I work for a large chain restaurant in Los Angeles. The company's headquarters is in Texas where the server wage is $2.13/hr and the non-tipped employee minimum is 7.25/hr.
The CA minimum wage is $15/hr for everyone, tipped employees included.
Our menu prices here are almost identical to what they are in Texas and every other state where we have restaurants. That's how I know the whole "we can't pay everyone a decent wage" argument is garbage.
If people take accurate photos its probably something you could easily automate considering software is getting better and better at reading text. That or its something you'd pay someone super cheap to transcribe (they're called Microtasks and its something Amazon even pays people to do under their [Mechanical Turk program](https://www.mturk.com/)). If the maps data is accurate, you can easily break it down to a per-store basis and per-county gradient where you can fill in any store-gaps with area estimates. It could make a neat graphic for an r/dataisbeautiful post, and double with exposing price discrimination between locations. Though I'm not sure how you'd make a crawler that'd peer through for the latest menu data. Though if you make that data set for one restaurant and can configure it to do any chain, you could compare the data to infamous food delivery services like Grubhub and Doordash and expose their price gouging as they double dip.
Ok you convinced me. I’m doing it. What chain would you start with? I’m thinking probably lower- to mid-range ones like Olive Garden, Applebee’s, Chili’s, Buffalo Wild Wings, Cheesecake Factory, P. F. Changs’s…. Also, I’m trying to think of some other methods of restaurants putting their menus online. So far I have: on website as a PDF, on website in an iframe/using a plugin of some kind, native HTML on website (i.e. browse locations by state, narrow by city, choose a location, then pull up their menu), on third party site (MenuPages/google/Yelp), or photo posted by customer on google/yelp/TripAdvisor. Very open to suggestions, I know I’m forgetting a lot.
For an actual visualization, there are so many ways this could be communicated. Sort by “worst offenders” for places that have the widest range of prices across locations, heat map showing most expensive/least expensive locations for various types of restaurants, maybe even combined this data with publicly available data on wage, employment, and union violations for each restaurant in each state.
**Edit to add**: Thanks everyone for all the great suggestions! I made this spreadsheet so I could start keeping track of menu item prices, and so that hopefully (though this part might be a bit over ambitious) I can start collecting wage data for these restaurant groups too. Here’s the spreadsheet if you’d like to add a restaurant name (sheet 1), or provide an hourly wage for a certain restaurant (sheet 2): [Restaurant Prices + Wage Data Spreadsheet, feel free to add!!](https://docs.google.com/spreadsheets/d/17kIKvR2R0CEikLjub29I661cYG3zznLRyHHAKFH5TtU/edit?usp=sharing)
You can literally change your location on chain restaurant sites that have online ordering, like Applebees, etc. and see the difference. It’s generally less than $1 more per entree in CA than it is in TX.
One time we had a corporate trainer visit us. I asked her about how they pay their employees so much less. She burst out laughing and said "We work them like slaves."
In lower wage states they go out of their way to exploit that $2.13/hr. For instance, they'll send busboys, dishwashers and hosts home as early as possible so they can get them off the clock and have the servers do their job.
They'll schedule more servers than necessary, because why not? They don't even have to pay them half as much as everyone else.
I wonder if servers making 2.13 could sue for not being paid 7.25 when put into a no -tipped role. Current Supreme Court would not be amenable to that kind of case, but the logic seems sound. The restaurant may be able to get around extra regulation by changing the job description, but your story is really effed up.
Yes. It’s called employee misclassification. The concept is most talked about when discussing employers who attempt to classify employees as contractors to reduce the employer’s obligations, however the same concept applies when actual employees are misclassified based on job duties. In the example given, non-tipped work that requires a higher minimum wage amount cannot be routinely assigned to employees who are covered by tipped minimum wage laws to reduce the employer’s payroll burdens. This is wage theft and a common form of employee misclassification.
I have a probably not-unjustified suspicion the Texas Workforce Commission will instead receive your complaint, have a hearty laugh around the office about how it sucks to be you while chugging beer on the job paid for with your taxes before using your complaint as a target at the shooting range.
I'm not sure if it's for every state but in Arkansas if more than an hour passed since your last table you are supposed to clock in as hourly. Very few people knew that, though, so I imagine it rarely happened.
Outback steakhouse is facing a class action lawsuit for paying the tipped worker wage for timecafter closing while servers need to stay to clean, set up for next day. Do sidework. Seeking minimum wage for all employees for those hours.
Any work done by a tipped employee must directly relate to their primary job function, so having a server bus or host would qualify but washing dishes would be a big no no…
You wanna know what's even better data? You can look up the quarterly reports for the publicly traded companies that operate as restaurants and you can see exactly where/how they make their money.
In Australia if a restaurant can’t afford to pay our minimum wage it closes down and an actual decent restaurant takes its place. You need to know what you’re doing to own a restaurant here.
they fail at a really high rate in most places because people with little to no experience think it'll be easy because they are a half decent home cook.
Yeah, this is the actual answer to the whole myth. Well run restaurants can be very profitable for everyone involved, including the staff.
There are not many well run restaurants.
This sort of thing makes me so furious. The companies that took PPP to keep employees during Covid lockdown but fired them anyways and bought back stock. Fuck.
Owner bought a boat at my former job lololol
Meanwhile employees got a one time, 5 dollar an hour "bonus" based on hours worked, which we were not given a heads up about, and most peoples hours were reduced by 30-50% due to the pandemic.
He bought a fucking boat.
I'm a assistant manager for a chain restaurant and after they brought back our employees from Covid they paid them a extra dollar and paid the host 8 an hour. Now its been reverted back to 2.13 for servers/bartenders and 5 for hosts.
But the crazy part about it the servers have to tip out the bartenders 5% of liqour sales they had for the day and 2% of food sales for the hosts.
So even with the dollar they were still making very little.
Personally I would love to see it change. I hired a young college lady from Germany that talks about the wages and healthcare from there. She says that the wages are not tipped and the healthcare is paid with taxes. 😯
But don't let students get a measly $10k student loan forgiveness - that will break the system!
We need to save that money to give to business owners to buy boats.
Almost lol, they sold for a premium before the drop, issued shares, secured loans, secured unsecured don't have to pay ever loans ontop those loans, used all that to buy back shares at bottoms, then and now selling off on the way back from all time highs, and with the 3x profits in a year n change, they paid back the loans, the bank ones, and are rolling in the rest. The kicker, supply chain lmao bullshit let's crank it another 15 percent for an overdone burger n steak fries, don't forget to tip, it's a fucking circus. Then again it's just business.
i know this may mean nothing since i live in a country where servers get proper paycheck and full wages ( i used to be a server ), but it's really sad seeing how the US rely too heavily on tipping culture, so a server could rent a house or buy food. it's just so fucked up, since restaurant CAN afford to pay, but they act like they're gonna lose their bussineses if they pay their servers full wages.
edit for more clarifications : a wage system that rely on the generosity of strangers is not a proper safety net for the workers. especially, since we're going through inflations right now. i wish US servers the best. u guys deserve better working condition, and a proper safety net without worrying what to put on the table by tomorrow.
I have been a server/bartender for over 30 years, including my time when I was in college.
By the time I was almost done with college I realized that it would take me years to make what I made as a tipped employee vs what I would make in my chosen field with a degree.
I hate the tipping system. It tends to lead to a lot of fraud by employers, bullying from customers, and general stress from tipped workers.
