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originally posted by Ben Hunting:
I know little about Richard H. Thaler's work but I expect he'd have something relevant to say here.

Part of the reason "service compris" works better in France than in New York is probably because restaurants in France tend to have far fewer servers.
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I'm going to second what Robert says above. I don't have any firm statistical knowledge, but I live about a third of the year in France and it isn't my impression.

But even if it's true, it's not relevant to the debate here, which is not about how compensation of waitstaff works but about how customers react to tips included in the US. It's true that if French restaurants pay less for waitstaff, they can make their prices for food less expensive, but that is true regardless of how tipping is figured.
 
originally posted by VLM:
* BTW, anyone who still finds neo-classical economics even remotely relevant is clearly just a religious zealot.
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Me thinks you are needling me. That was Dressner’s job (RIP).

In any case I’m a physicist, so I’ve always had a self-righteous and rightly pompous view (disdain) of economics. Ain’t no science. But you can turn relatively simple behavioral psychology into a model that “fits” with simple economics (here based on utility), and force it to be empirically correct, at least qualitatively.

Anyhoo, I’m all for the “no tipping” model if it doesn’t burden the wait staff’s ability to make a living. But if someone can make more money in restaurant service under a tipping model elsewhere, all power to that person.

Does anyone think USHG will have to accept tighter margins to really make this work in NYC? That is one possible take-away. We will see.
 
originally posted by Jay Miller:
So it seems that kitchen staff are willing to be underpaid but wait staff are not. It's an odd situation.
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Correct me if I am wrong: Many kitchen staff are immigrants and are happy for a job. Front-of-house types are going to be Americans because they must have language skills, personality, etc, and they will have higher expectations about what they can get from society.
 
originally posted by Jonathan Loesberg:
originally posted by Ben Hunting:
I know little about Richard H. Thaler's work but I expect he'd have something relevant to say here.

Part of the reason "service compris" works better in France than in New York is probably because restaurants in France tend to have far fewer servers.
Click to expand...

I'm going to second what Robert says above. I don't have any firm statistical knowledge, but I live about a third of the year in France and it isn't my impression.

But even if it's true, it's not relevant to the debate here, which is not about how compensation of waitstaff works but about how customers react to tips included in the US. It's true that if French restaurants pay less for waitstaff, they can make their prices for food less expensive, but that is true regardless of how tipping is figured.
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I was commenting more on the Grub Street article and on the economics of running a restaurant with a no-tipping policy. In smaller French restaurants, smaller than any of the USHG restaurants admittedly, I have often seen only one or two servers working the entire restaurant and acting as the host. Meanwhile, I went to Prune last week, where one of the USHG servers moved to, and was surprised by how many servers they had for such a small space. Also, bus boys are rarer in France compared to the U.S.
 
originally posted by Jay Miller:
So it seems that kitchen staff are willing to be underpaid but wait staff are not. It's an odd situation.
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This is a huge problem for NYC. We pay better in Durham than what they mentioned.
 
originally posted by Jayson Cohen:
originally posted by VLM:
* BTW, anyone who still finds neo-classical economics even remotely relevant is clearly just a religious zealot.
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Me thinks you are needling me. That was Dressner’s job (RIP).

In any case I’m a physicist, so I’ve always had a self-righteous and rightly pompous view (disdain) of economics. Ain’t no science. But you can turn relatively simple behavioral psychology into a model that “fits” with simple economics (here based on utility), and force it to be empirically correct, at least qualitatively.

Anyhoo, I’m all for the “no tipping” model if it doesn’t burden the wait staff’s ability to make a living. But if someone can make more money in restaurant service under a tipping model elsewhere, all power to that person.

Does anyone think USHG will have to accept tighter margins to really make this work in NYC? That is one possible take-away. We will see.
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As a statistician I've always rather liked economics. It's a much a science as anything else that isn't physics or chemistry (my time in the biological sciences has made me miss the rigor of early childhood education research).

I think the no-tipping model looks like it does burden the waitstaff at the USHG restaurants. Who it really effects are the experienced servers who only work the cherry shifts and make bank. The earnings disparity between front and back of the house can create a toxic tension in a restaurant and that is what USHG is trying to combat. Where I live, there is no minimum wage for servers, so what they earn is essentially tips so I have no incentive to change anything.

