Fat Guy

I think the percentages reflect regional norms. I agree that the ideal situation would be to go to a true wage system, but I think the service charge combined with the pooling arrangement is a step forward.

True, so I will substitute "not-for-profit healthcare" for the term "universal healthcare." That alone, regardless of who is paying for it, reduces the cost significantly. ← Still not sure I can agree. The French healthcare system includes both public, private for-profit and private not-for-profit care providers. But I don't suppose it's important to the argument. What you're saying is that healthcare costs in France are lower than in the US, and what I'm saying is that it's irrelevant. Yes, healthcare costs per employee are lower in France. But where's the evidence that overall costs per employee are lower in France? Having been involved in some international business deals, I can tell you that in my (limited) experience the per-employee costs in France are higher than here. Or even if it's a little bit less or more, France is still certainly an expensive country in which to do business and maintain employees regardless of the healthcare portion of the equation. But all of that is beside the point. The appropriate basis for comparison is other US businesses. And it is beyond question that plenty of US businesses do just fine even though they have real employees and all the related healthcare costs. Restaurants don't need a special exemption. They just need to get their acts together and move into the 21st Century alongside real businesses.

According to New York Magazine, French Laundry in Napa grosses $7.5 million per year. So, yes, I think they're probably doing fine.

Thomas Keller had much to lose and little to gain by opening a restaurant in New York City. He was already America's foremost chef, operating a highly profitable restaurant, and could have stayed in California, relaxed and retired as such. The whole New York enterprise is inextricably linked to factors unrelated to profitability: Keller's legacy as a chef, his sense of an obligation to teach, his long-held desire to make a comeback in New York and in general his idealism about all things culinary. In addition, he already operates a going concern -- again, a highly profitable one -- that uses the service charge model. So it would not seem that newly commissioned cost benefit analyses would be necessary. He's just replicating an already successful decision. My sense is that Keller didn't open with a service charge system because it was just too much. He was already opening in an uncertain location, in the wake of a sustained media hate campaign against Ducasse's New York restaurant, after having left New York in defeat in 1990. He knew he had to hire an entire new waitstaff, drawn from the existing pool of experienced New York waitstaff already addicted to the short-sighted cheap thrill of the tipping system. Now, with four New York Times stars, near-universal critical acclaim and no sign of ever having to worry about a single empty table, he seems to have acquired the stability and confidence to bring Per Se in line with his principles.

My assumption is that a restaurant declares 100% of what's included as a tip on the credit card slip, at the very minimum. ← In the 21st Century if a restaurant tries to declare credit card tips but not cash tips, the IRS will come down on the establishment like a ton of bricks. There may be a little wiggle room left on the cash side of things, but the days of pocketing all the cash tips and declaring none of them are over.

I believe all tips have to be declared, and I don't think the issue of allocated tips is relevant to what we're talking about. French Laundry has had a service charge for a long time. I'm sure Keller's management team is fully aware of the tax and fee implications of the switch. In addition, most establishments use service charges in one way or another. Most every restaurant has service charges for tables of six or more, and for private functions. I imagine this ground has been gone over and found not to be a barrier to the efficacy of the service charge.

I too am not an expert, however I'm sure you're incorrect about at least some of your calculations. Tips, for example, are definitely subject to FICA tax for both employers and employees. So there should be no categorical change upon switching to a service charge.

Other countries have one benefit we don't -- universal healthcare. It's much easier to guarantee a living wage when the employer doesn't have to shell out $200-700 a month to provide health insurance for each employee. ← I think the healthcare argument is a bit of a red herring. Most every US industry other than the restaurant industry (and a few other anomalies) has figured out ways to pay its employees living wages without the need for tipping. The restaurant industry is given a special (and, I think, wrong-headed) exemption to the minimum wage so that it can perpetuate a system that might not otherwise be sustainable. It's also worth noting that healthcare is never "free." It may cost more in the US, but it's not free anywhere. One way or another, it gets paid for -- either by taxes or by employee contributions. In France, as I understand it (and this is not an invitation to a debate about healthcare -- I'm just trying to define its relevance to the case in point), healthcare is funded primarily by a tax on wages. Those wages are paid by . . . employers. So I fail to see how this makes it categorically easier to pay servers a living wage in France than in the US.