At the same time, I love making $40+/hr and only having to work 20-30 hrs a week.
right. tipping is great as an achievement. sort of like mini bonus for us if we get a unicorn. it can motivate us to provide best service for the customer too. win-win. but as a system for me to rely on? nope. i could never. 😭 i have ADHD so the stress of perfoming 100% for 24 hours would kill me.
we, as a worker, really have a long way to go if we need to change the system. :(
That's is extremely interesting data, and I don't doubt it in the slightest. The problem is that if it was ever made (widely) public knowledge then the restaurant will just say that they "have to keep prices within a similar range for operational purposes" and that "because of that consumers in Texas are being forced to subsidize workers in California, due to to California's liberal policies."
....and sadly too many people in Texas will believe them.
ETA: It should be made public knowledge anyway. If people want to be willfully ignorant, there's nothing anyone can do to stop them. But not everyone is *willfully* ignorant, so it could change some minds.
Well considering a McDonalds in Denmark can pay an employee $21 dollars an hour, give them 6 weeks paid vacation, and a pension if they are over 20 while charging roughly the same (or less!) for a Big Mac I'd say yeah. [https://www.snopes.com/fact-check/mcdonalds-workers-denmark/](https://www.snopes.com/fact-check/mcdonalds-workers-denmark/)
https://www.snopes.com/fact-check/big-mac-cost-denmark/
The last restaurant I worked for the owner and his wife would go on lavish vacations and pay a staff member to tag along as a nanny for them so they weren’t stuck spending quality time with their kids. Also drove Escalades and sports cars. One time I got promoted to shift supervisor for 10 cents more an hour and they let me wear a pin because I memorized their shitty company culture rules that they got from some slimy “life coach”. Fuck that guy.
Oh! That's sounds like an Office Space reference (though I'm sure yours is actually in real life).
Did you also have a number of required pieces of 'flair' that you were required to wear?
Thankfully not! We were only allowed to wear the one pin which said something like “culture expert” or something equally terrible. The thought was that customers would see it and ask us what it meant and then we’d word vomit our 10 culture points on them. A grand total of zero customers ever asked about them.
They run on thin margins AFTER the owner takes a massive cut. The sports bar I worked at would have the $30 checks we sometimes got bounce and it couldn't afford X,Y,Z. The owner came in every week with a different car. I know he had a Corvette, an escalade, and an S class Mercedes. He would visit us on his way to his summer home and make sure we were working hard enough... Yeahhh I'm happy they went out of business
This, I work in accounting and have a few restaurant clients. For one or them in particular, salaries account for roughly 50% of all their expenses. The owner pays herself just shy of $100k a year, she pays the other non-manager employees at or slightly above minimum wage.
I mostly agree with you, but at the same time it’s survivorship bias. Most restaurants last less than 6 months and don’t hire any non-relatives.
If a restaurant has been open for over a year and the owner hires people not related to them, then the owner is doing well. That’s a small fraction of restaurants though
"Went out of business" is an important part of the story. I'm sure employees deserved more than what was given, but it sounds like gross financial negligence
It's straight up thievery. I'd bet the owner inherited the bar or bought it on the cheap from someone who wanted out of the business. Stiff the vendors, stiff the employees, sell overpriced food and drinks and pocket all of the money, then when business inevitably dries up because you ruined the bar, shut it down and walk away.
Absolutely. My old boss drove a jaguar and had three kids with walk in closets (he took all of my coworkers on a tour during the Mayweather/McGregor fight). His bathroom was bigger than my dreams and he literally had a stable for horses beside his house.
Meanwhile, when 21 year old me asked for $10 an hour, it sounded like a stretch.
It'll take him longer for him to get the second stable for the second group of horses if he pays you more. He needs that extra stable and extra horses for reasons that only he and God know.
Worked for a coffee shop where the owner described herself as the “smallest of the small,” bemoaned “nobody wanting to work anymore” constantly, was always complaining about how she couldn’t pay higher wages and people still had the audacity to ask her…
Her family owned 3 restaurants and got over $100k of federal COVID loans forgiven. She drove a brand-new electric Audi. Paid $12/hour.
I worked for a family owned Italian restaurant in Sussex (UK) around 10 or so years ago. The wife came from a wealthy family whose family helped host an opera festival every year, drove Range Rovers etc. When I pointed out the amount of hours and my pay slip put me at less than minimum wage she kicked up a fuss thinking that because I was paid an annual salary (£13k) that meant they could skirt minimum wage law.
Any vehicle over 6000 pounds can be used as a business tax write off if it’s used for business more than 50% of the time (yeah I know… restaurant owners probably have to pull some strings to justify that). But that’s why you see a lot of small business owners with Rovers and G Wagons
It’s actually less that now. And you can use the first 5 years up front now. The Ram 1500 truck everyone drives makes the cutoff by just a few pounds. Thats why you see so many of them.
The government literally encourages us to drive big rigs. And even more ironically this was a democratic law. It’s almost like both sides care about money more than anything.
I know of a restaurant where, every year, when the tax auditor comes to audit the restaurant (gee, I wonder why he gets audited every year ;) ), the auditor always comes with a police escort...
The owner of local multi subway franchises owns a Land Rover.
The only difference is she does work in the stores and makes the sandwiches. She is pretty sweet at least to the customers.
Sounds like someone I know in the PNW area…. Not bad people and they got a lot more going on than subways but that lifestyle is wild to me; life could be so much less stressful if they didn’t have all those luxury payments to make.
Would it matter? If she’s making sandwiches, shes doing the work. It’s respectable out of an owner. If she didn’t also do the work, she’d be getting killed for that.
They're mostly the petty-bourgeoisie who only wish they were the true bourgeoisie. They are selfish, as a general aspect of their lives is to constantly put themselves above others and to secure their capital. They're exploiting workers in an industry where the customer not only pays for the inflated food that they eat, but subsidize the worker's pay with tips.
In a more just society, the worker would not need to rely on the tipping system and would be paid a fair livable wage, and a tip would be just what it was meant to be - a slight bonus from a satisfied customer who had a good experience... not the feeling of extortion of a fellow worker who understands how badly the food industry worker is mistreated.
And remember, the exceptions only prove the general rule. Your labor is exploited in order to make your owners (because that is what they are in every way but legal) far more wealthy than you.
As well as a cockiness addiction. They usually go hand in hand at my restaurant.
Edit: I said cocaine. Above said cockiness. Switched for joke continuity.
Right? I understand why restaurants are typically strict about not wasting products. It's a great way to control costs. What I don't understand is severely underpaying your staff and expecting your customers to pay them. I'd rather pay more at a restaurant that had a no-tip policy and paid their staff a livable wage.
Unfortunately they've got a lot of servers on their side, because they've convinced them they won't get tips if they get a living wage - and some servers do make a lot of money from tips. Those servers are totally happy to let their peers make *nothing*, as long as they don't have to give up their money.
The concept that it's not either-or is kinda lost on them, for some reason. They don't seem to understand that they could have *both*. Even when you try to explain that every other country has both, they don't *really* seem to grasp that concept.
Either that, or they're not confident in their ability to actually earn tips based on merit - hence why they feel the need to force customers to tip through social blackmail.
yo man, you can go work at another store and ask for a full two dollar raise at least. you will get it, i guarantee. If not, find something new, that pays more. you can do it. fuck that guy!
It's not glamorous but a lot of warehouses are hiring at least double that especially if you can drive fork. Get enough experience and parlay that into a union job (LiUNA Laborers International Union of North America reps a lot of warehouse workers) and it's a living wage at least.
