More Tipping

We need more tipping. Yes, read that again, we need more tipping. You are probably confused right now and think this is a bit of a hot take. Hear me out.

Tipping in efficient.

There has been a significant backlash against tipping since the COVID-19 pandemic. It is expected. Asking for tips looks like passing the company responsibilities to the customer. This may be the case but it results in more money in the pocket of the consumer and more money in the pocket of the worker.

Consider the alternative. If tipping were banned, then industries where tipping is customary will need to increase wages. On the surface this looks like a good outcome. People get paid more for their work and you get happy workers. However, you need to fund these wage increases with price increases. So far it looks good. Consumers pay more for the product, the additional cost is passed along to the worker. That would be great if you lived in a place without a functioning government that did not collect taxes. It isn’t just the income tax on the wages, and yes the tips should be declared. There are other taxes eating away at the transfer of resources from the consumer to the worker.

First you will have to deal with sales taxes. Most goods and services are taxed on their retail value. So, for argument’s sake you went out for dinner and the appropriate tip was $10. If tipping was banned, then the total bill value should go up $10 so what you would have paid in tip to the worker is collected and passed onto the worker in the form of greater wages. If you live where I do in Ontario, Canada you then have to pay 13% in Goods and Services Tax which would be an additional $1.30 out of your pocket to pass the same amount to the worker.

Secondly, you have to consider payroll taxes in your jurisdiction. I’m not talking about income tax, I’m talking about deductions from the paycheque or amounts employers must pay to employ people. This money will erode the amount of cash that reaches the employee.

Tipping is more efficient. Even if the worker declares all their tips, they will get more money and the consumer will pay less money than if the employer charged a higher amount for the good or service and passed the equivalent of today’s tip on to the employee. Governments need money and they will find any way to get it.

So, tip your servers and anyone else who deserves it and be grateful that they are getting more and you are giving less.

The Value of Standards

For a long time I was a Standards Officer. It was my job to ensure that things happened the way they are supposed to. It's not always easy to do so but it is important.

Tonight, I went for supper in a restaurant in the Fairmont Chateau Frontenac, in Quebec City. The meal was impeccable. A big reason it was so good is the organization has high and uncompromising standards for their meals.

Operating to a high standard can be expensive. It can lead to significant training costs and large rejection rates. That being said, having high standards and projecting that image, can allow you to charge a premium price. The meal I had tonight was not cheap but I felt I received value for my money.

I understand that not everyone can be The Fairmont. That being said, everyone can do the best job possible within the resources they have. Anything less is not maximizing value for yourself or the people you serve.

Reliability

Yesterday my big screen television stopped working. I think it is fixable but I'm not that skilled at working on electronics and since it cost more than may first car, I'm going to wait for the guy to take a look at it. Since I bought the extended warranty I might as well use it in this case.


My whole incident with my television has got me thinking about reliability. We value reliability. Up until yesterday, my TV was reliable. The Barenaked Ladies sing about how if they had a million dollars they would buy you a nice reliable automobile. But, what makes something or someone for that matter, reliable?


I think reliability comes down to a combination of two requirements, performance and timing.


To be considered reliable the item or person must perform as advertised.  It must do what it is supposed to do.  It is supposed to do it in the manner that is expected.


To be considered reliable the item or person must perform when called upon. It must meet the deadline or start the activity when demanded.


Without both components someone or something cannot be considered reliable. A car that only starts when the outside air temperature is twenty degrees Celsius, does perform as expected but not necessarily when requested and we don't consider it reliable. The whole thing is probably more important when you apply it to people. Good but late work may no longer be relevant and poor but on time work isn't much use but if you can do good work and be completed on time the world will become your oyster. Sometimes you are in the groove and sometimes you are not but if you keep working back towards being reliable, people will put up with a lot from you.


It's a bit of a surprise to me that my television not working made me think about how to be a better person but the world can be funny that way. You never know what may strike you as funny, sad, or important.