Comments by "nexus1g" (@nexus1g) on "Papa John's Founder: I Can't Stop Saying The N-Word" video.
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@professorswaggamuffin7572 That depends on the cost of living where you're at whether it's too low or not.
Yes, they have to raise prices. The food industry runs on a very thin profit margins. They cannot simply absorb the costs of higher pay with profits. The customer must pay more. I've done my due diligence on this including comparing tipping and non-tipping countries, cost of food, employee pay, etc. Without tipping, prices for food is higher, employee pay is generally lower, fewer people are eating out. Even when it comes to a relatively poor country like Chile, where tipping is strong in their culture, a lot more of their people eat out regularly as compared to someplace like Australia where tipping is not at all customary. That means that for a place like Chile, making up for the base cost of operations is spread out over more dishes served, leading to lower cost per dish not just for lower employee pay from the restaurant but also because the cost of operation per dish is much lower.
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@professorswaggamuffin7572 sigh... Ok, first, if you're making $10 an hour, at least in an urban area, delivering pizza, you suck. If you're in a rural area, $10 an hour isn't that bad because cost of living is also significantly lower.
Second, sometimes people don't tip, but more often than not, they do.
Third, without tips, the menu prices are higher leading to fewer people ordering and employees are paid less on salary than on tips because the market won't bear such high initial menu prices to keep the pay the same as with tips. With or without tips, it's the customer who gives the money that goes to the employee because that's how it works. A company doesn't have money until the customer gives it to them. In this case, the customer is able to give the money to the employee directly who keeps that entire share, there are more orders because of low initial cost and that's a much better prospect for the employee and the company.
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