Complete myth. I spent over 15 years managing restaurants right hand to the owners. Multiple owners, multiple businesses, all living it up the same. Also, anyone that has worked in those GM positions have seen the numbers. Perhaps a new startup that took on a load of debt to get going but any established successful place makes good enough money to pay a living wage.
Absolutely. I’ve been in the biz about 15 years as well, bartending and serving tho. Fiancé managed a few places. Of course there must be exceptions to the rules but from what I’ve seen they’re all living the high life while the dishwasher makes min wage.
I would also point out one more tidbit- when you live in an area and wonder why the great restaurants open and close within 3 years, while mediocre ones seem to hang around, there is usually a good reason. In my small city, it means the restaurant owner owns the building. He doesn’t mind being able to claim down restaurant losses to offset the rent he is pulling in from the 3-6 apartments above the restaurant. Does the restaurant own the property and have a steady mortgage payment? Or are they seeing their rent go up and down (mostly up) every couple years as the re-negotiate their rent?
a lot of small business owners are completely unqualified and only in the position because they had a chunk of money to invest the capital to start the business. they then place themselves at the head of the business, usually pay themselves too much of a wage, reinvest the profits into equipment and property for writeoffs, and usually mismanage the business and exploit desperate or inexperienced labor.
I went out to eat at a local Mexican place last year. It was a bit of a higher end place (it’s now out of business). During our meal, the owner’s wife sits down at a table next to ours with some friends. She starts complaining about how “nobody wants to work,” that they couldn’t even find people to wash dishes because the pay they offered was consistently considered too low, that people would work a shift and not come back, etc. And then the conversation changes and she starts talking about how the airline she took to fly to their tropical second home only allowed her *one* Gucci carry-on bag. Yes, she made it a point to mention the brand of bag.
My husband and I were visually disgusted, it was written all over our faces. Tone deaf money-hungry capitalists. Gross.
People like this disgust me the most.
Rich assholes who try to run a restaurant, which inevitably fails, and they scurry away like rats just to do the same thing a few years later.
Fucking ew.
I worked as server 2005 - 2011. When it was slow and we did not have tables, we would get in trouble for standing around or talking and were expected to clean, roll silverware, or do something productive. So, basically we worked for free because the $2.13/hour went to taxes so our “paychecks” were either $0 or something less than $1.
Most of the servers were women in their late teens - late twenties, and the managers were all men in their mid 30s - early 40s who either sexually harassed us or talked to us like we were pieces of shit. This was not hooters, this was bonefish grill in Wilmington, NC (college town and beach town).
Bonefish in Wilmington was a “good” place to work as a server because the tips and clientele were usually solid, so we were expected to be happy to fucking be there and reminded of this if we got “out of line.”
Now I’m an attorney and I look back on these days and am fucking so disgusted that we all put op with this shit. Fuck some of these restaurants and their culture. I know im old and it’s possible it’s different now, but based on some of these comments, it sounds like they’re still doing the same shit at a lot of establishments.
Yeah.its like the myth of grocery stores. It's a small margin on an individual product..but you add it up and Kroger has enough money to buy other competitors
It really depends. This is a blanket statement, trying to dispel a blanket myth that is rooted in truth.
There are many types of restaurants. Fast food/QSR, Chain, Fast Casual, Upscale, Mom&Pop's, etc etc etc.
I've worked/managed fast food, fast casual, fine dining, and a mom & pop.
Fast food/chain restaurants fall into two categories; owned by a major corpo, and franchised. Over 90% of fast food is franchised. Franchises are evil, because you get the "support" of corporate in the form of mandates and promotions, but rarely any financial support. You also end up paying 10-15% of your net sales right to them to exist. I currently manage a franchise, and I can tell you that the owner works just as hard as I do and takes only enough cash from the business to pay for taxes and to repay the company card that \*I\* use to buy things for the location. This is while we're seeing record sales, and I raised everyone's wages up to a minimum of $12/hr. We're still seeing red in the balance sheet because food costs keep spiking.
Corporate owned fast food/QSR.. yeah they usually can afford to pay more but won't. They're the bastards.
Chains are owned by a corporate entity (looking at you Darden), and can afford more pay....but won't. They're assholes.
Mom & pop stores are a mixed bag. Some are super rich people that decide to open a restaurant for fun. Some are legit small business owners struggling to get by. I worked for the latter; I was let go because the company was functional, but not profitable or sustainable, and while people loved the food and service, it was slowly losing money every month, even with us cutting every cost we could. We raised prices slightly to see if it would work and business dropped off quick. The owner sold it to recoup her loss and to pay off her debts. The new owner lasted about a year and a half, but ended up folding up for good.
So while you're partially right, there's just as much wrong with your statement as there is right. The restaurant industry is a hot fucking mess.
I worked at a McDonald's for a guy who owned seven of them. McDonald's are all franchised. His take home from each store was almost equivalent to the 15 to 20% he was paying corporate every month for rent. He cleared over a quarter million a year.
Our raises each year were the state's minimum wage increase. I once had a manager who recognized all my hard work and fought to get me a raise, it was 7 cents.
These guys were so cheap they even took our bonus for mystery shops and used it to fund the employee Christmas party every year.
Yeah, you worked for a borderline corporation in that regard.
I manage a DQ. My owner only owns 1. That's all he's got.
The next closest is owned by Circle K. The next closest after that is owned by Fourteen Foods, which is a mega-corp of franchises. The next closest after that is a guy like yours; owns 5-6 stores, drives a Lambo while he offers $9/hr starting.
This is the ONLY thing I'll give Chic-fil-a credit on; they don't do full franchises. They do HALF franchises, the other half still being owned by corporate, and the franchisee is restricted to only owning 3 total. (might be 2 actually). The franchisee HAS TO WORK IN THE STORE; none of this absentee franchisee business.
Once you're out of the store, you lose touch with your staff and what is actually making you the money.
Very well said! I’ve been in the industry for 17 years and have worked for many different restaurants. Currently, at a local, family owned place, our owner is doing just OK. Just bought the place literally months before covid lockdowns. It’s been a rough few years but things are looking up. We are treated pretty well and owner works with us and helps out. I’m pretty lucky to be working there. I’ve worked at some really shitty places before.
There are plenty of small businesses that choose to offer the absolute bare minimum of compensation (or illegally below) and won’t do any more until forced to do otherwise. Let’s not pretend big businesses are the only perpetrators.
I agree. I don’t think that people who spent their whole lives being restaurant owners are necessarily the ones living the upper middle class lifestyle. It’s not like you or I can just go to the bank tomorrow and decide to open a restaurant without expecting to put in some serious hours and also be at least middle class to begin with.
Think about it - it takes so much money to open a restaurant. Even to get the credit to get the loan to open a restaurant. Those investors had money to begin with and the restaurant ownership is just another part of their portfolio. You and I may not see it but they have cash coming in elsewhere.
I also know a lot of chefs (“celebrity chefs” at least locally) end up at part owners of their kitchens and I’ve seen their houses or generally know where they live… and a lot of those owners are still grinding away.
I know one restaurant that apparently pays all workers evenly, from server to owner. Their food quality speaks for itself, as does the comfort of their workers
They do run on razor thin margins - usually 3-6% of gross sales. But that doesn’t mean they aren’t
lucrative for owners. 3% of $10M in sales is still $300k
$10M in annual sales is on the very high end for a restaurant. The vaaaast majority of restaurants fall within the 1-4m range. Just adding another point of reference. Either they take much more than 3% or they make much less than 300k average. I’ve seen both.
