Reason #4 Why I Love To Blog -- November 11, 2015

Updates

November 12, 2015: my hunch is that a lot of minimum wage folks are going to be re-thinking that $15 minimum wage. I find it hard to believe the the staff can't get at least $15/hour in tips. A table for four probably runs about $50; a 15% tip would be $7.50. Certainly a waiter/waitress takes care of more than two tables/hour. And it's my hunch that a lot of folks tip much more generously than 15%. Regardless, groups are automatically charged 18% in many restaurants.

The staff is also going to be introduced to the IRS. Yes, I know the IRS has clamped down on reported of wages of waiters/waitresses, but my hunch is that tips are still under-reported. Whether they are or not, it is now going to be a lot easier to track wages if tips are out, higher wages are in. There are additional issues, but that's enough for right now. But $15/hour is $600/week for a 40-hour work week; not back for someone living at home with few expenses and parents paying for ObamaCare until the child is 26 years old if the employer does not take care of health care costs.

Everybody agrees that $15/hour minimum wage will reduce the number of jobs available, but that's not the issue here. 

Original Post

 

I don't think it was more than 30 minutes ago that I posted by thoughts on the $15 minimum wage. The original post is time-dated at 12:00 noon, an hour and half ago, but in fact, I posted the "minimum wage" story about 1:00 p.m. as an add-on.

Now, at 1:34 p.m., about a half hour later, while listening to talk radio news here in Texas, it was announced with some fanfare that Joe's Crab Shack was eliminating tips and will go to a straight wage for all employees. I will try to find the link. A spokesman says the cost of meals will probably go up by about 15% but the change will probably result in overall better staffing and lower costs for the restaurant overall.

Bingo.

Here's a link:

The topple-tipping movement has scored an unexpectedly huge supporter: The head of Ignite Restaurant Group has revealed to investors that its Joe's Crab Shack locations are testing a gratuity-free model. Right now the trial is still smallish — 18 restaurants, the trade mag Restaurant Business notes, with more on the way — but nonetheless significant if it establishes a model that casual mid-range chains can follow.

Under the policy, servers start at a flat $14 an hour, instead of $2.13 plus tips, and menu prices rise by 12 to 15 percent to compensate. The good news for generous tippers, which Adam Platt and others have already explained in the abstract, is that the max increase is less than their usual gratuity, so these customers will actually see price cuts.

Ignite CEO Ray Blanchette said it made sense for Joe's to get rid of tipping because the seafood chain serves so many big groups, and waiters dislike having to double up on tables and split tips.

The test phase is expected to run through at least the end of the year. Blanchette says that because it's a big, bold step, he isn't rushing things: "We're really leading in our industry with regards to national brand going out and testing this thing in a meaningful way. So we want to be somewhat cautious."

We have a Joe's Crab Shack within biking distance but to the best of my knowledge we have never visited a Joe's Crab Shack anywhere.

As long as I'm digressing, I might as well add this. I generally pay for restaurant meals with my credit card but I always leave the tip in cash. I never (with some exceptions, of course), never write in the gratuity and then add it up.

If every restaurant follows Joe's lead, my monthly credit card bill is going to drop significantly, all things being equal.

By the way, I have many reasons why I always leave the tip in cash. Highly recommended.

Love Shack, B-52's

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The Apple Page 

It's being reported that Apple is hiring another 1,000 workers for its facilities in Ireland. Read the story at the link. See what wasn't mentioned. When a reader sent me the link, I answered with the following "not-ready-for-prime-time" reply:

Something else Ireland does not have and the writer of the article completely missed it: ObamaCare.  It's not hard to figure out how much additional expenses would be to cover 1,000 new employees in ObamaCare. I assume Ireland has its own healthcare plan but it, in no way, could be more onerous than ObamaCare.

And, on top of that, Apple is in an even higher cost location than the US. Apple's headquarters are in another foreign country: California.

Tim Cook knows exactly what he's doing.

There is nothing keeping the US from lowering its corporate income tax to match (or undercut) Ireland. Except folks like Mr Schumer and Ms Pelosi.