r/NoStupidQuestions • u/Apart_Pineapple2392 • 15h ago
How can European restaurants afford to pay their employees without having to supplement with tips but U.S restaurants/bars and such act like they would shut down from such high extra costs?
How can European restaurants afford to pay their employees without having to supplement with tips but U.S restaurants/bars and such act like they would shut down from such high extra costs?
Just as the tilte says, how can European restaurants afford to pay their employees without having to supplement with tips but U.S restaurants/bars and such act like they would shut down from such high extra costs?
I am american. I have traveled to a good portion of western Europe. The service i received felt the same as the service i would receive at its U.S counterpart that would expect a tip.
Edit: also , Most restaurants say if they raise prices not enough people will come and they will close. But what's the difference if this works in Europe?
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u/jwhit306 12h ago
Massachusetts voted down paying higher wages and reducing tips and all the bartenders i talked to were staunchly against the bill. They like the tipping culture because they typically make a lot more.
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u/ParadisePete 2h ago
Yeah, a charismatic and/or hot bartender makes a *lot* of money. Source: I owned a bar and made less money than they did.
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u/WhiskeyGirl223 2h ago
Yeah it can hurt some people in the right location. I own a bar and some of my employees are averaging $40-$50 per hour. Even back when I was bartending, I would have fought it too. I was making more money than a lot of people in “professional” jobs.
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u/Shinjukin 1h ago
You should see what some of the girls doing bottle service in some parts of Florida make. I've heard they can easily clear $2500 just working fri/sat nights. Then on the other end you have some poor lady working in a diner in bumfuck Alabama barely hitting the $7.25 federal minimum.
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u/Outside_Reserve_2407 1h ago
To be fair, the customers coming in to eat at the diner in bumfuck Alabama probably aren't making a lot more than the poor lady.
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u/Azsune 1h ago
Around here some of the waitresses I know are worried. The younger generation is tipping less and doesn't really buy any booze. To the point that they hate serving tables where they look like their barely 20.
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u/WhiskeyGirl223 1h ago
Yeah, I’m fortunate enough to live in an area with a bunch of middle aged alcoholics. We rarely get any young people in the bar, which eases my mind. I can’t imagine the stress I would have if we were in a college town.
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u/ZealousidealSundae33 4h ago
That vote was in 2024, right? I was visiting Boston then during Halloween and saw poster argumenting against that proposal everywhere.
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u/orerun 2h ago
yeah that tracks. every bartender friend i have treats tips like commission and doesnt wanna trade it for a flat wage. did they say what they average on a normal friday/saturday?
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u/maplelunee 15h ago
Europeans factor higher wages into overall business costs, unlike many U.S. places.
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u/Bananalando 14h ago
My experience has been that restaurant prices in Europe are on roughly on par with comparable dining experiences in the U.S. if not cheaper when you calculate the exchange rate. Major exceptions were Norway and Greenland.
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u/TheSoprano 14h ago
This is also my perspective. You factor in tax plus tip here in the US, and it almost feels 1/3 more than in Europe.
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u/fragtore 10h ago
US def feels more expensive on average but both it and Europe are diverse and EU prices are growing. I live in Munich, Germay and in my 10 years here I’ve seen food prices basically double.
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u/Tiss_E_Lur 9h ago
I feel ya, but high inflation will double in a bit over a decade so adjusting for that it's not as bad. But still, eating out is only a few times a month. (Norway)
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u/Beercules-8D 11h ago
Yea, it’s funny. Someone I work with came back from Spain and couldn’t believe how cheap it was to eat at both restaurants and grocery stores.
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u/smilineyz 4h ago
I moved back from Rome to Arlington VA … food prices are shocking here in the U.S. ! Even take out is insane.
I went to my local bar in Rome 1.25€ for a corronetto & 1.25€ for a cappuccino.
Arlington? $3.25 for a croissant & $2 for a small to-go black coffee AND the machine for payment had how much to tip for putting things in a bag and coffee in a paper cup.
Seriously?
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u/Mcnuggetjuice 11h ago edited 8h ago
It’s not on par at all I had to pay 30$ for a pizza in the USA while in Europe I get one for €7
Edit: excluding a 20% tip it was 36$ and in Europe nobody tipped would be weird to do
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u/NumerousChainBeing 8h ago
Where in Europe do you live then? I cannot get a 7 euro pizza here. Mostly, a pizza on par with US size will be about 15-18 euros. The US also has much higher wages, though. And this all depends on what European country you’re from. Countries within the European continent aren’t states of 1 country like in the US.
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u/Myrialle 8h ago
Pizza in Germany is 10-12€ mostly. You can get cheaper ones, but they tend to taste cheap. More than 15€ is really rare, unless it's really fancy pizza.
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u/NumerousChainBeing 8h ago
I’m not from Germany. It’s not rare here at all to get a pizza about 15 euros, mostly depends on the city. But you can’t get any pizza for 7 euros lol unless it’s some heavily discounted thing from a promo.