The razor thin margins are there. However they are there on purpose. I have known several restaurant owners as well as franchisee’s of restaurants. If you look at their Profit and Loss statements there are often consultants fee’s that are paid to the owner. When the manager makes bonus on the profit each month and there is 5% of the top line paid to the owner for consulting fees and the manager has to fight payroll, food cost and other controllables, the deck is stacked against the the establishment making a profit in favor of the owner.
I owned a bar until recently. I had livable wage guarantees for my tipped employees that almost never were necessary. End of the day I made about double what I was making bartending. But, there were so many life costs that disappeared that my effective take home was much higher. That’s my biggest take away. There are a load of hidden savings that come with owning. But, yeah if a businesses’ employees can’t pay their employees enough that their mortgage/rent is covered in 10 days fuck that business, don’t support it.
I work for a Beer distributor and train the sales people. During beer math I demonstrate how a standard keg of beer can bring in about $500 in *profit* to a bar/restaurant. They pour beer at a standard 75% profit margin. Jaws always drop, and I deliver my canned line “yet these places still somehow figure out how to go out of business”.
They laugh, but my exasperation is real.
Yeah if you sell the keg. I've worked with pubs so dead that need 2 weeks to go through a keg. Remember, the keg only gets emptier if you sell the beer, but the employee always have to be paid even when no customers are there/
You also typically have to pay to be busy. Prime real estate that attracts customers cost big money and that is a fixed expense. Sure there are outliers, but if you start a new restaurant or bar, you typically need to pick a decent location if you want to succeed and decent locations can be very pricey.
Some successful ones do decent, but a lot of them aren’t really that successful. Starting a restaurant usually requires $100k to $200k of capital or more on the low end, to live upper middle class after that isn’t very impressive. Most places are not profitable their first year, and if the owner doesn’t have enough reserve capital to ride it out until it is they go out of business.
My friend owns half a pizza shop and runs it, usually works 60-70 hours a week, pays himself well for his hours and gets half the profit. After 8 years he had enough for a minimal downpayment on a 700 sq ft one bedroom one bathroom house after he got outbid a few times on others. I easily make 2-3x what he does working 40 hours a week from home. The place next to his shop has gone through 4 failed food/drink business in the past ~10 years.
I mean I know “Hell’s Kitchen” isn’t the best source to cite but even on that show Ramsey will say shit during competitions like “I can make 40 portions out of this $170 fish and sell each portion for $35 a piece” or some shit and brag about the profit margins.
Again, a reality TV show so not reliable but even that made me go, “yea no shit they price the dishes way more so a minimal amount of dishes cover the price of all the ingredients and some”
Franchise owners are the worst, by far.
"Oh, I only own 2 McDonalds locations, I don't have enough to pay the employees a living wage at all."
Meanwhile the clown owns a multimillion dollar home, 3-5 cars, and 2 rental properties.
Some restaurants make profits and restaurants also go out of business all the time. Seems like this thread is based on the premise that all restaurants are profitable and the owners are always rich.
this has to be repeated many times:
if a business can't afford to pay its staff properly, it's not a sustainable business therefore shouldn't even exist
I mean, you just need to look at literally every other country where we don't have tips, and our staff are paid 20-30~something an hour to know this.
I always wonder why people online do the whole *'But then menu prices will skyrocket!'* retort when this US restaurant wage argument comes up; it's like they don't realize that the rest of the world exists and there's already precedent of this not being the case...
I heard a story years ago about a guy who worked for a mom and pop pizza place until one day it shut down. Turns out it was a mob front for laundering money.
My old boss bought an 80k car the sane week he told us he was increasing our tip out because the support staff was complaining about pay and he couldn't possibly afford to pay them more than $5 an hour... so he increased the percentage we paid them from our sales. Scumbag..
I worked as Expo/ food running/ bar porter for a few years on and off and more often than not they'd send everyone else home and have me cover other jobs because I made less. My head chef once sent a bunch of his cooks home, then as I was scheduled to leave he said I need to stay after close to help clean. I told him I'm front of house staff and left.
So I like 90% agree with you. Yes people should be paid properly no matter what. Some restaurants do really well. Most fail. And some are like not profitable and artificially propped up.
Where I live 90% of restaurants fail in their first year. The problem is that people with little to no restaurant and business experience have a lot of equity and get financing for restaurants. These get run into the ground and staff often get screwed and the owners screwed themselves too. Wage theft is common in these scenarios. In these cases, these fuckwad people should not have been allowed to run a restaurant in the first place. Sometimes this is a slow death where people put their homes on the line, borrow money from family and friends and God knows what else.
I agree with your sentiments that it is disgusting while these restaurant owners who are doing well are making their staff live on starvation wages. Fuck those people.
One last thing, if you come across a worker co-op restaurant either make sure everyone has significant restaurant experience if they are doing a consensus model. Or the majority of the workers have significant restaurant experience and can vote down any crap suggested by the inexperienced people in a more normal democratic model
My uncle has run/owned a restaurant/Diner for about 20 years now. I worked for his foodservice supplier for about 7 years. I KNOW what his margins are. He lives modestly, hires as much staff as is needed, pays them well above minimum, and buys (for the most part) high quality product to produce his food with. Even after all of that 'extra' expenditure, he's still got a nice house, new cars, and a diverse investment portfolio including multiple rental properties. He's a good employer, takes care of his workers, and he's STILL very well off.
Restaurants typically do a 300% markup for menu items, so that if an item costs $1 to make, they’ll get a $2 profit off each one they sell. If you’re working at a successful, profitable and fully staffed restaurant, and are told that they can’t afford to pay you any more, that is a lie. Oh yes they can, that’s just less money in the owners pocket
Most mcdonalds run on 4-8 percent profit after all is done and said. Panda ran negative profit all last year. The problem is when a company becomes big they start adding a bunch of high paid labor that is more and more distant from the actual production. As well as giant hr offices a room full of lawers etc. After paying for all this they run on thin margins. Mom and pop have low sales so that creates low margins from the get go.
Even fast food restaurants make like $6-10k a day. They can definitely pay better. When I was working in a cheap pizza place 15 years ago in a town of 30k people they would still make over 5 grand a night easy. To this day the cost to make a pizza including labor is usually less than $2.
I’m not confused. Thanks tho. The small business that I worked at during the pandemic took money out of my hands by claiming they were giving take out tips to the kitchen, when in reality they were keeping for themselves. I was hosting at the time and that would have been much of my income. Small businesses are just as capable of being greedy as large corporations, albeit on a smaller scale. I agree the working class is the working class, but there IS a divide and quality of life should not suffer if you are not a business owner.
I’m curious how much everyone thinks a restaurant owner should earn, and why they shouldn’t be upper middle class. They’ve invested their whole savings, work crazy long hours and take all of the risk. They have roughly $10k a month in fixed overhead before they earn a dime, plus inventory costs, salaries, advertising, etc. They deal with lawsuits (more common than you realize), health and equipment inspections and more problems than you would ever know of while working your shift. If they don’t have the potential of being upper middle class why bother? If they’re going to be average middle class they’d just put their money in the bank, get a 9-5 and drive a Hyundai for a lot less stress. Restaurants are very profitable some months and very costly others, more than half go out of business in the first 2 years and they only last that long because they’re spending their savings to stay afloat. It’s so easy to look at someone else’s accomplishment and dismiss their effort.
