Kempczinski also noted that in many states, sit-down restaurants are allowed to pay servers as little as $2.13 per hour, a federal minimum set in 1991, with tips making up the rest of their pay.
“So right now, there’s an uneven playing field. If you are a restaurant that allows tips or has tips as part of your equation, you’re essentially getting the customer to pay for your labor and you’re getting an extra benefit from no taxes on tips,” Kempczinski said.
I understand you’re point, what I was calling out is that what McDonald’s suggests technically shouldn’t be a new burden on restaurants, but you’re probably right that it would be because how broken tipping is in America.
Also, this approach is actually the opposite of what Walmart did to expand. Walmart used its large size to force better wholesale deals and/or operate at a loss to undercut prices that mom and pop stores couldn’t compete with. Walmart is known for cheaper prices than the competition.
McDonald’s approach is more like regulatory capture. Once youre a big player you try to get more burdensome laws passed that make it harder for new competition and/or smaller businesses to thrive. Currently we’re seeing similar things in the online space with things like age verification laws.