Is Tipping Over? (And other tidbits about California)

by Jack

As many of us [well informed] voters know, California is increasing the minimum wage to $15 an hour over the next six years, boosting the future paychecks of millions of the state’s workers. Some areas will see even higher minimum wages. But, wasn’t this “livable wage” this was the very reason that the UK and many other European countries stopped tipping? As a matter of fact, yes it was. The Brits reasoning was simply and quite logical, the wait staff are making a livable wage and we’re paying for it by way of increased food prices. So, why should we pay them twice?

All staff in the UK, must by law, be paid at least the National Minimum Wage £6.70 21 + years of age ( lower rate applies to those under 21 years of age). National Living wage £7.20/hr 25+ years of age. UK Living wage £8.25. London Living Wage £9.40. (As April 2016). An employer is not allowed to use tips to top up wages to the legal minimum. Therefore, like most European countries, the need and culture for tipping has lessened.

If one is inclined to tip, typically it is not more than 7% of the tab. If you are taking a cab in London, you might round up the fare price, but that’s about as far as it goes.
Will Californian’s adopt the no tip policy? Probably not right away, but common sense says the tipping is likely to start slowing down by the time minimum wage hits $15 and hour.

In a related story, California has over spent once again. We are now looking at another deficit. According to a recent article in FORBES, “California’s finances are only in order if one ignores the trillion-dollar gorilla in the room, which is the state’s gigantic unfunded pension liability for which taxpayers are on the hook.

According to figures released in 2014 by then-California controller, now State Treasurer, John Chiang, California’s unfunded public pension liabilities rose from $6.3 billion in 2003 to $241 billion in 2014. Yet that $241 billion figure, which represents 3,000% increase over a decade, doesn’t tell the whole story, as it assumes an optimistic nearly 8% return on pension investments. Economists and public finance experts point out that more realistic assumptions about rates of return put the state’s unfunded pension liabilities at nearly $1 trillion, or eight times the current general fund. That’s just the state’s unfunded pension liability. Unfunded retiree health benefits are another daunting challenge for California.”

To make matters worse, California is losing tax revenue. Hang on to your chair for this news flash, it seems nobody wants to move to California because of our high taxes and bureaucracy! (And you liberals thought it would attract business, right?) Yes Bunky, as we (liberals in Sacramento) have been steadily increasing taxes on everything from city sales taxes right up the line, that has had a negative impact on tax revenue. It seems that the people who actually produce good paying jobs and pay high taxes are leaving the state in droves!

Again, according to FORBES, “…a major impediment to economic growth and a factor chasing people and businesses away from California is the state’s high tax rates and poorly structured tax code. California levies the highest top marginal income tax rate in the nation at 13.3% and has the country’s 6th highest overall tax burden. Such a hostile tax climate has consequences. During the last decade, from 2000 to 2010, California had a net outmigration of over 1.2 million residents move to other states. Those former Californians took over $29 billion in income with them.”

$29 billion? That amount sounds familiar… oh, wait that was the amount of the State’s deficit that we just finished paying down with more taxes and more state bond measures.

On the bright side, our state democrats are adding to their numbers daily, as more poor folks head to California to take advantage of our rather lavish safety nets and welfare benefits.