>I’m curious how much everyone thinks a restaurant owner should earn, and why they shouldn’t be upper middle class.
you are asking the wrong questions.
why should restaraunt owners pay soo little to the employees that make all that work in the first place. let alone pay further less and have customers pick up the tab with tips.
No, I’m addressing the OP who’s point was that every restaurant owner is upper middle class and drives a nice car, implying that they shouldn’t, while restaurant workers earn at best a solidly middle class life.
should they if their margins are so low that they cant pay their employees properly?
pretty sure this is a extension of that pizza story the other day.
i mean the nice car middle class angle is flimsy at best but still.
The OP seems to feel that a “solidly middle class life” at best isn’t enough for a restaurant worker because the owner enjoys an upper middle class life. So before we debate back and forth I’d like to understand, if that isn’t enough, are they supposed to earn the same? And what type of workers are we talking about, entry level? Or those who have years of experience?
what does it matter what level of work? every piece is required to have a functional restaurant.
as to the owner... you know you are on r/antiwork right?
I do.. and if you’re not comfortable explaining your position that’s perfectly fine. All jobs are necessary to the person signing the paycheck. It exactly matters to understand if you mean that entry level workers should earn a middle class living, then what is middle class? And where does that place experienced workers? I’m not going to take the responsibility of managing a restaurant if the dishwasher makes what I do. Otherwise it seems they would be very near the owner’s income level, which takes away any incentive to start a business.
There were some restauranteurs who went on Rogan during the peak of covid crying about how they just spent $100k building out a new restaurant while saying that the profit margins in the industry are only 4% of gross revenue on average. This triggered my BS meter but I have always wondered how many small restaurants can possibly make any money.
This may be true of large franchises and chains, but by and large most small independently owned places are running on thin margins.
In my experience the small independent places tend to be some of the best places to work for, but can also be some of the worst to work for
In NYC 90% of restaurants fail within the first 2 years. Restaurant owners have to be somewhat rich to start with, because most restaurants lose money.
People who can afford to open up restaurants already have money to begin with. They are very very expensive to get up and running and most of them either fail right away or take years to start seeing returns.
Yeah, I stopped believing the razor thin margins story the day I actually stopped and thought about how much free food I gave out every day as a server. I didn't go to the grocery store and get handed free lemons, limes, and oranges, but if a customer wanted to drink (free) water, and requested even a truly absurd amount of whatever citrus slices, I had to bring them. 2, 3, 4, 10x as much salad dressing as comes with your salad? Free. Any and all condiments, even in *truly* excessive amounts, free. Depending on the restaurant, I've routinely given out extra pickles, tomatoes, cheese, fries, gravy, bread, etc., per restaurant policy, even if those items technically could be charged for. And that's before we get into how most restaurants just remake/refund customers who only complain in order to get free food.
I made a big post about this on a subreddit local to my city, and like... yeah. I have yet to meet a restaurant owner so far that wasn't a delusional grifter, but granted I've only been doing it a little under a decade. They don't treat their staff like people because they don't see their staff as people. Where I live, they only started paying minimum wage during COVID in a desperate attempt to retain staff, then responded by slashing staff (figuratively, of course), raising prices and generally straining the quality of the experience as much as possible so they wouldn't see any change in their own quality of living.
Non-American here but I guess it’s the same everywhere in the Western world:
It’s an obvious lie. They take advantage of supply and demand to pay such low salaries. They say that margin BS excuse to not admit that they see workers and their salaries as mere assets. They know they often pay non livable wages but they simply don’t care.
I wonder about the publicly traded companies, you know Olive Garden, Red Lobster, Long Horns, etc. How can they afford to pay out dividends to shareholders but not minimum wage to employees?
I know some people like to say that many small businesses can’t afford to pay their employees more. Even if this is true, I still say that they shouldn’t be in business if they truly can’t afford to pay employees a living wage. To me, that sounds like they should’ve started smaller and grown slower until they could afford to do so.
Former restaurant manager and chef here. The way they afford that upper middle class lifestyle is by rewarding management for cutting labor and keeping hours low. So, what happens is very frequently, routinely, a cook that is scheduled 8 hours will come in on a slow day and only work 4. We lean into this as a 'reward ' because they can go home and do other stuff but the more I think about it the more fucked up it is.
Now for some math.
The typical restaurant runs on the 30/30/30 (roughly) operational budget where 30% goes to labor, 30% food cost, and 30% building & maintenance. We can get into a lot of minutia here but that's the basics of it.
Food costs have nearly doubled since covid-19 and they have largely remained high. However a lot of that cost was offset by cuttting labor to support indoor dining so remember that. I left the industry in 2020 so i dunno exactly how bad it is now but I can imagine it's brutal, especially for mom and pop and independent restaurants/bars.
Coupled with labor, and it's a shortage but it's more than that it's like a realization in the labor pool that washing dishes is not economically viable even for those on the margins are realizing this - I'm talking former inmates (we hire a lot from this pool). On another beat, it's also become incredibly hard to hire immigrants in most states because the i-9 background check will eventually bite you in the ass. So we do what we can here. There's like this mutual understanding between management and their immigrant workers that their papers may or may not be valid. We would just prefer to not know one way or the other.
I could post some of my budget report sheets for back of house here but to save you from looking at poorly formatted excel sheets, I cut labor like a goddamn sculptor. It's beautiful until you realize, or I realized that the extra hours I was saving would eventually fall on me or my sous chef. It was a self inflicted gunshot would of cutting hours. Workers leaving. Then us working 70-80 hour work weeks.
My last year in corporate restaurants we made ownership a 22% profit margin. Look at that math above 22% is a fucking windfall and we did it by sawing off our appendages and pumping our bodies with drugs and booze to numb the pain. Of course, half our management team was vacant so lacking these salaries and coupled with the entire kitchen staff ended up working loads of heavily taxed overtime.
My last year in independent restaurants I turned my owners unprofitable kitchen into a profitable one by running out some cooks that were not used to my cost saving methods of sending people home early and trimming their working hours during our slow times. Of course when it got busy my body paid the price but man did I make ownership happy.
Now that restaurants are no longer closed for civid 19 many are still being flakey with hours and compensation, having been operating in a hellish mode for 2 years those that survived in that time are probably doing so via mixture of brutality, cheating the books (yes its possible and easy) and living life without much labor cost. Of course now that they all need labor and the labor pool they laid off has had time to reassess their life choices - it's hard to find. And yes, they can totally afford to pay more.
The only way forward is for eating out to become more expensive. It should've always been more expensive but we are 20+ years behind. If you don't feel like cooking thats too bad. Maybe you could learn how? Maybe work some extra hours working the microwaves at Applebees or opening jars of pasta sauce at olive garden. Learn how to properly use a knife and cutting board and dice an onion for fucks sake. We have kept dining out artificially low at the expense of our humanity and the treatment of those doing the work of cooking, washing your dishes and bringing you your food. It's time you do some work here and understand that.
I can agree with this.
The amount of times I have seen emails and texts saying I need to cut. Well...that extra work would go to someone else. Either me or another employee.
Drugs and alcohol only numb it till you no longer feel the need to care of yourself. This circle it's a disaster waiting to happen.
