Do not feel bad about tipping, the minimum wage here is about us$1 an hour. Trust me, those tips help to make a major difference in people's lives. I am just posting this so that people dont confuse a service charge with a tip. For a business, the service charge could be "buried" into the price of the items, raising the cost of the item by 10%. They could then increase wages, but that is tricky because when times are slow, the business would still be paying higher wages based on income not coming in.
The service charge is an actual line item on their business accounting and many businesses choose to use it as a way to "share the wealth" when times are busy. It acts as a bonus on their pay checks for every hourly employee when times are good.