Comments on: Labor Costs and Service Prices in the US economy: hidden flexibility? http://www.axelschmiegelow.com/2009/02/10/the-hidden-flexibility-of-labor-costs-and-service-prices-in-the-us-economy/ No day without thrill and challenge! Fri, 25 Feb 2011 22:15:14 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Axel Schmiegelow http://www.axelschmiegelow.com/2009/02/10/the-hidden-flexibility-of-labor-costs-and-service-prices-in-the-us-economy/comment-page-1/#comment-10865 Axel Schmiegelow Sat, 14 Feb 2009 15:52:30 +0000 http://www.axelschmiegelow.com/?p=136#comment-10865 Hi Dwight, I entirely agree that it is very debatable whether this is a desirable system. I'm not sure service is generally worse in US cities, though. Hi Dwight, I entirely agree that it is very debatable whether this is a desirable system. I’m not sure service is generally worse in US cities, though.

]]> By: Dwight http://www.axelschmiegelow.com/2009/02/10/the-hidden-flexibility-of-labor-costs-and-service-prices-in-the-us-economy/comment-page-1/#comment-10574 Dwight Tue, 10 Feb 2009 10:02:42 +0000 http://www.axelschmiegelow.com/?p=136#comment-10574 Axel, this is very true and hadn't occurred to me in this way before. I think I have always looked at the US tipping custom from a very European point of view, asking myself why companies don't just increase the price by 10-20% and be done with it. I guess you might have provided the answer. I am, however, unsure if this is a desirable system or not. Transferring the economic risk (at least in part) to the employee is common practice and often takes the form of commissions or bonuses. In the case of the service sector, however, peoples lives become economically non-viable when tips dry up. Also, most Europeans will agree that the service in large US cities is worse than in most European capitals, with the exception perhaps of Paris. Is this despite or because of the tipping dependency in the US? Dwight Axel, this is very true and hadn’t occurred to me in this way before. I think I have always looked at the US tipping custom from a very European point of view, asking myself why companies don’t just increase the price by 10-20% and be done with it. I guess you might have provided the answer.

I am, however, unsure if this is a desirable system or not. Transferring the economic risk (at least in part) to the employee is common practice and often takes the form of commissions or bonuses. In the case of the service sector, however, peoples lives become economically non-viable when tips dry up. Also, most Europeans will agree that the service in large US cities is worse than in most European capitals, with the exception perhaps of Paris. Is this despite or because of the tipping dependency in the US?

Dwight

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