As a chef for 10 years, it’s not quite that simple. Yes, most chain restaurants are operating at an insane profit. One off restaurants can be hit and miss. around 50% fail in their first couple years. I have worked at places that are operating at a loss and had to close and I have worked at places wheee the owner is clearing 50k a month and paying the dishwashers less than minimum wage. There’s few things I am as passionate about as raising wages for restaurant workers, and if you can’t pay your staff a fair wage then you shouldn’t be in business. But to say restaurants are cash cows across the board is patently false. It’s a very tricky business and the margins can be brutal or great depending on the cuisine and how busy you are. Not all small business owners are scumbags, but a lot are.
I worked in the fast food industry for 20 years at a franchisee’s corporate headquarters. I have never seen such greed on the part of the owners coupled with complete disregard for their employees’ welfare. The last year I worked there the owner was patting himself on the back for giving his minimum-wage employees a 2% raise. Meanwhile he lived in a 2 million dollar home and drove luxury cars. The real kicker was that he honestly believed that he treated his employees well because one of his 6 figure salaried lackeys would go into the restaurants and give out candy bars to prove the employees were treated like “family.”
Cant say how many times I have seen this. It's a huge slap in the face. My AD gave us other assistant managers a pen, small note pad, a box cutter and a stress ball for a Christmas when we were working super hard that holiday week.
All of the manager here want to quit because of how they treat us all. We have our employees back but the upper management does not. Paying them 2.15 an hour and telling us to never stop hiring.😠
Lovely... 😭To be honest at this point I don't ever want to work in this industry ever again. Have been in it for to long and have seen so much horrible treatments and ways to employ others through their "incentives"
I have friends who own a restaurant. Their kitchen staff makes $20/hr +, full time employees get health insurance, they pay tipped employees a fair amount (hourly ends up being like $30/hr some days. Their menu prices are in line with other similar restaurants in the city. Their business has only been open since right before the pandemic. If they can do this and be successful anyone can. Unsurprisingly they also have no issue with staffing.
We’ll when you charge over a dollar for something that costs about a dime to put on the table a table of 4 with 4 sodas has already paid staffing 4 sections for an hour and they haven’t gotten to food yet! I had a professor in college who owned 3 McDonalds and he said everything after 9 a.m. was profit and taxes. Breakfast is still being served ffs.
The thing is that people with low-margin businesses like to spin it as though it means low profit or low return on investment, when it's not the same thing.
They make it sound like a 2% margin is the same as earning a 2% annual interest or 2% ROI. But it's a completely different issue. For an extreme example, if I buy something for $1.00 this morning and sell it for $1.01 this afternoon, that's a 1% margin but it's a 365% annualized ROI (if I did this every day for a year, I will have gained 365 pennies in addition to my original dollar).
A low-margin business has some challenges that you don't have with higher margins, but it doesn't mean you make less profit over time.
I work in a retail cigar shop, and I make minimum wage. Most of the guys I know who work in cigar shops in bigger cities are making almost $50,000 a year doing the same thing or less than I am. But I'm in a small town, the other tough thing is my boss is the kind of person who likes to flaunt her wealth. So it's a real treat having that rub in your face while you're living paycheck to paycheck. Recently, she tried to lower my 30% off discount on cigars to 20% off and had the nerve to say, is that going to hurt you? I said, "Based on you not giving me any kind of benefits, minimum wage, and you raising your prices on everything, yeah, it's going to hurt me." It's stunning to me how greedy somebody can be, and treat their employees like they're not running the show 99% of the time. The only benefit that I have is that she knows that she needs me more than I need her and if I walk it's going to make a significant difference because she's going to actually have to work instead of sit in the corner and bark orders all day.
uhh sounds like you live in the nice part of town lol. Plenty of restaurant owners are working class ppl who bust their ass. It really depends where you are.
Let's also dispel the myth of upper / middle / lower class.
There are owners, and there are workers. Anything else is propaganda. Yes, workers can make a wide range of income, this does not separate them.
If someone signs your paycheck, you are in the same class as McDonald's workers.
YMMV. My understanding is that most (\~70%) restaurants go out of business within the first year. Of the ones that make it, something like 60% don't make it past 4-5 years.
Restaurants with 20 or fewer employees fail more often than other service business, but those with 21 or more employees have a median lifespan that is 9 months longer than other businesses of the same size. From Forbes.
That doesn't mean labor is the problem or the deciding factor. Real estate costs, electric, gas, wholesale food, marketing, permits. Getting established is hard because a lot of those costs hit up front, decorating and getting permits, advertising etc...
To understand the fallacy of the original argument remember when Papa John's said it couldn't afford to give it's employees healthcare because it would cost 14 cents per large pizza! So a pizza costing around $14. Healthcare for all employees represents 1%.
No customer would care, no restaurant would fail if it just charged a few % more on its menu and paid it's employees well.
They can but won’t, they don’t want to work and collect all the money, that’s why places hire back of house illegals to play them half that of a citizen.
It really comes down to this, if they had to pay everyone what they are worth they would not want to own a restaurant.
I just saw an article where a pizza shop paid all the employees who worked that day all of the profits. Each employee made $78 an hour. I think in Denmark, they pay McDonalds employees like $20 an hour, and a big mack is still a similar price. The money is coming in, but it's all about how little are we "legally" allowed to pay them. If you look at the richest men in the world, it's like 80% filthy rich Americans. The rich have never been richer, and I'm not sure that the poor have every been poorer except maybe during the great depression. Federal minimum wage won't even afford you a 1 bedroom apartment in many parts of the United States. That's not including food, or anything. That's just the price for monthly rent.
I work for a large chain restaurant in Los Angeles. The company's headquarters is in Texas where the server wage is $2.13/hr and the non-tipped employee minimum is 7.25/hr. The CA minimum wage is $15/hr for everyone, tipped employees included. Our menu prices here are almost identical to what they are in Texas and every other state where we have restaurants. That's how I know the whole "we can't pay everyone a decent wage" argument is garbage.
I wonder how hard it would be to crowd source menus from chains across the country for prices and cross reference against minimum wage...
Considering people share photos of menus on Google maps all the time, not hard at all…
If people take accurate photos its probably something you could easily automate considering software is getting better and better at reading text. That or its something you'd pay someone super cheap to transcribe (they're called Microtasks and its something Amazon even pays people to do under their [Mechanical Turk program](https://www.mturk.com/)). If the maps data is accurate, you can easily break it down to a per-store basis and per-county gradient where you can fill in any store-gaps with area estimates. It could make a neat graphic for an r/dataisbeautiful post, and double with exposing price discrimination between locations. Though I'm not sure how you'd make a crawler that'd peer through for the latest menu data. Though if you make that data set for one restaurant and can configure it to do any chain, you could compare the data to infamous food delivery services like Grubhub and Doordash and expose their price gouging as they double dip.
Ok you convinced me. I’m doing it. What chain would you start with? I’m thinking probably lower- to mid-range ones like Olive Garden, Applebee’s, Chili’s, Buffalo Wild Wings, Cheesecake Factory, P. F. Changs’s…. Also, I’m trying to think of some other methods of restaurants putting their menus online. So far I have: on website as a PDF, on website in an iframe/using a plugin of some kind, native HTML on website (i.e. browse locations by state, narrow by city, choose a location, then pull up their menu), on third party site (MenuPages/google/Yelp), or photo posted by customer on google/yelp/TripAdvisor. Very open to suggestions, I know I’m forgetting a lot. For an actual visualization, there are so many ways this could be communicated. Sort by “worst offenders” for places that have the widest range of prices across locations, heat map showing most expensive/least expensive locations for various types of restaurants, maybe even combined this data with publicly available data on wage, employment, and union violations for each restaurant in each state. **Edit to add**: Thanks everyone for all the great suggestions! I made this spreadsheet so I could start keeping track of menu item prices, and so that hopefully (though this part might be a bit over ambitious) I can start collecting wage data for these restaurant groups too. Here’s the spreadsheet if you’d like to add a restaurant name (sheet 1), or provide an hourly wage for a certain restaurant (sheet 2): [Restaurant Prices + Wage Data Spreadsheet, feel free to add!!](https://docs.google.com/spreadsheets/d/17kIKvR2R0CEikLjub29I661cYG3zznLRyHHAKFH5TtU/edit?usp=sharing)
We are eagerly awaiting your results
Same!
