cyuIf a business or industry claims it just can’t make ends meet without exploiting its workers, then our answer should be the same as when southern plantation owners made the same ‘economic’ argument.
Then, it is every capitalist business with hired employees other than the owner of the capital. After all, the very essence, the source of profit is the exploitation of labor above and beyond the wages paid. Without that, no one will start such a business. Read Marx’s Capital, comrades, before it is banned.
I’d like to offer an opposing view but solely because I want to learn, if that’s okay?
I’ve owned businesses. I tried to do away with tipping and raise wages a commensurate amount, and then increase prices a commensurate amount to cover.
Keep in mind I made no money from this business, ever, in fact one could argue I lost well into the six figures on keeping it afloat for the employees and customers…but that isn’t the point. That part is fine by me.
The point is this, the customers were fucking dumb. They’d pay $5-$6 per beer and tip $1-$2 each drink, sometimes $3+.
But they felt paying $7-$9 per beer was too expensive and during the brief time we tried it even with tipping disabled at the register sales tanked 30-40%.
Which eventually led to less money coming in to the business and more money needing to be injected to pay the servers the same amount they were getting before.
I am all for abolishing tipping. I’m all for paying living wages and benefits and everything. I am willing to lose money to defend that. But I think the wild card is stupid fucking people who feel better about paying $5 and tipping $2, versus paying $7 and tipping nothing.
I don’t know how to overcome that.
I’ve since left that industry because it’s insanity - but I’m open to feedback and to learn.
I’m sure there are other examples, but these are the ones that stick out in my mind. Seems like it basically amounts to people like the idea of getting a deal, even if it’s exactly the same.
“People are dumb, panicky dangerous animals and you know it.” Kay, Men In Black
Everyone keeps bringing up the JC Penny thing as an example of how people are dumb, except it’s actually just a demonstration of people being logical and the logical choice being unprofitable.
If you know prices are going to stay the same no matter what, then you buy things only as you need them. If they get discounted at times and have an extra large markup the rest of the time, then you would have to make a prediction on whether you’ll need it in the future. Since we can’t predict the future, you inevitably get this wrong and end up with more than you need or missing the stuff you need. Whichever way, you’ll be spending more in these kinds of stores either through buying stuff you never end up needing or being forced to buy things with a huge markup. JC Penny gave us the option to make a good choice. Everyone made that choice, but the good choice doesn’t produce profit.