It happens in some places . . . like in entire countries.

Op-eds and other opinion pieces are edited differently than articles in the rest of a newspaper. Because the op-ed is the opinion of the author, the op-ed page editor has a unique challenge: he has to try to help the writer make it better, but he has to let the writer stay in charge. This is pretty standard at any newspaper, I think -- though I've only had op-eds in a very few papers (three or four, maybe, plus syndication). The editor I worked with was excellent at what he did -- it's always a pleasure to be edited well. He prefaced all his comments with the explanation that I could take them or leave them -- I in turn took all of them. He made me document the facts -- numbers, names, etc. -- with references to sources he could see online or that could be faxed, but when it came to the arguments he tried hard not to tamper, while helping me to recraft a lot of sentences and paragraphs to make them better. The final piece was true to the spirit of what I had submitted, but it was better written. In addition to his editing, the piece went at some point in the afternoon to the copy desk, where they do a general edit and make comments. We addressed those comments and closed on a final version. At that point, it went through proofreading and layout -- that was after I as the writer stopped being involved in the process. For a news article, things would have been different. The newspaper asserts much more "ownership" over those. Editors often get heavily involved in pieces, from conception through execution.

Just a quick administrative note here: there's a topic in progress on the Per Se/tipping issue. A couple of posts here that got into the substantive issues on that other topic have been moved over there. Here we're just talking generally about the subject of food op-eds. Thanks!

It's amazing how spoiled you get when you write online. In newspapers, they spend the last hours of the day obsessing about "Do we fit?" In other words, they're trimming and altering text based not on any concept of merit but, rather, whether they can fit everything on the pages the way they want to. After I had signed off on final copy and gone off to eat pizza, they had to rewrite a couple of sentences in the op-ed to make it fit, and somebody lost a "to" in the process. I'd have to guess it was corrected in later editions and will be fixed on the Web site eventually.

The point about "To oppose tipping, it seems, is to be anticapitalist, and maybe even a little French" definitely goes into my very small but triumphant book of "I can't believe they printed it!" It was no surprise this morning. I sent the piece in figuring it would get rejected, so a few minutes after I sent it we headed up to New Haven to visit the in-laws. As we were passing through Milford, the op-ed page editor called on my cell phone and said they wanted to go to press with the piece that night. So we begged, borrowed and stole computers and fax machines from family friends in New Haven and I spent the afternoon working on revisions, fact checking, etc., with the folks at the op-ed page. At about 6:30pm the piece was finalized and sent to the proofreaders, and that was that (am I bad person for pointing out that the proofreaders introduced an error in the first paragraph?). We went for pizza at Sally's and, a few hours later, there it was in the paper.

Carrot Top, I'm glad you started this topic. It brought the idea of food op-eds to the front of my mind and a couple of days ago, when Thomas Keller announced he was switching from tipping to a service charge at Per Se in New York, I said to myself, "You're posting about how the New York Times runs all these food op-eds, so why don't you write one?" So I sent one in on Tuesday morning and they ran it in Wednesday's paper. I don't know that op-eds stay live on the free part of the Times site for very long, but it's here for now.

Couldn't agree with you more. He should have just taken the plunge.

Sammy, I agree he doesn't go far enough. But he deserves credit for moving ahead of the curve. Maybe someday he'll go all the way.

