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?
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.