There's actually no incentive to keep low paid service jobs for any length of time. One of the saddest things in retail for example is the longer you work, the less you actually make; retail pay is so low that your raises will be less than inflation adjusted minimum wage or new hires if you work at a job long enough!
I've seen/had this happen. Bosses had to go to bat for their long term workers because even with raises, they wound up making less than people hired in the past month.
I don't think it fixes i would say, but more likely people wouldn't waitress for very long then, just like they don't stay at stores or other service positions for every long. Part of the reason tips work is that those restaurants wouldn't pay close to what the servers make otherwise. They'd end up giving them $10 an hour with a 25 cent or 35 cent raise every year.
It's really low. I've worked in a place where people will literally throw away money equalling an hours worth of the wages of a service person into a pool of water for good luck.
Here's what I think the likely outcome would be. High end restaurants that pride themselves on good service would increase their pay to keep good staff. At the very bottom end waitstaff would no longer have to tolerate the worst of their customers behaviour just to scrape by on tips. In the middle you'll see the increased turn over that you predicted.
Do you tip other service positions like the employee that helps you at best buy or the cashier at the grocery store? Why are they different? If people staying in one job longer is a good thing and tipping helps that why wouldn't you?
I've seen/had this happen. Bosses had to go to bat for their long term workers because even with raises, they wound up making less than people hired in the past month.