Reaction & Commentary
Consumers have reached the Tipping Point of tipping in fact this phenomena is now being called tip fatigue this in turn is leading some restaurants and businesses to impose automatic tips on their bills today we’re looking at tip fatigue and what it indicates where the U.S economy is heading we’ll also look at the
Controversy surrounding the federal minimum wage and whether California will kill McDonald’s if it were to raise the minimum wage in the fast food industry to 22 all this to say you get a better idea of car affordability after you consider these life circumstances Americans love eating out that’s why
During the pandemic when Americans were mostly stuck indoors we all shared one thing in common we started loving our deliveries more than ever before be it through Amazon which by the way doubled profits during the pandemic but most especially food deliveries like ubereats and doordash just look at the stats the
Study by the Columbia business school found that the pandemic was responsible for 85 percent growth in the food delivery business actually this phenomenon wasn’t isolated to just the U.S it was Global especially in anglo-american countries like the UK Canada and Australia and businesses were quick to jump on the train they quickly
Adapted the man and because of coveted protocols the number of contactless payment methods Spike well this was a new convenience it’s causing Americans to spend more because the touchscreen systems typically solicit consumers for suggested tips ranging from 15 to 25 percent now during the pandemic Americans were fine with that they show
Generally more compassion and appreciation in light of their circum stances and they tipped more than ever before but fast forward to today we’re out of the woods in many ways we’re back to normal Daily Grind things the difference is now there are more contactless payment systems than ever
Before but also we have higher inflation than ever before the pandemic people are already feeling the pinch of inflation so now when businesses prompt consumers for tips consumers are less motivated to be generous Americans are plain tired of it and that’s why there’s a new term called tip fatigue see in the numbers
Due to inflation 17 percent are tipping less than before and 54 don’t like being pressured to tip this is why some restaurants are pretty much forcing customers to tip basically they just add an automatic 20 gratuity to a customer’s bill for starters they can be pretty deceptive at minimum if a restaurant
Practices this they should at least put a clear sign so consumers know about it I was almost fooled in a restaurant when there was a 20 tip and then they have under that suggested tips but I didn’t put any because it already had twenty percent of them now of course this isn’t
Always the case indeed even if a restaurant post a sign automatic tipping in general isn’t a common practice here in the states so it’s putting many customers off some even feel it’s unethical it’s supposed to be a tip for good service the thing is we Americans have a history and culture of freedom
And choice we like the option to choose how much to tip as we wish no one likes being forced to do it in my opinion it’s better for these restaurants to just raise the prices on their menu so as long as it gives you the option to
Choose your tip the thing is in the U.S workers in the service industry rely on tips that’s because the minimum wage is pretty much not a livable wage here are three sad facts first the U.S federal minimum wage is 7.25 cents an hour so if you’re working full-time at minimum wage
That means you’re making 1 160 each month they wouldn’t even cover your basic needs like rent food in most cities so it’s clearly not a livable earning secondly the federal minimum wage hasn’t changed since 2009 despite the normal inflation we typically see each year and I’m not even accounting
For the unusually high inflation we’ve been seeing in recent sometimes but if you think that’s bad we’re not done yet here’s the worst part of it the federal minimum wage remained unchanged despite inflation means that the value of the hourly wages actually decreased over time in other words those earning
Minimum wage in effect have less purchasing power if you were to adjust this value to account for inflation well we can see that the purchasing power of the federal minimum wage effectively decreased by 26 percent right now there are at least 1.25 million Americans who earn at or below the federal minimum
Wage that’s just over one percent of the American population actually back in January 2022. Biden raised the minimum wage for federal employees and contractors to 15 but here’s the thing that minimum wage doesn’t apply to people outside of the federal sector President Biden stated that one day all
Workers here in the U.S will enjoy a federal minimum wage of fifteen dollars despite his wishful thinking efforts for that have stalled we’re talking about some 30 to 32 million Americans who earn less than 15 bucks an hour right now sub Congress were to raise the federal minimum wage we’re talking almost 10
Percent of the U.S population would benefit but here’s the thing well that would definitely help some 30 plus million Americans for sure the reality is that once that happens corporations will start charging consumers more for their products after all they’ll need to make up for the money they lose to pay
Their workers eventually prices for products and services will go up which will create its own ripple effect and ultimately feed him and all the way into the rental market so at the end of the day raising the minimum wage while good isn’t an absolute cure-all for solving the problems of livable wages
