From what I heard most other countries don't hold this custom. How did this start? Also, why is fact that waiters will get tips a good enough reason to pay them below minimum wage?
From what I heard most other countries don't hold this custom.
Please do not base your assumption about the world on Reddit debates. They make it seem like basically only the US and Western Europe exists. I don't know why.
This infographic, although cannot verfy the whole of it, relates to my own travel experiences.
http://www.reddit.com/r/MapPorn/comments/1kg9v0/tippinggratuity_practices_worldwide/
For exampe here in Hungary when there is table service 10% tips are very much expected if the waiter is polite. Denying it is seen as a punishment for impoliteness. At a bar counter tipping is not customary. I guess this qualifies as "limited circumstances". Waiters get the minimum wage though, but part of the picture is that waiting is not an unskilled job but they have trade school degrees so they should get more than the minimum wage which is meant for the unskilled, so minimum wge + tips make a salary equal to other skilled, trade school educated people.
Note: don't demand sources, it is not an answer but a correction of a misconception in the question.