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How Much Should Restaurant Workers Be Paid?

Pay for restaurant workers. It’s an issue that manages to unite us and divide us at the same time.

According to the National Restaurant Association, half of all American adults have worked in the restaurant industry at some point during their lives, and a third got their first job in a restaurant.

Most of us, in other words, can sympathize with the plight of low-paid restaurant workers because we’ve been there ourselves at some point, or have a friend or relative who struggles to cover basic needs while working full-time in a food-service position.

Divisions emerge when we stop to consider what, if anything, to do about it. Should we raise the minimum wage? Should we abolish tipping altogether? Should we pressure owners to pay their employees a living wage? Or should we let “the market” sort itself out and avoid potentially messy policy intervention?

Traditionally, many restaurateurs at our country’s 980,000 food-service establishments argue that forcing proprietors to pay their workers more will simply result in either less hiring or worse: layoffs. Further, they say that paying workers more would result in higher prices for patrons, who might decide to stay home and cook.

The counter-argument, one that I agree with, is that modestly raising pay standards to keep pace with inflation and other cost of living metrics is not only the right thing to do from an ethical standpoint, but will have the added benefit of stimulating more economic activity overall, because compensation isn’t’t a zero-sum game.

After all, folks who work in restaurants like to eat out as much as everyone else! If they’re paid a decent wage, they’ll have the means to patronize local restaurants once in a while.

What’s more, there’s the issue of fairness. Consider the situation in New York City, where nearly two-thirds of restaurant servers live at or below the poverty line. How is this situation OK? This strikes me as a classic example of a market failure ripe for correction.

In the meantime, whether you support change or the status quo, we as patrons can make sure our servers are tipped well, because tips aren’t simply bonuses paid on top of good wages. Without tips—heck, even with them—the far majority of restaurant workers wouldn’t be able to make ends meet.

And if you’re not convinced that your tip makes a difference, check out this powerful video.

About Jeb Foster

With a passion for content, Jeb is Tundra’s email guru and works to deliver a perfect mixture of content and deals in our emails to keep even the finickiest subscriber overwhelmed with email happiness. When he’s not at Tundra, he likes to spend his time playing air guitar and remembering the good old days of snail mail.

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  1. Greetings from Finland!

    I am working on a restaurant and studying restaurant management at university of applied sciences. In Finland we have a very good situation at restaurant business when compared to many other countries. Still we are also talking about how much more should restaurant staff be paid.

    Here the union makes sure that salaries keep up with inflation. I myself do belive that it is important that the whole nation can make and also spend money so we can get enough taxes to take care of health care, infrastructure and other things.

    We have also talked a lot about tipping culture. Most of the people don’t leave tip at restaurants. That is chancing and now the talk is about should people pay taxes from the tips. Since the salary is okay, customers who leave tip leave it only if they think service is very good. Some people think that if salaries were lower and people would have to work more to get more tips, service would improve. I belive that lowering salaries is not an answer. Good customer service comes when people enjoy their work and belive that they are paid enough. Good service brings customers back and good manager notices that.

  2. Hello Milla!

    Thanks for the comment. I think we’re in 100% agreement about wages for restaurant workers! If only the U.S. had the same approach as Finland. (I’ve heard there’s a lot we can learn from your education system as well!)

    The minimum wage issue is fraught with complexity here in the U.S. As it happens, the Congressional Budget Office, a non-partisan federal agency, recently estimated that raising the minimum wage would lift nearly a million people out of poverty. However, they also estimated that roughly 500,000 jobs would be lost in the process …

    So the question is, is that worthwhile trade-off? I am inclined to think it is, provided there are steps taken to help the newly unemployed find jobs.

    • Overpaying people because the government mandates it is not what the US is about. The minimum wage is antiquated even; youth unemployment is high because paying people with no skills anything is just money out the window. Unpaid internships, a valuable way to gain skills, have been abolished in many places. You gain skills by working at a low wage, while living with your parents or a bunch of friends, and then you make more when you become productive. Most people don’t want to live with their parents of friends forever.

      The point of low wages is that they provide incentive for people to gain skills so they can make more money. When you incentivize people to lug plates to tables for “a living wage” they you lock them into “near poverty” for their entire lives.

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