As states across the country shift to the proposed $15 minimum wage, some Restaurateurs have begun experimenting with new no-tipping schemes to offset the increasing costs of labor.
Last Sunday, the New York Times published an extensive piece detailing the new pricing structures, several Seattle based Restaurant owners and operators have shifted to.
The paper cites the case of Bob C. Donegan, who raised prices at his restaurant Ivar's Seafood by 21% and scrapped tipping.
He told the Times: "We saw there was a fundamental inequity in our restaurants where the people who worked in the kitchen were paid about half as much as the people who worked with customers in front of the house."
He says that the move has been a success so far.
The article states that: "Since the policy went into effect four months ago, wages have risen between $3 and $12 an hour, he said, with the lowest-paid worker earning $15 an hour. Everyone, including part-timers, has health insurance and a 401(k) retirement plan."
Donegan's statement mirrors that of Kurt Huffman, a Portland based restaurant proprietor who also abolished tipping to make way for a $15 starting salary for both front and back of the house staff.
In our report on Huffman's decision last June we cited this quote from the Portland Business Journal:"The current tipping system in Oregon and other states where the tip credit is illegal is just not fair, the way it is now makes for a very absurd inequity between the tip-earning staff and the non-tip-earning staff."
Like Donegan, Huffman compensated for the higher salaries by charging customers more for beer. He increased the beer prices at his establishment Loyal Legion from $5 to $6.
Is the salary scale being promoted by people like Bob Donegan and Kurt Huffman the future of restaurants? We'll have to wait and see.
