It goes unnoticed by the customer, you see, because the customer is paying the waiter the wages that keeps the waiter happy and the customer is desensitized because the custom has been conditioned into the culture through implication of necessity and presumption of decorum. The customer doesn't care about the formulas. The customer cares only about the overall price paid and value received. If a customer is really getting screwed, he/she will go to a place that offers better value. Simple as that.
You apparently are proceeding from the asusmption that there is some overall "just" or "fair" price. No such thing exists. The correct price is what customers are willing to pay in a competitive market, which the restaurant business certainly is.
You think the customer would be better off if there was no tipping, and the owners were forced to charge higher baseline prices to accommodate the standard minimum wage and to attract staff?
The customer doesn't care about formulas in the same way he doesn't care about corrupt political dealings, and has about as much power to affect outcomes as an isolated individual.
And it certainly is a maxim that you charge what the market will bear.
But there is an internal problem with approaching it with the thought, "I'm gonna soak 'em for every penny I can get." The latter is a dark side of capitalism and a basic flaw in people that will coarsen society as it becomes customary.
There may not be a "just" or "fair" price, but there is a moral price.
I don't believe that owners can morally (without some guilt lurking in their hearts) justify raising their prepared food prices because the customers weren't tipping; that part of customer contributed wage they weren't paying was going into their pockets, not keeping the food prices down.
My observations.
