A few months ago, we learned about this Philadelphia restaurant that banned tipping and is paying its employees a decent livable wage. The good news is that it not the only one.
Bar Marco, a Pittsburgh restaurant, joined the small but growing group of restaurants who are doing the right thing by paying their employees a livable wage and not having them rely on tips. All employees at Bar Marco get a base salary of at least $35,000, health care, paid vacations, 500 shares of the company, and bonuses (based on profits).
Bobby Fry, the restaurant’s founder, says that this approach has made his employees work harder and waste less. Fry told Entrepreneur, “Our water bill was cut in half, our linen bill was cut in half, our liquor inventory was lean.” Since getting rid of tips and adjusting its employees compensation, profits at Bar Marco went from about $3,000 per week to $9,000 per week.
A portion of these profits go back to the employees in the form of bonuses, therefore annual salaries at Bar Marco are expected to reach $48,000 to $51,000 this year.
Fry believes in a business model which maximizes human value. “You cannot tell me that your business model relies on paying people below the poverty line,” Fry tells Entrepreneur. “You gotta have more pride in your business than that.”
When asked about tipping, Fry said “Whether it’s good service or bad service, people tend to tip the same amount. When you have bad service, you just don’t go back. So in reality, tipping hides how people actually feel.” And this something that I agree with 100%.
Whenever I go some place I always tip regardless of service and/or food. I just don’t go back if I don’t like the food or service. I should probably not tip if I’m dissatisfied with the restaurant, but I feel bad because I know the people there are getting paid next to nothing and they still provided a service, terrible as it may be.
I encourage all restaurants to join the movement to ban tipping and pay their employees a decent wage. I’m not saying that every restaurant’s profits are going to triple – if they increase at all – but paying your employees a salary that’s above the poverty line is the right thing to do.
Also, by getting a higher salary, employees will want to stay with the restaurant longer and there will be less turnover. This will increase employee morale and also reduce the cost of hiring/training new employees.
Nobody wants a handout, people just want a shot at reaching the American Dream, but that dream is hard to achieve when you live below the poverty line.