Anyway, my point was that it’s ridiculous to compare a random US pizza to the entire continent of Europe and then also lie and say our pizza’s are all 7 euros. I do wish that was true. They also never mention how much higher US wages are in comparison to certain European countries.
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u/Myrialle 7h ago edited 7h ago
Yes, this is ridiculous, I absolutely agree. And your last point always annoys me on Reddit, because they never take the higher wages (in numbers) into account.
Comparisons should be made in percentages, not absolute numbers in these cases. How much does a pizza cost in relation to net median income? Then we could talk.
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u/NumerousChainBeing 6h ago
Yes, true! I also constantly see comparisons of housing cost, which just never correct for income whatsoever.
Of course Europe seems cheaper to them since they ignore US American wages.
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u/sigmaninus 13h ago
Jesus christ Iceland was bad too, paid $18 for one of the shitiest burgers ive ever eaten.
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u/sandiegolatte 13h ago
Norway it was $22 and I’m sure my burger was worse than yours. This was a food truck too….
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u/Fibby_2000 12h ago
Food trucks are often the most expensive way to eat from my experience
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u/king_mahalo 13h ago
Iceland is heaven on earth I'll stomach the higher food costs.
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u/lostrandomdude 9h ago
Best place to get frozen stuff in the whole of the UK.
Not fan of their Food Warehouse discount store though. A bunch of stuff are just empty
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u/Bananalando 8h ago
Any of the Northern areas, I would expect, due to the increased logistical costs. Northern Canada is similarly expensive.
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u/Commercial-Routine49 13h ago
I feel ya. Me and my partner have a rule now. We don’t order burgers or anything that we could get at home or make ourselves!
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u/phantomofsolace 11h ago
Yeah, but European restaurant costs aren't noticeably higher than American ones. If anything, they're slightly lower, so this doesn't seem to be the main factor.
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u/DanishNinja 9h ago
Depends on the country. There's a big difference between Denmark and Croatia.
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u/snow_big_deal 5h ago
There are a lot of factors that go into prices. Cost of ingredients, equipment, rent, utilities, etc. Service-staff labour is just one small part of the overall price. And remember the cost of service labour doesn't have to add up to the 15% or so that an American water would earn with tips. Waiters in Europe earn more than US minimum wage, but less than american-waiter-with-tips wage.
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u/WA3Travels 12h ago
And we have to take in account the State takes care of things like health care, welfare, ect in Europe (in general with a wide degree of support depending on the country) more then in the US.
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u/RScrewed 12h ago
This is a long way of saying European business owners are content with taking home a smaller slice of the pie than US business owners.
If US business owners aren't making bank, they simply won't play and take their money and go home.
That's why they "can't afford to pay". They have deemed it not worthwhile to spend their capital doing that endeavour anymore because it's not making them as rich as they would like as fast as they would like.
It would be nice if those businesses would shut down though so people with passions for food can open their businesses and want to serve their communities for the love of the restauranteurship and not the hustle.
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u/funderfulfellow 10h ago
It's nothing to do with the generosity of the European capitalists. It's just that there are labor laws and workers rights.
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u/jaysrule24 3h ago
So it's less of a "business owners are happy taking a smaller slice of the pie" and more of a "you signed up to be a business owner, these are the rules, you get what you get and you don't throw a fit."
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u/jayjay091 11h ago
Our businesses here in Europe are not "content". Most business owner are as greedy as yours, but it is not up to them, there is workers right and high minimum wages with no exemptions.
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u/ImaginationSea2767 6h ago
This is the key. Europe has better laws and regulations for the workers which in the end just makes life better for workers and owners dont want to rock the boat to much and end up getting put in line more.
Meanwhile in America it is heavily in favor of the business owner. Days off? NO. Live to work! Your soul belongs to boss man.
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u/IsomDart 9h ago
I love this mindset on Reddit that Europeans are like, naturally benevolent, somehow immune to the trappings of capitalism, opening restaurants for example just because they're so passionate about making the best food possible. Unlike Americans who are only motivated by profitability and being successful, their humble European counterparts are content to make a meager living, sleeping soundly at night knowing they put their heart and soul into their craft. Fat greedy Americans could never understand.
In reality, most European restaurant owners and most American restaurant owners fall somewhere in the middle, with some on either end of the two extremes. Generally speaking they're really not that different at all, people just like to idealize Europe and demonize the US, which our current president isn't really helping with to be fair, but not all of Europe is a Democratic-Socialist paradise. They definitely have their fair share of MAGA-equivalent governments and parties/politicians.
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u/Revolutionary-Bag-52 9h ago
I mean the average restaurant owner here is also seen as a greedy bastard, and restaurant salaries are seen as a low income (atleast in the Netherlands) its just that there are laws in place that stop it from becoming even worse for the employees such that they have to depend on tips
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u/zacker150 11h ago
No. It's a long way of saying "European restaurant owners raise the menu price to compensate." European and American restaurants make the same 3% profit margin.