Nobody is trying to guilt you into anything. However, in a pooled situation you aren't effectively punishing a server by leaving a smaller tip. The server may just assume you're a cheap bastard who always tips low. Much better to complain to a manager. One of many good conseqences of service charges is that they make it much more likely that customers will articulate their complaints. This gives managers more opportunities for customer service and interaction than they currently have under the passive-aggressive tipping system. Example: Mr. Smith goes to Joe's Burger Shack, orders a burger medium-rare, gets it well-done, says nothing, eats it, leaves a 10% tip, vacates the premises. Waitstaff conclusion: Mr. Smith is a cheap bastard who tips 10%. Example: Mr. Smith goes to Joe's Burger Shack, orders a burger medium-rare, gets it well-done, says nothing, eats it, sees a 20% service charge on his bill, complains to manager that he had poor service and resents the service charge. Opportunity! Manager apologizes for the kitchen's mistake, offers Mr. Smith a coupon for a free burger on his next visit and explains that servers don't cook your food. Manager further explains that any time Mr. Smith has a problem with his food he should send it back immediately and it will be graciously replaced.

Charles, Lynn has done a lot of different studies and meta-studies including analyses of repeat customers and, I believe, addressed those points. As I recall, he has concluded that 25% of diners are inelastic tippers and that the other 75% are more likely to tip better on account of weather, looks, physical contact, gender, etc., than on account of good service. I'll try to dig out my full pile of research on tipping -- Lynn is not the only person to have examined the matter, but all the social research concludes pretty much the same things. Rich, I hasten to add that Professor Lynn also has several years of experience as a waiter (in Austin, Texas). It's just that after being a waiter, he went ahead and got a Ph.D. in social psychology with a minor in statistics, philosophy and sociology, and has done more academic research on tipping than anybody else in the world. He doesn't appear to have any agendas -- I'm not sure I've ever seen him say he opposes or favors tipping. He just seems to find the whole issue interesting and worth of study.

Ruth, are you sure that "Most people who buy bottles in the hundreds of dollars do not normally tip 20% on the entire cost of the wine"? I haven't seen any actual statistics on this, but anecdotally I've heard that most people do tip their normal 18-20% on the entire bill, regardless of the cost of wine. Which of course is just one of many reasons it makes no sense for tips or the cost of service to be related to the bill. While it may require more service to serve a $300 bottle of wine than a $30 one (they'll likely decant, bring out special stemware, etc.), there's no more service in a $3,000 bottle than in a $300 one. Moreover, sommeliers are often part of management and don't share in the tips at all. This is not peculiar to wine, however. It requires less labor to cook a $120 lobster than it does to make a $12 steak tartare appetizer. The cost of an item has little to do with the amount of service it requires. It's just as hard to serve empty plates as it is to serve plates of foie gras and caviar.

Lots of people believe their personal experience is more accurate than scientifically conducted studies. They're usually wrong. In addition, any serious study makes its methodology public and, while there may be some built in biases, good studies attempt to control for those biases and are in any event a lot less biased than anecdotal reports from individuals. I also would not, in a study of consumer tipping behavior, care very much about what waiters think. I would care about what consumers think. A waiter may assume he get more money because he gives great service; in reality it may just be because he's handsome. And they, unlike waiters, have little incentive to lie about cash matters. Have a look at Michael Lynn's web page. He's the foremost authority on consumer tipping behavior, and has done dozens of studies and meta-studies. There's a ton of interesting information assembled on his pages. There's also a good distillation of his work in a Cornell Chronicle story:

A follow-up piece in the Post today indicates that the kitchen staff will be involved in the service charge pool. If so, this is a feature of Keller's plan that exceeds a typical service charge plan (such as the common practice of a fixed service charge for parties of six or more). The tension between the back of the house and the front of the house in restaurants is counterproductive and unnecessary. Keller's plan, if the Post is correct, is a step towards putting everybody on the same team. Andy, "Page Six" is the Post's gossip page (it is rarely actually on page six), but it's really more than that. It's a fixture of the New York cultural landscape, and finds its way into more conversations than anybody is comfortable with. MichaelB, I believe that's incorrect. My understanding is that under New York State law a service charge is subject to state sales tax. However, someone who is actually involved in restaurant accounting could probably give a more authoritative answer.

