The Student Loan Follies, No Tipping Allowed & Other Stories You Need to Know

HIGHER (COST) EDUCATION — Student loan debt reform is a hot topic again in Washington. President Obama signed an executive order Monday that will allow millions more students cap their payments at 10% of income. That is almost certain to happen, albeit no sooner than 2015. On the other hand, a bill to be introduced this week by Sen. Elizabeth Warren which would allow students to refinance at lower rates with funds obtained by taxing the wealthy appears destined to be going nowhere. During Senate debate, Lamar Alexander, the top Republican on the Education Committee, called Warren's bill a "'partisan, political stunt' that has 'no chance whatsoever' of passing," according to The Boston Globe. Even if it did, there is the little matter of the House of Representatives, where taxing anyone (you'll pardon the expression) is a capital crime. Still, Warren ploughs on, even if the point is making a point and not law:

Whatever the law’s fate, it is being used by Democrats as part of a midterm election package of populist proposals known as the “Fair Shot” agenda, designed to draw contrasts between the two party’s views on checkbook issues such as the minimum wage and equal pay.

“It’s a basic question on our values,” Warren said in an interview. “Does this country protect millionaires’ and billionaires’ tax loopholes? Or does it try to help young people who are just starting their economic lives?”

Lamar also said: "College graduates don’t need a $1-a-day subsidy to help pay a $27,000 loan. They need a good job." Maybe what they really need is tuition reform. As the Daily Beast notes, the cost of a college education outpaces inflation, and the average student leaves college $33,000 in debt. When you get rid of weeds, you go for the root, right?

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MARK WOOS MARCUS — David Marcus announced he was leaving PayPal after three years to join Facebook as head of its messaging unit. As he wrote in a LinkedIn Influencer post:

While I was in the middle of my thought process about what was next for me, Mark Zuckerberg and I got together. Mark shared a compelling vision about Mobile Messaging. At first, I didn’t know whether another big company gig was a good thing for me, but Mark’s enthusiasm, and the unparalleled reach and consumer engagement of the Facebook platform ultimately won me over. So… yes. I’m excited to go to Facebook to lead Messaging Products. And I’m looking forward to getting my hands dirty again attempting to build something new and meaningful at scale.

Kara Swisher at <re/code> sees this "very big Silicon Valley poach" as a clear sign Facebook intends to monetize messaging sooner than later, even though Marcus's brief does not (yet?) include WhatsApp, which will continue to operate independently.

There has been speculation, for example, that users would eventually be able to attach digital cash to Facebook messages. But the company could use its popular messaging product in a number of different ways.

The social network said it now processes 12 billion messages on its Facebook Messenger daily. It has 200 million monthly active users of its app, which can be used separately from the network, but is also deeply integrated within it.

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YOUR TIP SO FAR — The $15 minimum wage movement is being driven by fast-food workers who say they can't make it on the current federal minimum wage of $7.25. But McDonald's employees aren't the lowest paid workers in the food service business. That would be restaurant servers who — by law — don't have to be paid even the minimum wage because they can earn tips. In theory, tipping is way of ensuring good service — one apocryphal story holds that the word "tip" was originally an acronym for "to insure promptness." One of our favorite New Yorker cartoons is of a restaurant diner with a placard on his table that reads "Your tip so far" next to a plate with some small change. But tipping is an imperfect system. Not every diner knows how (or wants) to play along, so good service goes unrewarded by cheapskates. Kentucky restaurateur Bob Conway says that the tipping is worst in the casual dining niche. So he's introducing a radical policy: No tipping. Instead, servers earn $10 an hour or 20% of their sales, whichever is higher. "I've heard the horror stories – $3 left on a $100 tab," Conway tells cincinnati.com. "How much a server makes has nothing to do with how hard they work. Servers had quit because they couldn't make ends meet." "No tipping" signs bedeck the restaurant, and there is no "tip" line on credit card slips. Customers are still paying the freight, of course, because Conway is raising prices slightly — so an order of meatballs is $3.00 instead of $2.40. But as merchants from iTunes to Über have learned, if you eliminate an moment when someone has to part company with cash, the cash flows more freely.

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LET MY PEOPLE GO — Non-compete amendments (NCA) have become a pretty standard component of leaving a company if you've achieved a certain level of employment. The idea is fairly simple: Your soon-to-be former employer doesn't want you taking all that awesome talent and secret stuff you know across the street. This is good for a business, and maybe even for business. But it is a major impediment to innovation, argues Alex Tabarrok at MarginalRevolution. And at Ground Zero for innovation, cross-pollination is considered so vital to innovation that entrepreneurs still flock to Silicon Valley even though it's illegal in California to enforce NCAs:

Firms who come to Silicon Valley know that they cannot use NCA to protect their innovations but they come anyway because the opportunity to learn from other people exceeds the costs of other people learning from you. Thus, worker mobility and the inability to protect IP by restricting mobility is bad for an individual firm but good for the industry as a whole, good for innovation, good for workers and good for consumers.

For a great history lesson on how Silicon Valley was born — and how the free movement of smart people made it happen, read the full piece.

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NO-POINTER — If it's Tuesday, Donald Sterling must be suing the NBA. Just when you thought it was all over (and, frankly, it probably still is ...) the discredited owner of the Los Angeles Clippers says he doesn't want to be disenfranchised after all.

"I have decided that I must fight to protect my rights," Sterling said Monday in a letter circulated widely among those involved in the sale and obtained by ESPN.com. "While my position may not be popular, I believe that my rights to privacy and the preservation of my rights to due process should not be trampled."

Last week, Sterling seemed to acquiesce to the sale of the team, to former Microsoft CEO Steve Ballmer, in a deal brokered by his estranged wife, Shelley. In a quote ESPN didn't say didn't come from Shelley, someone the site called "one source close to the situation" said this: "Nobody doubts this thing will go through in the end. I guess it's just a matter of what mood Donald wakes up in tomorrow."

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Would refinancing your student loans be a big deal for you? Would you feel awkward — or cheated — in a restaurant where tipping was forbidden? Is there anything left to say about Donald Sterling? Comment below or write your own post. Share the URL here in the comments mentioning me or Tweet @LinkedInPulse. (Want to write, but don't yet have accessLeave your info here.)