But when it comes to wages we need to look at the state level U.S states have the power to set a minimum wage in their own State boundaries as long as it meets the federal minimum wage level right now 30 states have a state minimum wage that’s higher than the federal minimum
Wage rate and that’s a good thing but five states all of which happen to be in the South don’t have a state minimum wage I’m talking about Alabama Louisiana Mississippi South Carolina and Tennessee two states George and Wyoming the state minimum wage that’s actually lower than the federal standard which to me doesn’t
Make any sense so in these seven states the federal minimum wage of 7.25 apply since all states are required to meet the minimum federal level as of January 2023 only three states have a minimum wage that’s above 15 bucks this includes Washington State at 15.74 cents an hour California at 15.50 and
Massachusetts at 15 an hour in June 2023 Connecticut will join that list when it increases State minimum wage to Fifteen dollars it’s good progress that these states are moving forward like that other states are set to join in years to come and actually this is starting to
Remove the spotlight from New York City four years ago New York City said its minimum wage to Fifteen dollars it was Progressive at its time a leader in fact but now it’s lagging behind and mind you New York City is literally the most expensive city to live in the entire U.S
And logic tells you that theoretically it should have the highest minimum wage in the U.S but that’s not the case today some 10 years ago New York was at the Forefront of a campaign called Fight for 15. this campaign began back in 2012. it started when workers walked out of
Dozens of food service joints in the city the workers demanded a minimum wage of 15 bucks an hour and to be allowed to form a union and actually they gained the backing of powerful labor unions I’m talking about New York hotel and gaming trades Council and also the Service
Employs international Union with their support the fight for 15 campaign was able to Spur a proposal to raise the minimum hourly wage for the majority of workers in New York City and they achieved it in fact the minimum wage increased from nine dollars to Fifteen dollars an hour over three years but in
Recent times many cities like La Washington DC and Denver have increased their minimum wages accordingly for example the minimum wage in Washington DC is 16.10 an hour but for some reason New York City hasn’t budged despite inflation in the last four years did have passed since New York last raised
Its minimum wage the buying power that 15 bucks has dropped by around 15 percent in fact something else say that New York City workers have been set back four years to the time their minimum wage was 13 an hour others say that if New York doesn’t act soon to raise the
City’s minimum wage it will fall further behind its living costs will only continue to rise Miranda skyrocketing wages are not today due mainly to the higher inflation we’ve seen in 40 years some believe New York needs to raise its minimum wage to at least twenty dollars an hour but let’s shift attention to
California recently the California state senate passed a bill it gives a 10-person council the authority to raise the minimum wage to 22 an hour for fast food changes more than 100 locations nationally the council also has the authority to establish safety conditions of course California fast food workers
Are major fans of the new bill supporters say that the bill will Empower fast food workers and help solve wage stuff and unsafe working conditions but the Californian restaurant industry is afraid how this bill will affect restaurants and they’re also afraid of the example made set to other states
With this bill a McDonald franchisee with two locations would be subject to this bill but an owner of 25 restaurants is not part of a chain would be exempt McDonald’s rarely ever speaks out publicly against State legislation but the chain made an exception for this California Bill get this almost 10
Percent of U.S McDonald’s restaurants are located in California now technically McDonald’s only operates about five percent of its thirteen thousand plus U.S locations its franchisees operate 95 percent of them but that didn’t stop McDonald’s from lobbying on behalf of its franchisees McDonald’s is far from the only fast
Food chain in California that’s opposing this bill restaurants like Chick-fil-A Chipotle Mexican Grill yum brands and restaurant Brands International are just a few of the big names who spent big bucks to Lobby California lawmakers to oppose this legislation an industry group called The National Restaurant Association even spent 140 000 to fight
The bill within the three months since the bill was passed some 45 percent of California restaurant operators reported that business conditions were worse California governor Gavin Newsom hasn’t indicated if he’ll sign or veto the bill so we’ll have to wait and see if California will kill McDonald’s or not
But look with where the minimum wage is right now coupled with inflation it’s hard enough for many Americans to afford basic needs like renting food forget about getting an electric car in fact forget about getting any new car for that matter when you’re in those life circumstances having a car is a luxury
And a liability in public transportation carpooling Pride sharing or biking are your main options but now you tell me what’s the minimum wage in your state what do you think the federal minimum wage should increase to please share by commenting below if you like this video please like share and subscribe thanks
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