Forcing waiters and waitresses to survive on tips from customers rather than normal wages is a pointless, gross, and uniquely American custom that, in the past several years, a handful of progressive restaurant owners have attempted to do away with, often with positive results. On Wednesday, one of the most famous names in the dining business says he’s about to join their ranks. Danny Meyer, CEO of Union Square Hospitality Group, has announced that he plans to gradually eliminate tipping at the company’s 13 restaurants and charge higher menu prices in order to pay staff fairly. Diners won’t simply be discouraged from leaving a gratuity; their checks won’t even include a line to write one in.
Meyer is perhaps best known today as the founder of Shake Shack, now an independent public company. But he has long been one of the most prominent and influential restaurateurs in New York City, the force behind celebrated establishments including Gramercy Tavern, Union Square Cafe, Blue Smoke, and the Modern at the Museum of Modern Art. If anybody is capable of turning the tide against tipping, at least in the upper echelons of the restaurant world, it may be him.
What, exactly, is wrong with tipping? As Brian Palmer has explained at Slate, more or less everything. To start, leaving a waiter’s pay in the hands of fickle customers reeks of classism. But in theory, handing restaurant patrons the power to tip is at least supposed to motivate better, more attentive service. This fails in practice because humans turn out to be pretty arbitrary about their tipping behavior. Research has shown that, overall, the amount diners leave has very little to do with their level of satisfaction, but can be influenced by things like whether they’ve had a bit to drink or a waiter draws a smiley face on their check. Some people vary uptheir tips a little based on their experience. Some vary them up a lot. And some don’t vary them at all. All of this creates little incentive for waiters and waitresses to do anything but turn over as many tables as possible with the hope of lucking into someone who will generously tack a bit more onto their bill.
Whole Foods Market co-CEO and co-founder John Mackey has never hidden his disdain for labor unions. “Today most employees feel that unions are not necessary to represent them,” he told my colleague Josh Harkinson in 2013. That same year, Mackey echoed the sentiment in an interview with Yahoo Finance’s the Daily Ticker. “Why would they want to join a union? Whole Foods has been one of [Fortune‘s] 100 best companies to work for for the last 16 years. We’re not so much anti-union as beyond unions.”
On September 25, the natural-foods giant gave its workers reason to question their founder’s argument. Whole Foods announced it was eliminating 1,500 jobs—about 1.6 percent of its American workforce—”as part of its ongoing commitment to lower prices for its customers and invest in technology upgrades while improving its cost structure.” The focus on cost-cutting isn’t surprising—Whole Foods stock has lost 40 percent of its value since February, thanks to lower-than-expected earnings and an overcharging scandal in its New York City stores.
Sources inside the company told me that the layoffs targeted experienced full-time workers who had moved up the Whole Foods pay ladder. In one store in the chain’s South region, “all supervisors in all departments were demoted to getting paid $11 an hour from $13-16 per hour and were told they were no longer supervisors, but still had to fulfill all of the same duties, effective immediately,” according to an employee who works there.
I ran that claim past a spokesman at the company’s Austin headquarters. “We appreciate you taking the time to reach out and help us to set the record straight,” he responded, pointing to the press release quoted above. When I reminded him that my question was about wage cuts, not the announced job cuts, he declined to comment.
Another source, from one of Whole Foods’ regional offices, told me the corporate headquarters had ordered all 11 regional offices to reduce expenses. “They’ve all done it differently,” the source said. “In some regions, they’ve reduced the number of in-store buyers—people who order products for the shelves.”
I spoke with a buyer from the South region who learned on Saturday that, after more than 20 years with the company, his position had been eliminated. He and other laid-off colleagues received a letter listing their options: They could reapply for an open position or “leave Whole Foods immediately” with a severance package—which will be sweetened if they agree not to reapply for six months. If laid-off employees manage to snag a new position that pays less than the old one did, they are eligible for a temporary pay bump to match the old wage, but only for a limited time.
Those fortunate enough to get rehired at the same pay rate may be signing up for more work and responsibility. At his store, the laid-off buyer told me, ex-workers are now vying for buyer positions that used to be handled by two people—who “can barely get their work done as it is.”
My regional office source told me that the layoffs and downscaling of wages for experienced staffers is part of a deliberate shift toward part-time employees. Whole Foods has “always been an 80/20 company,” the source said, referring to it ratio of full- to part-time workers. Recently, a “mandate came down to go 70/30, and there are regions that are below that: 65/35 or 60/40.” Store managers are “incentivized to bring down that ratio,” the source added.
Despite support at the top, gender equality is a long way off at most U.S. companies. A study by Lean In and McKinsey reveals why—and what employees and companies can do about it.
A new LeanIn.Org and McKinsey & Co. study on Women in the Workplace finds that corporate diversity initiatives aren’t helping women break the glass ceiling. WSJ’s Shelby Holliday takes a closer look at the reasons why and other key takeaways from the data. Photo: iStock/Getty Images
Why aren’t there more women in the upper ranks of corporate America?
Cue the broken record: Women rein in career plans to spend more time caring for family. What’s more, they are inherently less ambitious than men and don’t have the confidence that commands seats in the C-suite.
Not so fast.
