US Restaurants Drop Tips and Raise Prices to Pay Staff Up to $40 an Hour
Updated
Updated · bbc.co.uk · Aug 24
US Restaurants Drop Tips and Raise Prices to Pay Staff Up to $40 an Hour
3 articles · Updated · bbc.co.uk · Aug 24
Summary
$40-an-hour wages at San Francisco's La Cigale and roughly $30 at New York's Dirt Candy show how some US restaurants are replacing tips with higher fixed pay funded by steeper menu prices.
Owners say the model makes pay more stable and fairer, especially for kitchen staff, while reducing tip-driven disparities tied to gender, race or sexuality.
Higher prices are the main obstacle: Cambridge restaurant Talulla abandoned its tip-free model after raising menu prices 23%, and operators say bigger revenues also trigger more sales tax.
Cornell professor William Michael Lynn says diners often see higher menu prices as simply more expensive rather than tip-inclusive, which can curb demand and make it harder to retain servers who prefer tips.
Even with growing 'tipping fatigue,' Lynn says gratuity-free dining is unlikely to spread widely soon because the economic drawbacks still outweigh the benefits for most restaurants.