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Why is the general public so suckered in by the restaurant industry? You pay $20 for a $2 steak, $3 for a 25 cent potato, $4 for a 75 cent beer and $7 for a 45 cent salad, then are expected to subsidize the low wages that the restaurant pays their employees? Hell of a system, it should not be too long before we get to pay for the pleasure of getting seated. >>
I'm in the food business. Once you cover your overhead, those markups don't make nearly as much profit as you obviously think they do. The typical restaurant profit margin is very thin. Haven't you ever wondered why many restaurants close? You're not paying for only the food. You're paying for the building, utilities, the preparation, payroll, the insurance, the MASSIVE red tape and regulations, taxes, the fixtures that are broken every six weeks by vandals, etc...
Tell me, how much would YOU charge your friends for a steak in your home, if that price also had to cover all your household expenses?
And the US tipping system is in place to make you the boss of your server. Replace tipping with hourly wages, and not only will the level of service drop to the same level you get at your local Best Buy/Wal-Mart/McDonalds, but you'll end up paying even more in increased menu prices than you would have for the tip. Because now the restaurant not only has to pay the wages, but matching payroll taxes as well. Do you think restaurants will simply cut their already thin profit margin and not raise prices if they have to start paying full wages after you scrap the tipping system? Hardly.
Folks, the US full service restaurant tipping system SAVES you money, and gets you FAR better service than you would have otherwise.