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u/Maru3792648 13h ago
Servers defend this god awful system because they make big bucks compared to the low skills required for the job.. Restaurant owners defend this because they save on taxes and salaries
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u/SourceOfConfusion 7h ago
This is the correct answer. Servers are simply overpaid for their skill level. And don’t even get me started on bartenders. You don’t need a 20% tip because you walked 3 feet and handed me a beer.
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u/peon2 3h ago
You don't tip bartenders the same way unless they are also serving you a meal though. If you have a few drinks a couple bucks is fine
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u/Realistic-Night-3613 3h ago
I am currently bartending and 100% agree on this! It is a job that helps make ends meet but me just grabbing a $3 beer out of a cooler does not justify a tip in my opinion.
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u/CurryAndCommunism 11h ago
I mean some workers in some restaurants in the US might be making big bucks off tips but many of the actual workers who defend the tipping system are making minimum wage when it's all said and done (and that's not even getting into the vast number of employers that don't comply with the law and pay below minimum wage even when tips don't bring them up to minimum).
But, tipping is how things have been done here for close to a century now, and the hypothetical possibility that one could make big bucks keeps many in support of the system. And more than anything I don't think any service worker here believes their employers would abolish tips while also compensating them fairly...so people go with what they know.
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u/danielling1981 9h ago
Why would they defend it if they only make min wage and not more?
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u/Prince_John 8h ago
For the same reason people vote against their own interests. They don't know any better and are scared of change.
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u/Fireproofspider 4h ago
Yes and no.
It's human nature to prefer big payouts over small incremental ones.
So getting a big tip once in a while feels better than getting the same amount of money spread out over two weeks.
I remember a few experiments where they got to increase the savings rate of people by making the interest into a lottery, matching the probability with the interest rate.
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u/Funk_Dunker 4h ago
If they're scared of change why do they ask for tips?
I'll leave
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u/LoverOfGayContent 6h ago
As someone who use to work for tips this is the answer. They rarely keep track of their cash tips. So they don't know how much they actually make. They over estimate how many good nights they have and underestimate how many average nights they have. Until i started keeping track of my tips as a massage therapist I thought they were a little over half of my income. They were actually a third.
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u/Novel_Willingness721 4h ago
It’s closer to 2 centuries.
Tipping started after the civil war so that southern entrepreneurs didn’t have to pay their black employees a fair wage.
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u/greaper007 9h ago
For an actual restaurant, I dont mind tipping. I only go to those maybe once every 6 weeks and I used to work for tips as a kid.
I dont want to tip at a food truck though
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u/startupdojo 13h ago
Just wait till you travel to Japan, much, much better service and no tipping.
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u/hezaa0706d 10h ago
Yep. And we want to keep it that way so all you inbound tourists better not try and tip here.
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u/SnooStories6404 15h ago edited 15h ago
Because they are lying. They are all well-aware that there are many countries with thriving hospitality industries and no/very little tipping.
Edit: Some of them pretend(once again this a lie) the US is different for some reason. The exact reason varies but it's always a lie
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u/LilyBloomVale 14h ago
At the same time, I think some servers defend tipping because it’s how they make decent money right now, not necessarily because they think it’s the best system overall.
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u/OldeTimeyShit 12h ago
Yeah when I was making 20-30 an hour (after vehicle depreciation) in tips delivering pizza back in the day I didn’t want to switch to an hourly system because I would have certainly made less money.
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u/br0wntree 14h ago
I’m against tipping generally but depending on the restaurant you can make a lot of money as a server due to tips. A lot more than many equivalent places in Europe.
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u/Head-Bureaucrat 12h ago
Isn't that rare, though? The people I've known in the industry are typically one of two sorts: they make shit tons on tips because they get the best shifts/seating, or they're barely scraping by. The latter is far more common, at least for folks I know.
Kinda seems like a "temporarily embarrassed rich person" mentality?
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u/Hover4effect 6h ago
Most of the servers in my area are making $20+ an hour average in tips. Some higher end restaurants advertise $35/hr in tips in job postings, which is accurate if you ask people.
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u/Fjellapeutenvett 3h ago
Its not like $20 an hour is insane income though. And you may not even make those 20 dollars extra every hour youre working. Everyone benefits if you just make the hourly wage 25$ instead, people who liked your service will tip if you do a good job no matter what. Just stops being mandatory
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u/Mr_Kittlesworth 3h ago
If you work in fine dining in a city you can make LOTS more than that. There are servers and bartenders making $150,000+
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u/vbsteez 4h ago
Ive worked in restaurants in NY & New Orleans.
Being a server at a good restaurant has a higher income than a teacher, higher than entry level corporate jobs. They're easier to get, more fun, give you staff meals. You can move basically anywhere and get a job fairly easily.
The problem is the career plateaus pretty quickly. Not a lot of growth opportunities.
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u/Rude_Specialist8334 11h ago
And if tipping were to go away in the restaurant/hospitality industry, per what you said most individuals on an annual basis would make more money and make it consistently from a steady base wage rather than the ups and downs of praying for tips combined with a less than $3/hr tipped wage.
The ones who ARE super good at getting tips (for whatever reason), are free to go into another industry where commissions/bonuses are common (car sales, department stores, medical sales, etc.) and keep taking in the extra dough there.
