Where The Money Goes

     The main cost of just about everything is labor. It may be hidden. It may be indirect. But in nearly every case, the greater part of the price of what you’re paying for is labor.

     My father, who worked in provisioning restaurants and hotels, educated me about this long ago. He taught me to think about the many people involved in getting my purchase to me. Grocery shopping, he said, is about paying the wholesalers, the truckers, the stock boys, the cashiers, and the owner of the store. Dinner out is about paying the cooks, the waiters, the busboys, and the owner of the restaurant. Your money goes to people above all; the material goods are cheap by comparison.

     It’s when labor gets more expensive that significant price increases occur. These days, with prices rising all around us, what those increases are funding is the regiment of workers who take part in conveying retail goods to us. When workers want to live better than they do, they press for wage increases. When their employers agree to such increases, he passes the cost increment along to the purchaser.

     Just now, there’s an ongoing contretemps about tipping restaurant workers, particularly the waiters and waitresses who convey prepared food from the kitchen to the customer’s table. Waiters want larger tips than ever before in the history of restaurant dining. They’re getting strident about it, too. They’ve mounted public campaigns for tips of 30% to 50% of the “menu price” of the meal to become the norm. Those campaigns have drawn a great deal of attention – and no small amount of resentment.

     By and large, waiters aren’t doing better for it. Persons who might have dined out happily a year or two ago are rethinking their choices to do so, in part out of discomfort about the tipping issue. So average tip amounts have not risen significantly, while total restaurant patronage has declined somewhat. That suggests that the campaign has backfired.

     But that desire for more compensation has interesting ways of making itself felt:

     Brian Powell, 45, told Fox News Digital that he and his wife were waiting to catch a flight out of Salt Lake City when she purchased three milkshakes from the airport's Shake Shack location.
     "My wife came to me after buying some shakes and said, 'They charged me more after I didn't tip,'" Powell told Fox News Digital during a Zoom interview from London, where he was vacationing with his wife. "And I thought it was a little interesting."
     Powell said he had visited the location several times before and had never noticed anything similar. Admitting that he was "a bit skeptical," Powell said he returned to the kiosk with his wife and recreated the order while recording the process on his phone.
     "We basically went up and duplicated our order, and the same thing happened," Powell said.
     The video shows two of the three shakes initially listed at $5.99 each. After "no tip" is selected, the kiosk displays a notice saying there has been a pricing update before the shakes appear at $6.49 each — an increase of 50 cents per drink.
     Shake Shack told Fox News Digital the price change was caused by a technology error and that charging customers more for declining to tip is not company policy.

     I know nothing about Shake Shack. I do know that the scriptwriters for Pulp Fiction must be a little disturbed that the price of a shake has risen to $5.99. Yes, the movie was made 32 years ago, but still!

     However, I can’t accept the claim that the price increases were due to a tech glitch. Today, with “pooling” on the rise, more people than ever before are reaching for a piece of the tip pot. Shake Shack may not want to be open about it, but the probabilities favor the “no tip” price increases being a deliberate move. What does it say that customers who did agree to tip didn’t face such increases?

     Just one more of those “May you live in interesting times” phenomena!