1. Most waiters don't get health benefits 2. Most waiters don't get retirement plans 3. Most waiters are at the whim of the restaurant managers 4. There's only so many tables you can turn in a shift, and tips average under 20%. 5. Most waiters don't get any PTO
Say you have a four-top that has meal service of $120 (booze tips usually go to cocktail waitresses, wine goes to waiter). An average section for a "good" steakhouse will have no more than 5 tables per waiter; otherwise service sucks.
So each table earns the waiter $24 in tips. With 5 tables, that's $120 per turn. High end steakhouses don't turn fast; again, the appeal is having a long, hearty meal. So maybe 2.5 turns on a good night. That would be $300 in tips. But then you have to tip out. Busboy gets $25 (helps you turn faster, helps with some service), dishwasher gets $10 (should get $100), hostess gets $20 (so your section gets sat promptly), and at least $50 for the line cooks who are the real stars. Now you're done to $195. That needs to be reported as income, so it gets held back by mgmt for tax.
You get 3 good shifts a week, and 2 crap shifts. After a week you've made $195x3 plus $125x2 for a grand total (pretax) of $835/week. So your gross is $44K. I'm ignoring the base hourly wage because it's usually nothing.
$44k isn't bad money. It's above the nationwide median, but considering all the downsides, it's not "a good living." If you get sick, tough shit you lose out. If the chef jacks up the menu, you lose out. And it's a young person's gig. People want their waiters to be young and attractive, not balding and showing grey hairs.
I've heard of bartenders making more than $100k/yr, (but still with no benefits).
Maybe my view is skewed from seeing prices in expensive cities, but I think the beef alone at a good steakhouse is gonna run you more like $75-$100 per person, and that's not even for the high-end wagyu (which will probably run $150-$250 for most cuts). Then add another $10-$30 per person for appetizers and side dishes, and maybe dessert on top of that.
I feel like it's pretty hard to walk away from a good steakhouse spending less than $80 or so, even if you have nothing to drink. And the more common case is probably quite a bit more than that...
I think well educated professionals sometime miss what reality is for millions of people. $44k for a few shifts is better and more reliable income than a retail gig. The similar premium gig for a low skill person is probably a janitor.
In reality, half of the US population lives in a state with a regular minimum wage for waiters (California, New York, Washington, and a bunch of other states), and the other half averages $5/hr which is $7800/yr if you work 30 hours a week. Also there's cash tips that aren't reported on taxes. And like others have said, you're estimating $30/person at a steakhouse which is TGI Fridays prices.
Put that together, and you're looking at the equivalent of six figures pre-tax for 5 nights of work, with no email at night or on-call. Sounds pretty good to me.
In my area some waitstaff also make $3.50/hr because the company assumes they make tips. Some also hold all your credit card tips and give them to you on the paycheck...so it isn't all roses.
"My understanding this year is that popular restaurants require reservations 60+ days in advance." >> This is what a shortage looks like. Long lines and empty shelves. People who are willing to pay the advertised price, but can't because there isn't anything to buy.
"started reducing hours due to labor shortages." >> Meaning that there is more demand for labor than supply at the current price (wage). The supply curve for labor moved down, causing a shortage of labor at the current price. That's a 'shortage' as perceived by businesses that don't want to pay the actual market clearing price/wage.
In your example, a labor shortage is leading to a restaurant shortage. In both cases caused by changes in the supply and/or demand curves (down and/or right, respectively).
You could also go farther upstream to the housing market and say that because the supply curve of housing moved down, house prices went up, and that caused labor's supply curve to move down accordingly.
All of these things ultimately mean fewer things and less stuff, at higher prices.
We have similar issues up in Charleston, with my girlfriend ‘s restaurant in an HCoL (Mt. Pleasant) really struggling to find staff beyond the 16-26 “living with mom & dad” crowd where HCoL is little of a factor.
I would add I have at least a half-dozen friends in BoH that intentionally (an)used our state pay benefits for a free vacation to smoke weed and play X-Box though sadly citing it as their first vacation in a forever. There’s definitely a problem a multi-faceted problem here.
Hilton Head is a popular vacation destination, but as development started radiating inland towards I95, all of the workers are priced out. The housekeeper at the hotel I stayed at in 2019 commuted 2.5 hours daily, and restaurants started reducing hours due to labor shortages. COVID made it worse, but the problem existed because you can’t work in most places without covering the cost of operating a car.
My understanding this year is that popular restaurants require reservations 60+ days in advance.
There may be some demand shifts at the low end from sit down to fast casual, but those are the places where tipped workers are paid the least. A waiter at a good steakhouse is making a good living, an IHOP waiter makes $10/hr or less.
At the low end, I think those workers have shifted to curbside retail. I’d guess the average Target has 12-30 more staff to handle curbside orders alone.