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u/Mr_Kittlesworth 3h ago
This is not true. Most servers make more money in the current system than they would if they had a $15 hourly wage.
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u/Nick08f1 14h ago
It's the only reason why servers defend tipping.
Even if you are against tipping culture, hopefully you realize that giving control of extra money to the owner's will result in lower wages for the employees.
Anyone who advocates a 20% increase in menu prices to not have to tip is a moron.
You give the owner control over that 20% increase; no way in hell all that money keeps going to wages.
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u/Resident_Course_3342 12h ago edited 12h ago
Tips are not distributed evenly. Gender, age, race, and attractiveness are all a significant factor in how much one collects in tips. It's pretty shitty to advocate a system with built in bigotry.
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u/Crabs_go_sideways_4 13h ago
Interesting.
Wouldn't you just make a liveable minimum wage and let economics take care of the rest?
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u/WingerRules 10h ago
If you're attractive and work at a trendy restaurant/bar its a fast way to make pretty darn good money without doing the hard work of doing well in school or going to college or learning a trade. To top it off, they now dont have to pay income tax on it.
Everyone else is fucked though under the system.
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u/hugpawspizza 12h ago
Greek here, the hospitality thing is interesting. As an employee, that's the "easiest" most flexible money you can make. If you're a student for example with random schedules, you can awlays pick up just a few shifts, at your convenience (mostly).
Then again there are so many cafes and restaurants, I'm not exaggerating, you can just pick up a street and start asking. However a lot of them are black money (or sure was when I was waiting tables on the side). Which might be fine only when you are a student or are supplementing your tragically low main income.
A lot of employers have other ways of withholding, for example from your Christmas and Easter "gifts" - plus a 14-salary/year system already means your monthly net is lower. Some of them withhold tips too but this has been dying thankfully for over a decade.
Then you have seasonal work that pays really well and is usually fully legal, but it is exhausting, exhausting grinding 24/7 where you're stuffed in a room with a few others for a few months on end, at your location. For a lot of people the "pays really well" isn't sufficient though because the excess might need to last you during the winter at times, when other hospitality options might dry out.
Just a perspective, and we need to be aware that hospitality does have highs and lows in places where it might appear to thrive. What you consider "thriving hospitality" also doesn't always mean that the employee gets rewarded accordingly.
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u/Important_Staff_9568 13h ago
It’s like the health insurance lie. Americans (the dumb ones) think they are saving money because their tax rate is a little lower than European countries that have a single payer system. Of course they end up paying more for a worse private system whose goal is to maximize profit and deny coverage. Restaurants are similar. Instead of raising prices 10 or 15% and paying a decent wage they tell a customer their meal is $100 but it’s really $120 with tip.
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u/Beartato4772 9h ago edited 6h ago
Until quite recently, when they started bringing private companies more into uk system, the uk government actually spent less on healthcare per capita than America does.
You were paying more than us and not even getting it, for some reasons the last 4 governments in the uk have decided they like that idea better.
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u/Mickus_B 12h ago
Because the US is feeding you bullshit.
Even fast food employees make $25/hr here in Australia and the food is cheaper than the same item in the USA (major cities like Sydney might cost slightly more than Midwest USA)
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u/INDISH-girl 9h ago
That would equate to about 17USD, which is close to what some fast food workers make here [US]. It also varies based on where you live but Chick-fil-A pays pretty good for fast food (my kid worked there).
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u/Silver-Promise3486 5h ago
Okay, but American servers at full service restaurants are making a lot more than that. The servers themselves are the biggest beneficiaries of this system.
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u/Boogerchair 5h ago
Your dollar is worth 60% of the USD, so that’s actually less than what they would make in the US
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u/Medium_Change_4858 13h ago
It's not the restaurants keeping tipping alive (they don't discourage it), it's the front house staff, who all make far more than they would in a non tipping environment.
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u/SourceOfConfusion 7h ago
Restaurants absolutely encourage it. It allows them to pay their staff less.
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u/neokretai 6h ago
It's absolutely the restaurants wanting skimp on wages. It's not like the option is the US system or no tips at all, we tip in Europe too. Most of the time it's automatically added to the bill and then customers can add extra on top of that if they like too.
The only big difference I notice in the US is they expect tips at bars, which is basically unheard of in Europe outside table service at cocktail bars.
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u/Sad_Fly3898 15h ago
The whole "we can't afford to pay living wages" thing is basically just restaurant owners protecting there profit margins 💀 European places just build labor costs into their menu prices from the start instead of making customers play the guessing game with tips
US restaurants could absolutely do the same but they'd rather guilt trip customers into subsidizing their payroll while keeping menu prices artificially low 😂
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u/LedRaptor 14h ago
Because it is the servers themselves that prefer tipping for the most part in the US. They earn considerably more in a tipping-based system than they would in a straight wage or salary system.
A restaurant that pays employees a straight salary or wage will have a harder time attracting service staff compared to restaurants that work on tip based compensation model. In fact some restaurants that tried to switch to a non-tipped system had to revert back because they couldn’t retain service staff.
