William Street Common is a new restaurant in Philadelphia, and is getting publicity for, we are told, experimenting with a different and (maybe?) fairer compensation model. Owner Avram Hornik pays all of its employees, from the servers to the dishwashers, at least $15 an hour plus paid sick leave and health insurance benefits. There is a 20 percent service charge for drinks, and that goes into a common fund that makes that $15 an hour wage affordable. Money left over at the end of a pay period is divided up among employees based on a point system related to various factors.
Hornik came up with this structure, he says, to deal with the well-debated problems of tipping. “Some people just tip the same amount, but some people base it on how quickly the food was there, whether we were out of something, whether the server was there when they wanted them to be,” he says. “So much of that is out of the control of the individual server… So why would it be fair for the service employee to be responsible for the poor decisions of management?”
Hornik argues that his model “essentially creates a guaranteed floor. But we’re also capping the ceiling,” he points out, because the tipping gets shared equally with all employees. “We didn’t think it was fair [that] in some places you have dishwashers earning 10 dollars an hour and the bartender earning 30 dollars an hour.” He also is convinced that the customers will benefit. “That atmosphere among the employees, a sense of community and empowerment and happiness with the job, is going to translate into a better environment for customers,” he said. “By having happy staff customers are going to be happier too.”
Is this system really fairer than the current one? Progressives are cheering it, because it represents a “living wage,” or at least something close to it. OK, but it would be nice not to feel hyped: ThinkProgress, for example, had headlines that the William Street Common “got rid of tipping” and writes “tips aren’t mandatory.”
Inept reporting or lies, take your pick. A 20% “service charge” is a mandatory tip, so tips ARE mandatory. The reports don’t explain how voluntary tipping has been eliminated, or whether a server would be prohibited from keeping a ten-dollar bill that a diner hands him, saying, “You know, the food was lousy, but you were so gracious and accommodating that you single-handedly made the evening bearable. Thank you. If I ever come back, it will be because of you.” If so, is that fair? I don’t think so. In fact, it’s exactly as unfair as a diner not rewarding excellent service, and tipping a dime.
As far as I can see, the owner’s plan embraces socialist/communist versions of fairness over core American values. Why is it fair that a dishwasher should get the same salary as a server? Karl Marx thought it was fair; I don’t. Anyone with hands can wash dishes. Serving requires interpersonal skills, training, quick thinking, problem solving, in short: ability and even talent. It’s not fair to reward that? It’s not fair to give employees an incentive to develop those abilities? It’s not fair for those who don’t want to work hard enough to develop such skills to be compensated less than those that do?
In bolstering Karl Hornik’s claim that his system is fairer than merit-based tipping, ThinkProgress helpfully points out that studies show that such factors as attractiveness and race affect tipping. I bet hygiene and manner have an effect too. Yes, it’s true: biases inevitably come into play along with freedom and choice, and progressives like Hornik will take away those choices to avoid bias every time. If I prefer to have my food served by an attractive server with a pleasing voice and pleasant manner, well, how unfair of me, and how unfair if he or she is able to profit from the benefits of good genes, a fortuitous upbringing, and maybe some hard work. The United States culture hasn’t and shouldn’t adopt this version of fairness.
I strive to help build a society in which everyone does their best to be exemplary at their jobs whether they are compensated for it or not, but capitalism holds that most people need to see something in it for them, and that’s the way of the species, more the pity. I doubt that Hornik’s (okay, he’s Avram, not Karl) formula is going to result in happier servers and good service, but I wish him luck.
When I go to a hotel and order room service, I usually don’t tip the server because there is a mandatory 20-25% service charge that given the obscene mark-up on the food, is already generous. Nonetheless, in pursuit of the voluntary tip, those servers usually act like Jeeves in a Wodehouse novel, and sometimes, if it’s early enough and I am impressed with the server’s manner, I will add something to the bill. If, however, the 20-25% were not going to that server, and if I were not allowed to reward exemplary service, do you think the server would be begging to pour my coffee? Do you think she would be happier, knowing that it made no difference how well-groomed, pleasant or fit she was, I couldn’t show that she brightened my 6 AM meal away from home by rewarding her hospitality skills even if I wanted to?
I don’t. I don’t think Hornik’s way is fair, just a different sort of unfair, and one that will lead to happy dishwashers, and crummy service.
But I hope I’m wrong, William Street Common.
The market will decide.