Something else is happening on the way to the top. Women aren’t abandoning their careers in large numbers; motherhood, in fact, increases their appetite for winning promotions; and women overall don’t lack for ambition and confidence that they can take on big jobs. Yet when asked whether they want a top role in their companies or industries, a majority of women say they would rather not grab the brass ring.
Those are the findings of a major new study of women in the workplace conducted by LeanIn.Org and McKinsey & Co. The research, which gathered data on promotions, attrition and trajectories from 118 companies and surveyed nearly 30,000 men and women, is among the largest efforts to capture attitudes and data about working women. The study involved major North American companies and North American units of global ventures headquartered elsewhere. It reveals sharply different views of the workplace, in which women say they experience a playing field at work that is anything but level.
Roughly equal numbers of men and women say they want to be promoted—78% and 75%, respectively. But as men’s desire for big jobs intensifies in the course of their careers, only 43% of women said they want to be a top executive, compared with 53% of men. Perhaps most startling, 25% of women feel their gender has hindered their progress, a perception that grows more acute once women reach senior levels.
Labor Day has been around in the U.S. for more than 100 years. So, too, has wage inequality.
Millions of American workers for more than a century have welcomed the beginning of September – and the three-day weekend accompanying it – with open arms, ironically enjoying a day off on a holiday known as Labor Day.
But not everyone is celebrating. A recent Bloomberg BNA poll found that 41 percent of employers will require at least some of their workers to punch in on Labor Day. About 80 percent of firms with at least 1,000 employees will require some of their staffers to work, while only 29 percent of smaller companies said the same.
It’s understandable that not all employee vacation plans in the U.S. are created equal. But as America prepares to celebrate a holiday dedicated to the diverse body of workers that help drive the country’s economy forward, it’s worth taking a step back to look over the labor market’s deeply uneven landscape that extends far beyond workers’ vacation schedules.
Worker pay, for example, is up all over the U.S. Average hourly earnings for private, non-farm workers in August increased 2.2 percent year over year, according to the Bureau of Labor Statistics. But that doesn’t mean everybody’s 2.2 percent better off now than they were in August 2014.
Updated Sept. 4, 2015 1:14 p.m. ET
WASHINGTON—U.S. employment growth slowed in August but the jobless rate fell to the lowest level since 2008, a mixed labor-market reading that leaves the Federal Reserve with a challenging decision on whether to raise short-term rates at its September meeting.
Nonfarm payrolls rose a seasonally adjusted 173,000 in August, the Labor Department said Friday. Revisions showed employers added 44,000 new jobs in June and July than previously estimated.
However, the unemployment rate, which comes from a separate survey of U.S. households, fell to 5.1%, from 5.3% the previous month. The unemployment rate is now lower than at any point since 2008 and right in the middle of the Fed’s long-run projections.
The decline in the unemployment rate strengthens the case for an interest rate increase at the Fed’s Sept. 16-17 meeting. It suggests that slack in the economy is getting eaten up rapidly, which is central to the Fed’s view that inflation will eventually start rising toward its 2% objective after running below the goal for more than three years.
Richmond Fed President Jeffrey Lacker, in a Friday morning speech, called the payrolls gain a strong number. “I’d call this a good, right down the middle of the fairway” jobs report, said Mr. Lacker, a vocal proponent of raising interest rates.
Fed officials have said they will take Friday’s unemployment report into account as they weigh whether to raise interest rates. The August report is the last major indication they will get of the health of the labor market before this month’s meeting.
Economists once thought the Fed was poised to act in September, but recent turmoil in global financial markets has muddied the outlook. And Friday’s report could serve as ammunition both for those Fed officials who want to raise interest rates in September and for those who would prefer holding off.
Although the number of new jobs fell below the 218,000 monthly average recorded between January and July, the unemployment rate is now below the 5.2% to 5.3% range where officials thought it would be by year-end. Moreover, its descent shows little sign of slowing down. It has fallen by one percentage point from a year earlier. In their June projections, Fed officials projected the jobless rate wouldn’t fall much more in the next two years. For example, they projected it would be between 4.9% and 5.1% by the end of 2016 and the end of 2017. It is already effectively there. Broader measures of unemployment which include part-time and discouraged workers also continue to fall.
As the jobless rate falls, faint glimmers of firming in wages might be appearing. Average hourly earnings of private-sector workers rose by 8 cents to $25.09 last month, a 2.2% increase from a year earlier. The gain suggests a mild acceleration in worker’s pay. Wages had been advancing at a modest 2% pace since 2010.
In northern Mexico, farm workers who pick produce bound for US supermarkets earn as little as $7 a day. They follow the harvest, traveling between the states of Sinaloa and Baja California as internal migrants in their own country. With daycare not an option, children join their parents on the job, sometimes working in 100-degree heat.
In this extra scene, farm workers receive their daily wage. For a 52-year-old laborer working six hours a day, her salary is $7.50 — plus a marshmallow.
Read: Mexican Laborers Want Americans to Know Who Picks Their Fruits and Vegetables – http://bit.ly/1hsteFf
Watch: The Way Americans Eat – The Business of Life (Episode 8) – http://bit.ly/1MW5K6Q