Today Ivar’s Salmon House on Lake Union launches its big experiment: Replacing its tip economy—in which servers make most of their income through the discretionary patronage of diners—with a minimum wage increase for all its employees, to $15/hour.
That means no more “Tip” line on checks, people.
In so doing, Ivar’s is leaping all at once to a minimum wage level other Seattle businesses are starting this week to climb up to incrementally, per last year’s City Council vote. It is at the same time revolutionizing the way restaurants do business in this country.
Across much of Europe, Asia, and the Pacific Islands, tipping in restaurants is not expected; service costs are simply figured into menu prices. That’s what Ivar’s is doing, bumping menu prices up by 20 percent. Tips above that will be discouraged, but not outlawed; diners will be able to add a gratuity if stunning service so moves them.
But let’s be honest: Many, if not most, diners will withhold tips guilt-free and be thrilled to do so, knowing that their server is getting paid via more reliable means.
Argue away on which method is better for servers and the service economy, for there are arguments on both sides—most of which were aired during last year’s civic tussle over raising the minimum wage.
That’s an important argument to have, unquestionably. Servers and back-of-house employees need to be compensated as fairly as their bosses expect to be. But here at Nosh Pit, a post from the restaurant critic is predictably bound to focus on a different question: Which method of paying servers will result in the best service?
Study after study has been attempted to answer this, and for every academic abstract asserting that “service quality significantly affects tip size,” there is another which posits “that tips are hardly affected by service quality.” Indeed, most of the research I looked at this week came to some version of the conclusion: This is a very complicated issue and needs to be studied further.
One thing we know for sure is that a rising minimum wage, in municipalities and states across the country, is creating more tip-free restaurant data points every day. The Bay Area alone has seen a number of restaurants go tipless over the last two years, where, the San Francisco Chronicle reported, a couple of intangibles have been immediately felt: An increased sense of equality between front- and back-of-house (whose workers didn’t generally get to share in the tip economy, thus subsisting on minimum wages alone); and a new, more equitable balance-of-power between servers and diners—whose outsized influence over a server’s take-home pay is, in the new economy, more fairly mitigated.
One could argue that a more equitably compensated house creates a happier business, which influences all who patronize it. Another could counter that removing the influence a diner wields over a server is a recipe for being left with wrong orders and lackadaisical water refills, with only the most indirect means—alerting the management, Yelping—of registering complaint.
But are these means of complaining really less direct than stinting on a tip?
It’s a good question, and I’m interested in your feedback. Where tipping is eliminated—will service improve, decline, or stay the same?