This is nonsense for most jobs, and it's nonsense here too. Very rarely are any jobs treated on pure merit of good vs bad performance. Ultimately it ends up being mostly the luck of having reasonable management and good opportunities. Reasonable management is very hard to come by in the restaurant industry.
And either way, if you wanted to believe the merit-based approach, you're talking maybe the top 5% of servers anywhere making "good" money. Wage theft in the industry is colossal.
I will be pleasantly surprised if the removal of tax on tips does absolutely anything to move the needle for the bottom 95% of servers.
The restaurant industry has been lobbying for this to further avoid the pressure of raising wages and the complication of reporting taxes — the reasoning is out there in the open.
This is the sort of modern shell game where corporate interests further obscure costs to trick the lower class into thinking it's a good deal. It's akin to the math on maintenance Uber drivers tend to fail to do when they're calculating their wages... they're absolutely getting hosed and most of them don't even understand how.
You can just look this up, it's not a secret. Median total pay, including tips, in the US is $32k for waiters. In France, it's €22k. The UK is £23k. Even factoring in health insurance costs — ~4.5k/year for an Obamacare plan — waiters make more in America.
Waiters in the US make significantly more than their British and French counterparts, due to tipping: the US minimum wage is lower than the British and French minimum wages, and despite American waiters being paid at an even lower hourly rate than the US minimum wage, they end up making more due to tips, performing the same job.
The upper 25% of waiters in the US make over $40k a year. Your 95% estimate is very off base.
$32k = 27.5k€, and if we include the insurance numbers you provided: $27.5k = 23.5k€
> waiters make more in America
By apparently 1.5k€ per year? Not a strong argument as it stands and we haven't even begun talking about the lifestyle and workplace differences between the two countries.
Waiters in the U.S. make more, due to tips, despite the U.S. having a lower minimum wage. Do you think American waiters want to make $2k/year less? That's nearly 10% of their income.
And that's before even factoring in the tax benefits, which is exactly what this article is about! No tax on tips means nearly all of that income is untaxed. French waiters pay 11% taxes, and British ones are in a 20% tax bracket. The difference widens even further.
Tips allow American waiters to earn more, and no tax on tips makes them take home even more. Hand-wringing about how the American system pays less than the European one is innumerate.
No, the bottom rate in the American tax system is 10%, it's not untaxed... And that's only for income up to $11k, so the median American waiter is actually in the next bracket up (12%) for the majority of their income (they get $11k at 10%, and $21k at 12%). Similarly, the bottom rate in France is 11%, and is not untaxed. The UK has a 0% bottom rate, but it jumps to 20% well before you get to waiter wages.
No tax on tips will positively affect American waiter wages at basically every level. It's pretty simple math.
For food service, specifically waiting tables - how much of the tip is because of effort and better service - and how much is due to the attractiveness and general demographic characteristics of the server?
I personally top out at 20% no matter what. If the service is lousy I’ll go lower. When servers/bartenders are comping me then I know they get it and will up my percentage.
My daughter works at a mid-tier restaurant 35 hours a week and makes more than my wife who is a math teacher, department head, and has many years of teaching experience.
Eliminating tips and increasing the base wage is a stupid idea. All the talented servers who love the job will leave and mediocre people will replace them.
As someone whose built houses as a contractor and subcontractor for 20+ years, I’d say these article has it mostly right, but misses two major factors in increased costs.
And that is permitting time/costs and the costs of complying with ever more stringent codes.
If we could build homes to the codes of 1990 and the permitting process was the same as it was in 1990, you’d immediately knock 20-30% off of the cost of construction.
What leftists and bureaucrats (and most people in general) never understand is the time value of money. Every extra day added to the construction of a $500K project is a few hundred dollars of interest costs, risk costs, and lost opportunity costs. Those numbers add up quickly. And nowadays, projects take much longer from idea to completion than they used to.
You are agreeing with abundance theory here 100%. The author of the article is one of the Abundance folks. The issues with code and permitting and environmental review take up a substantial portion of the book.
