Whether or not it is accounted for via tips or via a paycheck is irrelevant though, isn’t? The employer paying the employee a wage is merely, from the perspective of the employee, a pass-through entity between the customer and themselves.
Assuming we were to just get rid of the distinction and raise the base wage of everyone to minimum wage, $7.25, employers would just raise the cost to cover the increase in their marginal cost. So prices would go up, and so long as they stayed relatively below what customers would have tipped, it’s all good; however, chances are, they would also do other things, like cut back on hours or hire new staff.
In general, I don’t think tipping is actually an effective measuring stick, because we have been conditioned to essentially always pay at least 20%. So maybe, if the price of all goods went up just by 20% no problem. However, it would have a spill over effect on which shifts people opt for, because if you are going to make the same regardless of which shift you work, then clearly it changes the prioritizes for high demand shifts, which might bring in more, and less busy shifts.