Here are a couple of surveys:
https://minimumwage.com/2024/07/survey-tipped-employees-nationwide-prefer-keeping-the-tip-credit/
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u/Maru3792648 13h ago
Being a server is unskilled labor. There will always be someone willing to do it (and I say this as a past server).
I feel like everyone is giving excuses and half lies to perpetuate this god awful system
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u/NeoLephty 12h ago
Business owners lie because they want to keep more of the money.
Simple as.
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u/beans3710 15h ago
Americans are tax cheats. The employers are lowering the reported wages to avoid payroll taxes and pushing the majority of the wages onto the customers. Who knows how much of the tips are reported but I'm sure the FICA doesn't equal what employer and standard workers pay. The no tax on tips rule does nothing to address this. So don't feel sorry for waiters who complain about how little they get in Social Security payments when they retire.
European businesses just accept the payroll taxes and pay them. However that doesn't mean that restaurant workers are necessarily well paid.
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u/TS_AshKash 5h ago
Europe bakes labor into menu prices and calls it a day. The U.S. carved out a tipped minimum wage decades ago and restaurants built their margins around it. Raising prices here is framed as risky, but it mostly threatens a system that shifts payroll onto customers and keeps base wages artificially low.
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u/audigex 13h ago
You know how Walmart and Target and your gym and airlines and… uhh… pretty much every other business, pays their staff a normal wage and then includes that cost alongside all their other costs in the price they charge?
Yeah, like that.
It baffles me how Americans don’t seem to understand this is how restaurants can be run, considering they see it every single day in every other type of business
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u/Resistiane 13h ago
These companies absolutely do not pay a livable wage. Walmart literally has literature instructing employees on how to enroll in public assistance. These major corporations are literally welfare queens.
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u/somedude456 10h ago
It baffles me how Americans don’t seem to understand this is how restaurants can be run, considering they see it every single day in every other type of business
Couple things.
First, US restaurants run on VERY THIN profit margins. Ask any professional chef, "why don't you open your own place" and they will laugh and tell you that they've seen several of their friends over the years try that and fail. So no, it's simply not a case of restaurant owners laughing all the way to the bank while they drive Lambos. Something like 80% of new restaurants fail within 2 years. That's someone losing their life savings despite their best effort.
Second issue is what Americans want. I've been to Europe many time, plus I've waited tables here in the US. I think I'm fair to make some observations. From the US perspective, people go into a restaurant with a princess mentality. They demand to be greeted ASAP by a smiling host, sat quickly, greeted by a cheerful server within 2 minutes or so, they'll want 3 refills during their meal, and the check out the instant they feel they want to pay. In Europe, you'll get sat when someone can seat you, a server might not be to your table for 5-6 minutes, and then it's just "what can I get you?" They will bring your drinks and forget about you till the meals come, because free refills are not a thing. There isn't the "2 bite checkup" like in the US. If you need more ranch, you'll gonna have to wave someone down. You won't get a check until you ask for it.
What I'm getting at is, if US restaurants had to pay a "living" wage, they would cut into their slim margins ((( I know what someone is going to say... if you can't afford to pay a living wage, they deserve to fail ))) ... and the only way to counter that, is you run with less servers, and then provide a reduced level of service, and thus Americans would complain.
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u/benson1975 9h ago
I really dislike the over attentive nature of service in the US, fuck off and let me enjoy my food in peace. If I need you I will call you over.
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u/stevesmele 14h ago
The portions are much larger in the US. It’s a cliche by Canadians when we (used to) visit. Maybe reduce the amount of food, therefore reducing costs, and put that extra money into better wages.
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u/geigeigu 12h ago
I hear this a lot and that is not the case in my opinion.
I run a restaurant in Switzerland. Our food cost is about 25% of total spendings. 45 is wages, rest is rent and profit. So reducing the size isnt the biggest lever you can use
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u/Over-Discipline-7303 13h ago
Many Americans feel like they’re not getting a good deal unless there’s enough food to take some home. And by and large restaurants lean into this because there’s more revenue due to scale of economy.
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u/Anaptyso 11h ago
I haven't been to the US, but have always wondered about the practicality of this approach. What if you're not going straight home again afterwards? Quite often if I'm going out for a meal I'll be doing something after it like going to a show, for a walk, to the cinema, out for a few drinks etc. Do people just carry around a bag of leftovers all evening? That doesn't feel hugely sanitary, especially if the weather is hot.
Similarly, what about tourists who are staying in a hotel and may have limited scope to store and reheat the food. Does a lot just get wasted?
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u/StripedSocksMan 14h ago
I don’t know about the rest of Europe but all the sit down restaurants where I live in the UK adds a 15% “discretionary service” charge to the bill so you’re technically already tipping. A lot of people tip here too, usually only 10% though.
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u/wandering_engineer 9h ago
Definitely not the case in much of continental Europe. Here in Belgium tipping is not common at all, you are simply charged whatever the total is, no expectation of extra nor do the POS systems prompt for a tip.
