My wife and I thoroughly ignored our diets and had a tasty meal at a restaurant off our regular rotation. The helpful waitress offered to show me how to use the mini-tablet on the table to pay my bill with my credit card: I’m paying cash, I replied.
“Bless you.”
She explained that it took two weeks to get tips charged on cards.
A little research and I confirmed that’s now a common industry practice, with some employees forced to wait four weeks for their tip money.
Of course, the major restaurants chains settle accounts with the credit card issuers within a business day and even independent places wait just a few days.
In other words, employees give their bosses money to keep for an unnecessarily long time. Smart corporations make money off that float.
So, here’s how this relates to the recent United Auto Workers strike…
A major issue has been that union workers sacrificed to help save the manufactures when the industry nearly got flushed in 2008 and 2009. (Remember 15 years ago GM stood for Government Motors after billions in taxpayer aid?) Union workers allowed lower pay rates for new hires, accepted the end of their pension plans and made other concessions. Their understanding was that they would share in the rewards when the manufacturers rebounded.
Well, things got better for the industry. And, the manufacturers did share the wealth – with their executives.
GM chair Mary Barra earned $14.4 millions with extras in 2014. By 2022 her remunerations doubled to $29 million after a 34% pay jump in one year! Meanwhile, the industry balked at a 40% raise over four years for they who actually build the cars.
UAW folks seem to be getting 25% more over the next four and half years, or, about a 4½% raise each year, plus some better work rules. The union did not get what I consider a common sense, ‘we’re on the same team’ commitment to hold executive raises to the same rate as line workers. (I know, that’s socialism.)
Capitalism, alas, always pits workers against their employers. Companies and bosses want to do well. The less they share with workers the better they do. And, bosses from fast food franchisees in rural Missouri to corporate executives frequently lament the unreasonable wages they must pay to get and retain workers
Yet, despite this state raising its minimum wage from the federal $7.25 to the current – ordered by an initiative petition vote — $12.00 an hour we haven’t seen a decline in the number of Dairy Queens or McDonalds about Missouri. Per their SEC filings, most big businesses are doing great too. Yes, bosses gripe but competent managers makes things work. (Even if that means starting fast food workers at $14 an hour on Telegraph Road in Oakville and $17 in other metro neighborhoods.)
Which brings us back to that hard working waitress forced to wait two weeks for her tip…Companies do such things to their employees because they can. Unions can’t eliminate the basic tension between workers and management but they can soften the edges. Say, all tips paid at the end of the week?
Glenn Koenen
Photograph retrieved from the Library of Congress, <www.loc.gov/item/cmns000177/>