Restaurant Industry Contraction

A little-recognized benefit of being a waiter is that the job has a sort of built-in protection from inflation.

In a nutshell, when overall prices rise so too do restaurant prices. Tips are more than not calculated on the ‘bottom total’ of the check (the figure that includes food and drink, plus taxes). If a waiter was generally getting $20 tip on a $100 two-top, then when prices rise to $115 for a two-top, he’ll be getting $23 tip. It’s easy to see. Likewise the tax effect. California recently jacked sales tax up an additional 1%. Of course that is reflected in the new bottom total of every restaurant’s checks. So in a way, that’s another raise for us.

Obviously, this is not a cut-and-dried mathematical equation. People are free to tip whatever they want. If things become more expensive they just might take the extra out of the tip, so the previous example of $100 + $20 tip = $120 final outlay, might actually become $115 + $15 tip = $130 final outlay. Consumer’s costs rise less, waiter eats most of it. C’est la vie.

That said, I believe tipping on the bottom total continues to be the most common formula.

In the face of inflation, this makes waiting tables an extremely attractive lower-middle class profession. Most jobs don’t have automatic cost of living adjustments. If you’re an office manager and prices rise 5% in one year but your pay raise schedule only gives you 2.5% annually, you’re either out of luck or else you have to screw up the courage to ask your boss for an additional raise you probably won’t get. For us waiters, it’s just automatic.

Twenty years ago at my first actually good serving job, I was making $70-100 a night. Aside from the incremental increases in minimum wage, I never asked for, nor received, a raise. It just happens as you go along. I wouldn’t say my current night job is any more high end than that job 20 years ago, but now I make $150-200 a shift. When the economy is good, I make $200+.

Now that I’ve explained my take on inflation as it affects the waiter, let me point out another pay benefit people don’t often recognize. Waiters also get automatic (effective) pay raises when the economy contracts (as opposed to an inflationary economy). This is what we’re going through now.

Restaurants close. If you’re lucky enough to still have a job, that means there are fewer competitors taking your money.

Fewer people go out to eat. Restaurants will almost immediately adjust staffing so fewer servers are on the floor. Again, if you’re lucky enough to be in good standing in your job, that means fewer fellow waiters taking a bit of the aggregate tip pool. I hope it’s obvious I don’t mean, necessarily, actual Tip Pooling. Simply, if a restaurant rings $2000 in a night, that would mean $400 in aggregate tips. If there are four waiters on the floor, everyone makes $100; if only two, each makes $200. All things averaging over time, of course.

This is what’s happened at both my jobs. If done properly, contraction takes a while to kick in for you. The immediate effect is usually getting fewer shifts. If done properly, the management will let water seek its own level: As servers leave, they are not replaced; as servers take additional jobs to compensate, they end up stuck with three shifts instead of five permanently because they’re working elsewhere, which leaves those remaining able to nickel-and-dime pickup shifts to get back as close as possible to their usual full schedule.

Here’s how things have contracted at my day and night jobs:

Three years ago at Michael’s I was working 4-5 lunch shifts a week. The floor was routinely staffed with a minimum of four waiters, more if there was a lot of business. Today, the template is 2 shifts a week plus an on-call that’s about 50-50. The floor is staffed with two waiters as default, the third is called in about half the time. So currently I have fewer shifts each week, but at the same time, the smaller floor plan has propped up my daily take to a slightly better average than I used to make. With time (and assuming we remain open for lunch) I hope to get back to 4 shifts a week, as staff attrition has its effect.

Three years ago at Carney’s I was working three shifts a week. Today I still have three shifts, but there is one fewer waiter scheduled each night. And again, my daily take home is about the same as it used to be. I don’t expect to be able to add a shift at Carney’s, but I do expect to make significantly more money as the economy comes back.

It is a hard time. Yes there are significant negatives to a career in food serving (lack of benefits, wear and tear on your body, poor job security, etc.); it is not an ideal profession by any means. But, as detailed above, there are some overlooked positives that make it better than a lot of working-class jobs.

How would you like to be an auto mechanic right now? These 3000 closed dealerships all have a staff of mechanics. I’m sure business was down already. Now it’s totally gone.