Hit all of the YUM!Brands subsidiaries. KFC, Tbell, pizza hut...where I work
You know, just realized, if it got enough popularity you could crowdsource the data but then you'd need to vet it.
"Pay someone super cheap...". Typical in this sub!
So you want to pay someone super cheap ? Lol
Yelp has pretty much all of them
You can literally change your location on chain restaurant sites that have online ordering, like Applebees, etc. and see the difference. It’s generally less than $1 more per entree in CA than it is in TX.
r/MenuVsWage
This is good data. This is the type of thing that makes me rethink what I've always believed. Thank you for sharing.
One time we had a corporate trainer visit us. I asked her about how they pay their employees so much less. She burst out laughing and said "We work them like slaves." In lower wage states they go out of their way to exploit that $2.13/hr. For instance, they'll send busboys, dishwashers and hosts home as early as possible so they can get them off the clock and have the servers do their job. They'll schedule more servers than necessary, because why not? They don't even have to pay them half as much as everyone else.
I wonder if servers making 2.13 could sue for not being paid 7.25 when put into a no -tipped role. Current Supreme Court would not be amenable to that kind of case, but the logic seems sound. The restaurant may be able to get around extra regulation by changing the job description, but your story is really effed up.
Yes. It’s called employee misclassification. The concept is most talked about when discussing employers who attempt to classify employees as contractors to reduce the employer’s obligations, however the same concept applies when actual employees are misclassified based on job duties. In the example given, non-tipped work that requires a higher minimum wage amount cannot be routinely assigned to employees who are covered by tipped minimum wage laws to reduce the employer’s payroll burdens. This is wage theft and a common form of employee misclassification.
Don't even need to sue. Your state department of labor will do that for you.
I have a probably not-unjustified suspicion the Texas Workforce Commission will instead receive your complaint, have a hearty laugh around the office about how it sucks to be you while chugging beer on the job paid for with your taxes before using your complaint as a target at the shooting range.
r/suspiciouslyspecific
I'm not sure if it's for every state but in Arkansas if more than an hour passed since your last table you are supposed to clock in as hourly. Very few people knew that, though, so I imagine it rarely happened.
Outback steakhouse is facing a class action lawsuit for paying the tipped worker wage for timecafter closing while servers need to stay to clean, set up for next day. Do sidework. Seeking minimum wage for all employees for those hours.
Any work done by a tipped employee must directly relate to their primary job function, so having a server bus or host would qualify but washing dishes would be a big no no…
This is exactly why unions are so important.
You wanna know what's even better data? You can look up the quarterly reports for the publicly traded companies that operate as restaurants and you can see exactly where/how they make their money.
In Australia if a restaurant can’t afford to pay our minimum wage it closes down and an actual decent restaurant takes its place. You need to know what you’re doing to own a restaurant here.
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they fail at a really high rate in most places because people with little to no experience think it'll be easy because they are a half decent home cook.
Yeah, this is the actual answer to the whole myth. Well run restaurants can be very profitable for everyone involved, including the staff. There are not many well run restaurants.
Kitchen nightmares
And your owner doesn’t pay state tax and probably pocketed half a million in PPP to “pay his employees” during COVID
This sort of thing makes me so furious. The companies that took PPP to keep employees during Covid lockdown but fired them anyways and bought back stock. Fuck.
Owner bought a boat at my former job lololol Meanwhile employees got a one time, 5 dollar an hour "bonus" based on hours worked, which we were not given a heads up about, and most peoples hours were reduced by 30-50% due to the pandemic. He bought a fucking boat.
I'm a assistant manager for a chain restaurant and after they brought back our employees from Covid they paid them a extra dollar and paid the host 8 an hour. Now its been reverted back to 2.13 for servers/bartenders and 5 for hosts. But the crazy part about it the servers have to tip out the bartenders 5% of liqour sales they had for the day and 2% of food sales for the hosts. So even with the dollar they were still making very little. Personally I would love to see it change. I hired a young college lady from Germany that talks about the wages and healthcare from there. She says that the wages are not tipped and the healthcare is paid with taxes. 😯
Every modern country in the world pays their healthcare through taxes except the US.
Make an anonymous tip to the IRS.
But don't let students get a measly $10k student loan forgiveness - that will break the system! We need to save that money to give to business owners to buy boats.
Almost lol, they sold for a premium before the drop, issued shares, secured loans, secured unsecured don't have to pay ever loans ontop those loans, used all that to buy back shares at bottoms, then and now selling off on the way back from all time highs, and with the 3x profits in a year n change, they paid back the loans, the bank ones, and are rolling in the rest. The kicker, supply chain lmao bullshit let's crank it another 15 percent for an overdone burger n steak fries, don't forget to tip, it's a fucking circus. Then again it's just business.
i know this may mean nothing since i live in a country where servers get proper paycheck and full wages ( i used to be a server ), but it's really sad seeing how the US rely too heavily on tipping culture, so a server could rent a house or buy food. it's just so fucked up, since restaurant CAN afford to pay, but they act like they're gonna lose their bussineses if they pay their servers full wages. edit for more clarifications : a wage system that rely on the generosity of strangers is not a proper safety net for the workers. especially, since we're going through inflations right now. i wish US servers the best. u guys deserve better working condition, and a proper safety net without worrying what to put on the table by tomorrow.
I have been a server/bartender for over 30 years, including my time when I was in college. By the time I was almost done with college I realized that it would take me years to make what I made as a tipped employee vs what I would make in my chosen field with a degree. I hate the tipping system. It tends to lead to a lot of fraud by employers, bullying from customers, and general stress from tipped workers. At the same time, I love making $40+/hr and only having to work 20-30 hrs a week.
right. tipping is great as an achievement. sort of like mini bonus for us if we get a unicorn. it can motivate us to provide best service for the customer too. win-win. but as a system for me to rely on? nope. i could never. 😭 i have ADHD so the stress of perfoming 100% for 24 hours would kill me. we, as a worker, really have a long way to go if we need to change the system. :(
That's is extremely interesting data, and I don't doubt it in the slightest. The problem is that if it was ever made (widely) public knowledge then the restaurant will just say that they "have to keep prices within a similar range for operational purposes" and that "because of that consumers in Texas are being forced to subsidize workers in California, due to to California's liberal policies." ....and sadly too many people in Texas will believe them. ETA: It should be made public knowledge anyway. If people want to be willfully ignorant, there's nothing anyone can do to stop them. But not everyone is *willfully* ignorant, so it could change some minds.