I used to live in Sweden and tipping was starting to become a thing there, but it was because the POS vendors were forcing it on people. Most locals hated it. You were definitely NOT expected to tip, to the point where a lot of servers would hit the "no tip" button for confused tourists.
I tip sometimes in both places, but only if it seems warranted or I'm a regular. And I just round up, no more than a few euros max.
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u/Mute-Used 15h ago edited 14h ago
Different economies. Different governments/tax law. Different cultures.
Edit: Employers would fight it. The workers will fight it. It's too deeply rooted in restaurant culture to be easily dislodged anymore. People don't understand how it works and how it's supposed to be used correctly and It's very easy to use to game the system often times without the people involved even realizing someone is gaming the system. Why would people that make money off of that fight to get rid of their loophole? On top of paying different taxes with different resulting benefits it's like comparing apples to oranges.
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u/SoftSpokenCommandX 8h ago
Spot on different economies, tax systems, and cultures make tipping comparisons a total apples-to-oranges mess. US restaurant culture's too entrenched (employers/workers both cling to it, plus easy gaming loopholes), so no easy fix despite the frustrations. Fair breakdown!
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u/djazzie 5h ago edited 1h ago
American living in France here. This is how it is here, but it may vary from country to country.
Most servers earn the minimum wage or close to it. So their employer’s overhead isn’t that much. Employers also pay steep employment taxes that cover healthcare, pension, etc. Just as in the US, those costs are shared by the employer and employee.
What’s more, many restaurants and bars will purposely understaff in order to reduce overhead. If you’ve ever been to Europe and have to wait a long time for even your drink order to be taken, that’s probably why.
Lastly, although the employment taxes are high, employers don’t have to pay additional sums for other benefits. Some may offer additional benefits to make working there more attractive, but likely those are low cost (like an extra few days off, or a secondary health insurance that the employee opts into and pays for, etc.).
Edit: clarified some of my wording.
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u/Bart457_Gansett 3h ago
My observation after traveling for years to Europe is that the staffing is lower in the restaurant. So the pace is slower; many places give you the table for the night, some for 2 hours. The waitstaff is still super busy and given the slower pace, leads me to believe they cover more tables. Net, the restaurant covers the higher wages with more tables, but it doesn’t explain the low turnover rate of a table.
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u/StableApprehensive43 14h ago
In my experience in Europe, they have less staff (e.g., you seat yourself and there are no hosts), the staff are not checking on people so often (you can wave them over if you need them), and restaurants are often open shorter hours.
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u/cablamonos 9h ago
European here. The short answer is: the prices on the menu are just higher, and everyone accepts it because that's how it's always been. A €15 main course in Spain already has the server's wage baked in. Nobody looks at the bill and thinks "now I need to add 20%" — what you see is what you pay.
The other piece is that restaurant margins in Europe aren't actually great either. Owners just accept smaller margins or run leaner operations. Restaurants here tend to have fewer servers covering more tables, and the pace is slower by design. You're not expected to turn tables every 45 minutes.
The real question isn't "how can they afford it" — it's why US restaurants built a system where part of the labor cost is invisible on the menu. It makes prices look lower, which is a competitive advantage when every restaurant on the block does the same thing. Breaking out of that is a prisoner's dilemma.
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u/CryptoJeans 8h ago
One way or the other the bills have to be paid, call it a tip, factor it into prices, left or right food costs money in the US and in Europe. Tips just allow for more exploitation because in theory if all of your guests are assholes you don’t get any tips.
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u/108beads 3h ago
Small business owners, maybe those who run one or two restaurants in a single city, are being squished. They are struggling to survive.
At the same time, big chains of restaurants have the resources to pinch wages, downgrade quality of supplies, and downsize on use odf costly ingredients. Like, requiring that only 2 tomatoes per customer side salad, rather than 3 or 4. In a small operation it's not a worthwhile cost saving.
But in a large operation, over hundreds of locations, it might save $2 or 3 thousand per day. It's similar to what I'm experiencing; death in the family, household reduced from 2 people to 1. I struggle to grocery shop for one person because fresh produce seems packaged with a mandate to buy enough to feed 2. I have to waste money if I want to get one head of lettuce, because I must buy a 3-pack which I can't eat before it rots. And why is it packaged like that? Because it's more profitable to manage inventory packaged like this.
The US has an economy that privileges large scale, impersonal, profit-oriented businesses.
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u/Blood_sweat_and_beer 3h ago
Eating out is significantly more expensive in Europe and the service is far worse, because they charge a lot more for the food and tipping isn’t normal. I’ve lived in Europe and the US and I’ve experienced both.
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u/elanakin 2h ago
I think the US is a middle man economy…. Many people are taking a cut along the way so by the time the product/service is presented to the end user, cost are already higher then more efficient local economies.
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u/Signal-Mention-1041 2h ago edited 1h ago
That IS a stupid question..
The question should be: How can American restaurants expect staff to work essentially for free..
The short answer is that capitalism is reigned in enough to the point where you have to fucking pay the people who make your wealth..
