belief, tipped employees do not make standard minimum wage. In most states, the minimum wage for tipped employees is only half of the minimum wage for everybody else, so most servers and bartenders are looking at making around $3 per hour not including tips. If tips are claimed by the employees like they should, they usually will not even get a paycheck because whatever little hourly they receive will be applied to taxes paid on the tips they made. Therefore, the only money a server or bartender makes is the money that you tip them.
Some time ago, the restaurant industry in the U.S. figured out an ingenious way to pass server salaries onto the customer. It actually works out to the advantage of the restaurant, the employee, and the customer. The restaurant gets significantly reduced labor which allows them to keep their prices reasonable. The employee gets to walk away with cash in their pocket every night, and the customer ends up saving money because if the restaurant had to pay the 20% you are tipping to the employee, the price of food would need to increase by about 60% in order to hit labor cost goals.
The arguments against tipping (e.g. Mr. Pink) are ludicrous. You would be looking at paying $16-$20 for a burger at TGI Friday's if they had to pay their employees what they are worth. Instead, you pay $10 plus a $2 tip.
<< <i>Anyone know what the minimum wage was in '88?
Contrary to popular belief, tipped employees do not make standard minimum wage. >>
That's where I was going with my comment about the minimum wage in '88. If a person is making $3.35 at best a $4 tip doesn't look so bad. If the person is making 1/2 of that it looks even better.
Ripken in the Minors * Ripken in the Minors Facebook Page
in Washington state we have one of the highest min. wages in the country - $8.60 per hour - and tipped employees start at the min. wage rate so that's a nice base pay if you are making good tips on top of that.
Wow, that's insane. I can't imagine what my restaurant's prices would have to be if we had to pay bartenders and servers almost $9 an hour. We'd probably be looking at $6 Budweiser's and $15 wings.
Ripken, Brooks & Frank Robinson, Old Orioles, Sweet Spot Autos, older Redskins - Riggins, Sonny, Baugh etc and anything that catches my eye.
My ghetto sportscard webpage...All Scans - No Lists!!! Stinky Linky
Raw: Tony Gonzalez (low #'d cards, and especially 1/1's) and Steve Young.
<< <i>Servers get I think $2.85 an hour here...not sure how the recent wage raise affects them or if it doesn't effect them. Tipping is part of a servers wages. >>
Edit to add: If the server does not claim enough tips to make minimum wage, the restaurant has to cover the difference. So they usually make their servers claim most or all of their tips.
Raw: Tony Gonzalez (low #'d cards, and especially 1/1's) and Steve Young.
<< <i>in Washington state we have one of the highest min. wages in the country - $8.60 per hour - and tipped employees start at the min. wage rate so that's a nice base pay if you are making good tips on top of that. >>
That's just wonderful - I wonder how many restaurants "don't open" and jobs aren't created because businesspeople decide they can't make money.
Just like the high minimum wage keeps too many entry level jobs out of the workplace, and raises production costs so that we windup buying too many goods from China and other countries because too many businesses can't compete - America needs to smarten up and it had better be quickly.
Why shouldn't someone be able to work for say $5.00 an hour if they want to? Isn't that better than no job at all?
>
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<< <i>Steve, I got it here: LINK
rd
P.S. I should have known that was a little toooooooooo much! LOL! (That was the whole team's salary? Maybe???) >>
That is a baseball simulation game. A decent enough estimation of Ripken's value in today's dollars. If you look around that sire, I'm pretty sure Babe Ruth didn't earn $17 million in 1923 either
<< <i> The employee gets to walk away with cash in their pocket every night, and the customer ends up saving money because if the restaurant had to pay the 20% you are tipping to the employee, the price of food would need to increase by about 60% in order to hit labor cost goals >>
My mind cannot figure this one out. Why should it matter if I pay $8 for a hamburger plus a $2 tip or if I pay $10 for a humber and the restaurant spends an extra $2 of that on payroll? Both Wal-Mart and the union grocery stores are able to keep costs low without asking the customer to directly pay the salary of the cashier
<< <i>that's just wonderful - I wonder how many restaurants "don't open" and jobs aren't created because businesspeople decide they can't make money. >>
Based on the failure rates of restaurants that might be a good thing. Tipped employees earn minimum wage and I see it as a good thing. The significantly reduced job turnover offsets a lot of the extra costs to the business owner, significantly more people are able to earn much better incomes and the customers only tip 10 to 15%
EDIT: Nice pieces Ironmanfan!
Steve
You're missing it completely. It's not a matter of where the $2 comes from, it's a matter of me (as a restaurant owner) hitting my target labor cost of 30%. If I have to pay my employees $2 extra for every hamburger sold, I will need to charge $6 more for the hamburger to keep my costs in line and remain profitable. So if I'm paying my employees $2 extra per hamburger sold, I need to charge $14 for those hamburgers to hit my goals and remain profitable. This is why it's advantageous for you to pay the $10 for the burger including tip.
It's not a case where the hamburger costs $10 regardless of whether you are tipping or whether I'm paying the employee that money. If I just start paying my employees instead of them being tipped and not raise my prices, I will not remain profitable because my labor cost will be all out of whack.