All that being said, I would love to see this change because I think it would make restaurant work more professional. All sorts of things are wrong with the current model including underpriced food resulting in overpriced drink. I could go on and on.

BTW, I thought you were a lawyer now...
 
Physics and chemistry are two out of the traditional sciences, so your left with biology, which is per force more observational. Still, I don't think economics even compares with it in terms of the usual ways one measures testing of theories and protocols of experiments.

Buried in the piece about tipping and waitstaffs is what we were first discussing, that the USHG restaurants saw their clientele decrease after tipping included began. And this caused the decrease in waitstaff salaries just as any decrease in clientele would. If the restaurant charges 20% extra to include tipping, and the same money comes in, then unless they distribute the income differently(an entirely different issue), then one server or many, the income of the server or servers should not change. I am taking it that the waitstaff did accurately declare their tips for taxes, but no element of the story talked about this as a differential.
 
originally posted by Jonathan Loesberg:
Physics and chemistry are two out of the traditional sciences, so your left with biology, which is per force more observational. Still, I don't think economics even compares with it in terms of the usual ways one measures testing of theories and protocols of experiments.

Buried in the piece about tipping and waitstaffs is what we were first discussing, that the USHG restaurants saw their clientele decrease after tipping included began. And this caused the decrease in waitstaff salaries just as any decrease in clientele would. If the restaurant charges 20% extra to include tipping, and the same money comes in, then unless they distribute the income differently(an entirely different issue), then one server or many, the income of the server or servers should not change. I am taking it that the waitstaff did accurately declare their tips for taxes, but no element of the story talked about this as a differential.
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Personally, I consider many of the social sciences to be true sciences with theories, protocols and hypothesis testing. They don't always allow for the same type of formal prediction as physics or chemistry as you note.

My understanding is that this is part of a redistribution plan as waitstaff are generally the recipients of all of the financial rewards of a good dinner while the back of the house doesn't share in those spoils.

Other things I've seen recently are a "hospitality charge" of 15% upon which you can add money. This may be a way to split the difference with service compris.
 
Well, anthropology tends to be more strictly observational. I find some of the experiments done by sociology to be laughable. And while some of the statistical evidencing in some history makes an impression, none of it is devoid of fairly obvious interpretive choices. I won't go into the wars around psychology, which likes to think of itself as a hard science. I'm not a relativist about the results of the social and human sciences. I just think that living with some uncertainty about their results is the cost of doing business there. I'll also leave you to have the last word on this topic, or we will turn this into another hopelessly esoteric thread drift.
 
originally posted by VLM:
Other things I've seen recently are a "hospitality charge" of 15% upon which you can add money. This may be a way to split the difference with service compris.
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This is just a cover charge under a different name, yes?

"Il Coperto" is said to pay for water, bread, etc., but it's the same concept.
 
Granted economics isn't quite the science that physics is, but I'm smart enough to understand economics and not smart enough to understand physics, so I find it interesting. I sincerely hope some economists are doing a careful study of this experiment because I think the conclusions would be fascinating. It was premised on the idea that the FOH was getting overpaid relative to the BOH, and certainly we'd all love to believe that it takes more skill to cook a meal than to serve it with a smile. But this result is suggesting that it may be harder to find good waiters than good cooks. I guess that's not a huge surprise, but it means that what's going wrong in USC's experiment isn't the policy per se, but the allocation.

As for whether there really is a human being so irrational that he would tip 20% but is somehow deterred from a 20% service compris with no tipping... is there an economic term to describe such a creature?
 
originally posted by Keith Levenberg:
Granted economics isn't quite the science that physics is, but I'm smart enough to understand economics and not smart enough to understand physics, so I find it interesting. I sincerely hope some economists are doing a careful study of this experiment because I think the conclusions would be fascinating. It was premised on the idea that the FOH was getting overpaid relative to the BOH, and certainly we'd all love to believe that it takes more skill to cook a meal than to serve it with a smile. But this result is suggesting that it may be harder to find good waiters than good cooks. I guess that's not a huge surprise, but it means that what's going wrong in USC's experiment isn't the policy per se, but the allocation.
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There are many ways this could have happened:
- Inequity between FOH and BOH is wrong, but mgmt's fix is bad.
- Inequity between FOH and BOH is wrong, but FOH does not agree.
- Inequity between FOH and BOH is not wrong, so mgmt's fix is de-optimizing.