The service charge system is an improvement over the gratuity system, but it's not the true solution. If you list all the things that are wrong with the gratuity system, the service charge addresses some but not others. For example, the service charge still encourages shallow upselling and it still presents service as a separate category rather than simply part of a whole. One thing at a time, though. You're not going to see restaurants switching from the gratuity system to a true wage system overnight, and you may not see it ever.

Most of the people I feature in my book are both atypical and typical. They're atypical by the standards of the restaurant industry as a whole. As I was saying in response to Elie's post above, most restaurants are crap. They serve bad food, they're badly (and barely) managed, etc. Indeed, as a whole, I think the restaurant business is way behind a lot of other businesses (even other food businesses, such as supermarkets) in terms of the currency of its management methods. But bad restaurants weren't the subject of my book, except insofar as I give some advice for how to stay the heck away from them. Rather, Coraine is the kind of guy you would expect to find within the small subset of enlightened, modern, sophisticated restaurant executives. Obviously, I chose an extreme example: Coraine may very well be the best at what he does, period. But there are plenty of men and women cut from the same cloth -- albeit smaller swatches of it -- working in restaurants across the country. And not just fancy restaurants. You find some brilliant, dedicated managers in barbecue places and frankfurter stands too. The hope is that, while a minority, people like Coraine will act as tastemakers, trendsetters, teachers and leaders of the majority.

Most restaurants are McDonald's. Okay, not exactly, but as soon as we start talking about "most restaurants" we get into dangerous waters. Most restaurants aren't worth eating at, period. So of course it's not worth paying their wine markups. Not that McDonald's serves wine (in the US, at least). That being said, I've certainly spent a heck of a lot of money on wine in restaurants, especially those that have really good wine programs. And I try to get my money's worth: I often order wines I haven't seen in stores and that may not be available retail (either on account of allocations or age), I try to get a decent amount of education from the sommelier whenever I can, and I generally insist on excellent wine service. For example, if I think a red wine should be decanted, I don't care if it only cost $30 -- I'll make them decant it. I send back defective bottles. Etc. That being said, I think one of the best ways to derive value from the restaurant wine experience -- especially if you're a fairly low-end wine consumer, as I am (I almost never order a wine that's more than about $75, which in New York fine dining restaurants barely even registers as a wine sale) -- is to take advantage of a wine-by-the-glass program (this is a piece of advice I give elsewhere in the book, in a part that isn't in this set of preview selections). This allows me to taste multiple wines in a sitting, and to pair appropriate wines with each dish. I just wouldn't be able to pull that off at home without extensive planning or a heck of a lot of waste. I have even found that some sommeliers are amenable to "split tastings." In other words, let's say there's tasting menu available at $70 for the menu or $100 for the menu plus wines by the glass with each course. Not always, but sometimes the sommelier will let you split a tasting. So you order one $70 menu and one $100 menu-plus-wines and the sommelier brings two glasses with each course and does a half pour in each. I'm not saying, I'm just saying. I also use by-the-glass selections as a way to taste unaffordable wines. Like if I see Yquem by the glass on a dessert wine menu, I'll often get it, because I never get a chance to buy a bottle of Yquem but I can afford a glass now and then.

This is the US Department of Labor's table of minimum cash wages after tip credit by state: http://www.dol.gov/esa/programs/whd/state/tipped.htm The minimum wage in New York is $6 per hour, and the maximum tip credit is $2.15 per hour. That means tipped employees can be paid an adjusted minimum wage of $3.85 per hour, assuming they make at least an average of $2.15 per hour in tips. There are various ways to look at this arrangement. The economics of wages are too often oversimplified. However, it would not be a stretch to say that tips paid by customers are subsidizing restaurants' abilities to pay their employees less than the minimum wage.