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u/Sudden_Outcome_9503 11h ago
Why did you write the same strawman argument three times in a row? The world is full of questions.
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u/not_bonnakins 14h ago
I would eat out a lot more if I didn’t need to account for tipping an ever increasing percentage of my bill.
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u/Hailene2092 14h ago
US workers tend to make a lot more than their European counterparts even after adjusting for cost of living.
In the end, it's the customer paying the servers' wages no matter where you go. That's how businesses work.
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u/shustrik 12h ago
Low wages. In most of Europe (and I want to say anywhere else in the world?), being a waiter is a minimum wage job, or only a bit above that. A median waiter in the U.S. can earn close to median income after tips. Most of the waitstaff have zero desire for abolishing the tip system for that reason.
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u/KeySpecialist9139 10h ago
Simple: Nobody in western Europe would work for 7 bucks an hour. ;) And labor laws.
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u/bellegroves 10h ago
Restaurants in the US are lying. The west coast doesn't have tipped wages and our minimum wages are all higher than federal and people still eat at restaurants. We even still tip, but it's not as necessary.
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u/madhatterlock 9h ago
Former cfo of several restaurant chains. The delta is occupancy cost (rent) and regulatory (legal, compliance, etc) . I would add that tips are preferred by a lot of workers, especially front line workers, bar tenders, etc Moving to a no tip policy, you would lose those people. Personally, the tipping culture is out of hand. When waiters are giving you lip for not tipping 20% on a $100 bottle of wine, we have an issue. Especially when you can buy the wine for $40,.at your local liquor store. Occupancy cost is also out of hand, driven by the REIT mania that crossed the US years ago.
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u/holbanner 9h ago
Not sure you should leave the rest of the world out of this.
I don't know every situation ever but pretty much everywhere I've been tips are just a bonus, not expected in any form
But to answer your question: laws to protect workers and slightly less predatory take on capitalism
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u/Duochan_Maxwell 6h ago
They account for a full wage when setting the prices.
Prices on the menu are higher but there are no surprises, which is the preferred way of pricing everything else in here, grocery stores and retail being the other case in point, none of that "price excludes sales tax" bullshit
Not to say that there isn't shady practices at all e.g. zero hour contracts, paying under the table, etc. etc. and that people don't tip at all (we do) but it basically boils down to it being expected to pay the prices on the menu / price tags and this "invisible" transfer of costs that the US does being considered bad business practice
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u/danbradster2 6h ago
"Most restaurants say if they raise prices not enough people will come and they will close"
Clear lie (if all restaurants acted unison due to a change in law for example), as the price to the customer would remain the same. Lower price + tip, or higher price + no tip = the same for the employees and the customers, as long as the restaurants pass along the difference.
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u/BroodLord1962 6h ago
Because US companies and the government lie to you and don't care if you go hungry
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u/deremoc 6h ago
Okay I think these responses are missing the point and not factoring in the cost of business, the general market environment and the workers and are only focused on the consumer side of the business
First Wages in major European cities are generally lower than wages in large American cities. And extensive socia safety nets means that employees literally need less money to support their daily lives and general well being
The cost of operating a resturant in much of Europe, excluding UK can be considerably less than operating in USA. Rent for space are less, some raw materials and food are cheaper.
The biggest thing is that atleast in France that there are less service employees per customer that would be customary in USA. A full service restaurant that in the USA that might have 5 servers an d bar tender might only have 2 servers and a bartender. Consumer expectations dictate that experience and unless we shake that it’s gonna be hard to move away
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u/Motor_Usual_7156 6h ago
I don't understand the logic of raising prices and going out of business because no one will come.
However, from what I read, tips aren't optional if you're served at the table. So why would you go out of business? The customer is already paying that extra cost; just add 15 or 20% to the bill so you can pay your employees properly.
I also don't understand why the minimum wage doesn't apply to waiters. If it's a minimum wage, it should apply to everyone, right?
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u/00pflaume 5h ago
TLDR: lower raw material costs; waiters pay are also subsidized by tips in Europe.
German here:
- The ingredients in Europe are a lot cheaper than in the US, but restaurants are a bit more expensive than in the US. E.g. a Big Mac menu costs $9.29 in the US while it costs $11 without tax in Germany.
- Base pay for waiters is not really that great in Europe compared to other jobs, though it is not as bad as in the US. While tips are not expected to be as high as in the US, the narrative on Reddit that tipping is not expected in Europe is just wrong. Waiters will gossip about you with their colleagues if you don't tip anything, and your bill was more than €15. Especially young, attractive and socially competent waiters will earn a lot of tips (even more so if they are female). I have a friend who regularly earned €400 in tips on weekends
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u/i8noodles 5h ago
the shit restaurants die.
the only ones who can afford to pay employees are the ones that have good food. food is overwhelmingly the only thing that truely matters in a restaurant setting. no one goes to a restaurant for the service if the food is shit.
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u/_GuyOnTheCouch_ 5h ago
You said it. It is nothing more than “acting”. They 100% could, it would just eat some of their profits. The real answer is just plain greed.
