Um what? I wish people who never worked in restaurant industry did not get to comment on these threads. Its so infuriating each time.
You know when you leave a tip for a server on a credit card? You know how that tip gets rung in through a Point of Sale machine? You know that when a server now gets their pay stub at the end of the week they get taxed on that tipped income? Oh no.. You don't know any of this? Sounds about right. And every place I've ever worked at has cash tips declared as well. This is because the employer would also get in a world of trouble if they were non-compliant in reporting all income for their employees and paying their employer portion of those taxes. I've worked in several restaurants as a server, and now also on the corporate finance side for major restaurant groups
So in simple terms, yes we could move to have employers pay the staff a higher wage and eliminate tipping, but guess who will still be paying that wage? Did you guess the customer? Well then bravo! Because any restaurant that tries that in the US, also raises their price by about 20%. And then guess what, the government collects sales tax on that because its now sales instead of a gratuity. So you get to pay an extra tax on that 20%, so now we've made the government happy for sure.
Other downsides of eliminating tipping and paying a set wage would be that it reduces the incentive for servers to upsell. Now you may hate when servers upsell you, but it is how good servers make more money by being good at their jobs. Since after all, being a server at many places is a sales job, it makes sense they earn what is basically a commission.
There are definitely other caveats here and there as well. For example, employers DO have to make up their wages if their tip credit wages + their tips do not equal minimum wage. So for example, in NY, minimum wage is $15/hr and tipped employees are $10/hr. So if an employee works 30 hours, and makes $300 from employer and only $50 in tips. They would fall short of the $450 for the week for min wage and employer would have to pay them the $100. So if you can convince everyone at once to stop tipping servers, it would result in employers paying their staff more. But, that would still be a massive pay cut for the employee, and the restaurant would likely go out of business since most restaurants lose money already, and paying a higher wage to their staff without increasing menu prices would drive them out of business.
So, as much as there are SOME people who like to just say "TIPPING IS STUPID! LETS STOP TIPPING AND TAKE IT TO THE MAN!!!", that really makes no sense and shows a very uneducated opinion on the topic that is just loosely hiding the true reasoning of being cheap.