And it could be some of each.

As for whether there really is a human being so irrational that he would tip 20% but is somehow deterred from a 20% service compris with no tipping... is there an economic term to describe such a creature?
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"Most folks."

Common sense is uncommon, as they say. Anyway, consumers are unaccustomed to this scheme. Even when I go to such a place, I have to do the math to calm my ripoff antennae.
 
Yes, mead is booming right now. Our sales last year were up 150% on 2015, and we have passed last year already this year, with the holiday season and several key releases on the horizon for the next few weeks.

There will be some retrenchment, I am sure. I am concerned with the abundance of "industrial mead" - stuff made with concentrates, and with the tendency to chase whatever craft beer trend is popular right now. I did my keynote presentation to the American Mead Makers Association last year on the concept that Weihenstephan is about to hit 1000 years, and there are wineries older than that, and we need to understand the practices that have given those places that kind of longevity. I know several of them sat there gritting their teeth and resenting my efforts to tell them to get right with Jesus.

Mead makers can make inexpensive, concentrate-flavored fizzy stuff, but it's only a matter of time before Constellation or someone else of their ilk realizes there is a profit center there they can tap, and they will come along and crush some little meaderies with that business model like bugs. We can't compete on scale, so we (Schramm's Mead) will stick with quality. If it's not cheap, and it's not easy, it will be much harder for a corporate giant to look longingly at the revenue stream.
 
...they will have higher expectations about what they can get from society.
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I think you are shortchanging immigrants to this country if you think they are full of small dreams.
 
originally posted by Ken Schramm:
Yes, mead is booming right now. Our sales last year were up 150% on 2015, and we have passed last year already this year, with the holiday season and several key releases on the horizon for the next few weeks.

There will be some retrenchment, I am sure. I am concerned with the abundance of "industrial mead" - stuff made with concentrates, and with the tendency to chase whatever craft beer trend is popular right now. I did my keynote presentation to the American Mead Makers Association last year on the concept that Weihenstephan is about to hit 1000 years, and there are wineries older than that, and we need to understand the practices that have given those places that kind of longevity. I know several of them sat there gritting their teeth and resenting my efforts to tell them to get right with Jesus.

Mead makers can make inexpensive, concentrate-flavored fizzy stuff, but it's only a matter of time before Constellation or someone else of their ilk realizes there is a profit center there they can tap, and they will come along and crush some little meaderies with that business model like bugs. We can't compete on scale, so we (Schramm's Mead) will stick with quality. If it's not cheap, and it's not easy, it will be much harder for a corporate giant to look longingly at the revenue stream.
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should this be in a different thread? i can't find any relevance to this discussion.
 
originally posted by MarkS:
...they will have higher expectations about what they can get from society.
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I think you are shortchanging immigrants to this country if you think they are full of small dreams.
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Not at all what I said or meant. Of course BOH people have big dreams. My point is that FOH people are more likely to have specific desires with a specific timetable and a specific expected contribution by society on their behalf. (I feel like I'm repeating myself.)
 
originally posted by Ken Schramm:
Yes, mead is booming right now. Our sales last year were up 150% on 2015, and we have passed last year already this year, with the holiday season and several key releases on the horizon for the next few weeks.

There will be some retrenchment, I am sure. I am concerned with the abundance of "industrial mead" - stuff made with concentrates, and with the tendency to chase whatever craft beer trend is popular right now. I did my keynote presentation to the American Mead Makers Association last year on the concept that Weihenstephan is about to hit 1000 years, and there are wineries older than that, and we need to understand the practices that have given those places that kind of longevity. I know several of them sat there gritting their teeth and resenting my efforts to tell them to get right with Jesus.

Mead makers can make inexpensive, concentrate-flavored fizzy stuff, but it's only a matter of time before Constellation or someone else of their ilk realizes there is a profit center there they can tap, and they will come along and crush some little meaderies with that business model like bugs. We can't compete on scale, so we (Schramm's Mead) will stick with quality. If it's not cheap, and it's not easy, it will be much harder for a corporate giant to look longingly at the revenue stream.
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Well, congrats on the improved revenue stream!

Yesterday, I wandered into an entirely unimpressive corner liquor store and even they had two bottles of mead, up on a high shelf.

Honey concentrate?
 
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