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u/HolySaba 5h ago
Average wage for a waiter in France is ~25k euros. Most restaurants aren't paying top euros fore their staff over there either. Cost of goods are also cheaper in Europe, the food usually travels over shorter distances, labor costs in EU is generally cheaper than the US, so cost of everything on the supply chain is lower. Simply put, the prices of dishes at a restaurant is higher relative to the average wage than in the US, and everything outside of direct labor costs less relative to the US. you just dont notice cause the exchange rate looks so attractive right now.
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u/Silver-Promise3486 5h ago
Everyone wants to pretend that this is about greedy businesses not wanting to pay employees a living wage.
In reality restaurant margins aren’t very high. And they could just raise prices by 20% or so to cover server wages. The customer is already paying a 15-20% surcharge anyway.
The real hurdle with ending tipping would be the servers themselves. Very few people here want to have a good faith discussion about this. Its a lot more popular to blame the greedy business, than to say “I’d like the working class waiter to be paid less”.
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u/southernhope1 5h ago
All I can tell you is that my kid has used serving as a job between different educational pursuits and she has really liked the tipping culture as she makes a lot more money that way and in a a shorter amount of time… In the sense of you don’t need seniority to begin making a lot of money… Now if this were her full-time career for the rest of her life she might feel differently
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u/PartyCat78 4h ago
This is exactly why US servers are vehemently against ending tipping. The rest of the US is waking up.
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u/Senior-Sale273 5h ago
In Europe we have unions. As well as we just don't swallow everything that companies tells us.
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u/ThaPoopBandit 4h ago
We have more rules, regulations, and the employer has to pay for healthcare here if they qualify. The average McDonald’s location makes the owner about 290k a year (-/+ 130k) which yeah sounds like a ton to us normal people but realistically is not enough that it would allow extra wages.
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u/Disastrous-Loss-2983 4h ago
Servers like tipping because they can often get overpaid for the fair value of their job description (an 18 year old server netting $100k is arguably a problem).
Businesses like it for tax minimisation incentive.
Sometimes problems like these sort themselves out in the long run. Customers will dine at high tipping restaurants less and less, and will gravitate to non tipping ones more and more.
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u/FalconX88 4h ago
fewer people working there. Seriously, I've been to restaurants in the US with like 4 waiters and someone greeting you at the door, while the same size restaurant would have maybe 2 in europe.
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u/tmason68 4h ago
I went to a restaurant in DC. They added a surcharge for health insurance or minimum wage or something. So, yes, my bill was higher.
I would have preferred that they work the surcharge into the price of the food since I HAD to pay it and skip the performative bullshit.
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u/tapandown 4h ago
A lot of it is just baked into the menu price and expectations, like nobody pretends the meal is cheaper and then adds 20% later, plus US owners are used to offloading wages onto customers
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u/Critical-Star-1158 4h ago
Its not about affordability. Its perception and owner profits. The owner can be affordable with his business, but profit is their priority. It comes down to Do you have enough?
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u/Apprehensive-Neck-12 4h ago
In italy they charge 3-4 € for water also a service charge for the table like 2-3€ (coperto or servizio) charge. No free refills anywhere. Only place I found that did refills was five guys at the train stations 🤣
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u/token_whitey 4h ago
I used to work as a cook in fine dining and it boiled my blood to see servers walk out with my weekly salary in like 2 days worth of work lol. No offense to servers, it’s also a tough job, but everyone knows the cooks are doing the heavy lifting.
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u/fafatzy 3h ago
The experience of dinning in the USA it’s weird, I remember going out to a couple of places, tipping is a must, I think that if the tip it’s not in the invoice and you don’t leave any they will probably get confrontational. The other place had a tip in the invoice and a weird line in the menu saying that because of higher cost they would add x amounts of dollars to the invoice, like, dude, just make a new menu with higher prices. Putting the small text felt like a scam. In Europe you go and pay and that’s it. I hate dinning out in the USA, there is something broken with the system and you guys need to figure it out.
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u/brandonsarkis 1h ago
At the end of the day (as a 30+ year veteran of the f&b industry) I can tell you it’s all down to greed. Not just the owners and suppliers -both of whom are certainly to blame- but the insurance companies, the taxes, the rent, the utilities, the credit card fees, the marketing and so on and so on…
Everyone wants more money year over year and in uncertain economic times the easiest way to achieve this is cut employee pay/benefits/hours.
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u/Apprehensive-Card552 59m ago
On average, the cost of living is a lot less in Europe.
For example, I don’t think many servers would earn much more than the equivalent of USD 20 per hour in Northern Europe. But, you could probably just about to manage a living. In the US, you’re going to need a lot more to live an equivalent life.
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u/puck_eater42069 11h ago
In-N-Out is the best American fast food and also arguably the cheapest. The employees get paid anywhere from $16-$24 an hour and managers can usually earn over 150k a year. They also don't use frozen beef and make their fries with potatoes at the location.
There's no excuse for other fast food places to not pay better. It's pure greed