Steve
<< <i>It's not a matter of where the $2 comes from, it's a matter of me (as a restaurant owner) hitting my target labor cost of 30% >>
Still can't understand why hitting a target like that automatically determines success or failure. The goal of the owner is to turn a profit. If payroll expenses increase exactly the same as revenue, the profits will be exactly the same. If customers stop leaving tips and you start paying higher wages, menu prices would need to increase only as much as what the previous tips were -- and all that money simply gets put into workers salaries
I will accept that there is a chance my ideas are wrong, but it will need a much better explanation
The bad part is, the only people who are not smart enough to understand this concept ARE the people making minimum wage, and they just want a pay increase. lol
You are thinking of profits in terms of dollars. Most businesses think of profits in terms of percentages, and they base success or failure on whether or not they hit their targeted percentages. The closer your percentages get to break-even, the more at-risk your business is.
Essentially what you're asking a restaurant to do is to put money into something (employee wages) and not turn a profit on it. If you ever hit a period where sales dip, you're screwed because you're paying higher labor and not making up for it with revenue. At that point are you going to ask your employees to take a pay cut?
Ripken in the Minors * Ripken in the Minors Facebook Page
Get some slaves.
Steve
<< <i>Still can't understand why hitting a target like that automatically determines success or failure. The goal of the owner is to turn a profit. If payroll expenses increase exactly the same as revenue, the profits will be exactly the same. If customers stop leaving tips and you start paying higher wages, menu prices would need to increase only as much as what the previous tips were -- and all that money simply gets put into workers salaries
You are thinking of profits in terms of dollars. Most businesses think of profits in terms of percentages, and they base success or failure on whether or not they hit their targeted percentages. The closer your percentages get to break-even, the more at-risk your business is.
Essentially what you're asking a restaurant to do is to put money into something (employee wages) and not turn a profit on it. If you ever hit a period where sales dip, you're screwed because you're paying higher labor and not making up for it with revenue. At that point are you going to ask your employees to take a pay cut? >>
I was a restaurant manager for several years and what Lee is saying is correct. One of my jobs was to keep labor under 18% and food cost under 20%. If restaurants had to pay the servers 100% more, I would have to increase prices by about 40% (assuming about 1/3 of the staff is servers). So instead of an 8 dollar meal where you should leave a $2 tip, I would have to charge you, $10-12.
This works with any business. For example, your city raises its property taxes by 5%. Rentees would have to raise their rent by ~10% to make the same money...on the same principal...or percentage as it is above. If you raised your rent by the same 5%, you would be spending more money to make the same old money....which means you would lose money.
Raw: Tony Gonzalez (low #'d cards, and especially 1/1's) and Steve Young.
<< <i>At that point are you going to ask your employees to take a pay cut? >>
That's what every other business does, usually with reduced hours
<< <i>
I was a restaurant manager for several years and what Lee is saying is correct. One of my jobs was to keep labor under 18% and food cost under 20%. If restaurants had to pay the servers 100% more, I would have to increase prices by about 40% (assuming about 1/3 of the staff is servers). So instead of an 8 dollar meal where you should leave a $2 tip, I would have to charge you, $10-12.
>>
But this doesn't change the fact that from the consumer's perspective there isn't any difference between being charged $8, and then leaving a $2 tip, or being charged $10 to start.
It's why alot of pricing uses .99 instead of .00 so as to drop off the bigger dollar number, it has shown to be an effective selling tool.
WOW!!!! that seems like a mega over reaction to something that sounded like an attempt to make you laugh... good lord man.. life is too short to
take stuff that seriously
Therefore a restaurant just opening will need a higher investment/loan for a lower payoff (% wise), leading to lower short term profitability, leading to more restrictive financial constraints, leading to a slower building of the business, leading to a lower probability of staying power, leading to more restaurants failing, which is something that's already plaguing the restaurant industry.
Guy- The difference to the consumer would be more like $10 plus tip or $16 without tip.
Morogth- Yes, good point. Even if I could get away with charging $12 for my and pay my employee more and keep my costs in line, the place down the street that sells the same quality burger for $10 without tip will always sell more than me because of the initial perception.
<< <i>Our server came to the table and asked if I needed more to drink and I said, "A little would be great." He poured maybe a drop of fluid in my glass and walked away. He then turned around and said, "You did ask for a little." I may have left him a $.01 tip if anything.
WOW!!!! that seems like a mega over reaction to something that sounded like an attempt to make you laugh... good lord man.. life is too short to
take stuff that seriously >>
Probably not the best way to interact with paying customers from my perspective, especially in a community that generates revenue from out of town folks. If you were running a business and had no problem with that then that's cool. From the perspective of everyone else in our group they viewed it as a guy being a jerk.
Ripken in the Minors * Ripken in the Minors Facebook Page
Steve
So, 20% on $20 is $4.00, but really it should be 20% on $18.40 or $3.68.
So Cal tipped around 22%.
"Molon Labe"
I have an issue with celebs that feel like they should be comped for everything and not pay a dime for anything.