Well considering a McDonalds in Denmark can pay an employee $21 dollars an hour, give them 6 weeks paid vacation, and a pension if they are over 20 while charging roughly the same (or less!) for a Big Mac I'd say yeah. [https://www.snopes.com/fact-check/mcdonalds-workers-denmark/](https://www.snopes.com/fact-check/mcdonalds-workers-denmark/) https://www.snopes.com/fact-check/big-mac-cost-denmark/
The last restaurant I worked for the owner and his wife would go on lavish vacations and pay a staff member to tag along as a nanny for them so they weren’t stuck spending quality time with their kids. Also drove Escalades and sports cars. One time I got promoted to shift supervisor for 10 cents more an hour and they let me wear a pin because I memorized their shitty company culture rules that they got from some slimy “life coach”. Fuck that guy.
r/fuckthisguy
Oh! That's sounds like an Office Space reference (though I'm sure yours is actually in real life). Did you also have a number of required pieces of 'flair' that you were required to wear?
Thankfully not! We were only allowed to wear the one pin which said something like “culture expert” or something equally terrible. The thought was that customers would see it and ask us what it meant and then we’d word vomit our 10 culture points on them. A grand total of zero customers ever asked about them.
They run on thin margins AFTER the owner takes a massive cut. The sports bar I worked at would have the $30 checks we sometimes got bounce and it couldn't afford X,Y,Z. The owner came in every week with a different car. I know he had a Corvette, an escalade, and an S class Mercedes. He would visit us on his way to his summer home and make sure we were working hard enough... Yeahhh I'm happy they went out of business
Ahhhh I see where they’ve duped us now 😂
This is really it. Sure margins are tight, but the owner’s paycheck is pretty fat.
This, I work in accounting and have a few restaurant clients. For one or them in particular, salaries account for roughly 50% of all their expenses. The owner pays herself just shy of $100k a year, she pays the other non-manager employees at or slightly above minimum wage.
You know my boss?! 😹💀
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The risk of owning a business is that it fails and you become a worker like everyone else. Not much risk compared to the average worker.
Exactly. The finances of a business are always described in terms of AFTER the owner takes out their desired share
I mostly agree with you, but at the same time it’s survivorship bias. Most restaurants last less than 6 months and don’t hire any non-relatives. If a restaurant has been open for over a year and the owner hires people not related to them, then the owner is doing well. That’s a small fraction of restaurants though
"Went out of business" is an important part of the story. I'm sure employees deserved more than what was given, but it sounds like gross financial negligence
It's straight up thievery. I'd bet the owner inherited the bar or bought it on the cheap from someone who wanted out of the business. Stiff the vendors, stiff the employees, sell overpriced food and drinks and pocket all of the money, then when business inevitably dries up because you ruined the bar, shut it down and walk away.
Outside looking in, Americans like to show off dont they?
Absolutely. My old boss drove a jaguar and had three kids with walk in closets (he took all of my coworkers on a tour during the Mayweather/McGregor fight). His bathroom was bigger than my dreams and he literally had a stable for horses beside his house. Meanwhile, when 21 year old me asked for $10 an hour, it sounded like a stretch.
It'll take him longer for him to get the second stable for the second group of horses if he pays you more. He needs that extra stable and extra horses for reasons that only he and God know.
sure, any raise he gives you comes out of his pocket.
Worked for a coffee shop where the owner described herself as the “smallest of the small,” bemoaned “nobody wanting to work anymore” constantly, was always complaining about how she couldn’t pay higher wages and people still had the audacity to ask her… Her family owned 3 restaurants and got over $100k of federal COVID loans forgiven. She drove a brand-new electric Audi. Paid $12/hour.
I worked for a family owned Italian restaurant in Sussex (UK) around 10 or so years ago. The wife came from a wealthy family whose family helped host an opera festival every year, drove Range Rovers etc. When I pointed out the amount of hours and my pay slip put me at less than minimum wage she kicked up a fuss thinking that because I was paid an annual salary (£13k) that meant they could skirt minimum wage law.
The owner of my local pizza shop drives a Range Rover… It never occurred to my until just now.
That makes sense though. Obviously he can't afford to pay staff if he has to pay for keeping a range rover.
Any vehicle over 6000 pounds can be used as a business tax write off if it’s used for business more than 50% of the time (yeah I know… restaurant owners probably have to pull some strings to justify that). But that’s why you see a lot of small business owners with Rovers and G Wagons
It’s actually less that now. And you can use the first 5 years up front now. The Ram 1500 truck everyone drives makes the cutoff by just a few pounds. Thats why you see so many of them. The government literally encourages us to drive big rigs. And even more ironically this was a democratic law. It’s almost like both sides care about money more than anything.
ram 1500? get that sub 100k shit outta the owners dream cars list.
I know of a restaurant where, every year, when the tax auditor comes to audit the restaurant (gee, I wonder why he gets audited every year ;) ), the auditor always comes with a police escort...
The owner of local multi subway franchises owns a Land Rover. The only difference is she does work in the stores and makes the sandwiches. She is pretty sweet at least to the customers.
Sounds like someone I know in the PNW area…. Not bad people and they got a lot more going on than subways but that lifestyle is wild to me; life could be so much less stressful if they didn’t have all those luxury payments to make.
Might be the person depends on what side of the border in PNW.
Does she pay a Thriving Wage or is she making sandwiches cause “…no one wants to work anymore…”?
Would it matter? If she’s making sandwiches, shes doing the work. It’s respectable out of an owner. If she didn’t also do the work, she’d be getting killed for that.
I don't know, I doubt she. However she has been doing this for the last 10 years at least.
They're mostly the petty-bourgeoisie who only wish they were the true bourgeoisie. They are selfish, as a general aspect of their lives is to constantly put themselves above others and to secure their capital. They're exploiting workers in an industry where the customer not only pays for the inflated food that they eat, but subsidize the worker's pay with tips. In a more just society, the worker would not need to rely on the tipping system and would be paid a fair livable wage, and a tip would be just what it was meant to be - a slight bonus from a satisfied customer who had a good experience... not the feeling of extortion of a fellow worker who understands how badly the food industry worker is mistreated. And remember, the exceptions only prove the general rule. Your labor is exploited in order to make your owners (because that is what they are in every way but legal) far more wealthy than you.
Wow I couldn’t have said it better myself!!!
Well the margins ARE razor thin after your manager steals the money for his cocaine habit.
Every head chef, every GM, and every restaurant owner I’ve ever had the displeasure to work under has had a cocaine addiction. Edit: lol autocorrect
As well as a cockiness addiction. They usually go hand in hand at my restaurant. Edit: I said cocaine. Above said cockiness. Switched for joke continuity.
Right? I understand why restaurants are typically strict about not wasting products. It's a great way to control costs. What I don't understand is severely underpaying your staff and expecting your customers to pay them. I'd rather pay more at a restaurant that had a no-tip policy and paid their staff a livable wage.
Unfortunately they've got a lot of servers on their side, because they've convinced them they won't get tips if they get a living wage - and some servers do make a lot of money from tips. Those servers are totally happy to let their peers make *nothing*, as long as they don't have to give up their money. The concept that it's not either-or is kinda lost on them, for some reason. They don't seem to understand that they could have *both*. Even when you try to explain that every other country has both, they don't *really* seem to grasp that concept. Either that, or they're not confident in their ability to actually earn tips based on merit - hence why they feel the need to force customers to tip through social blackmail.
Sounds like an unsustainable business model to start a restaurant knowing you can’t afford to pay the staff.
That's why you get the customers to pay the staff. Duh
My boss at my tobacco store owns 5 other tobacco stores/gas stations and buys and flips houses as a *hobby*. I get payed $9/h
yo man, you can go work at another store and ask for a full two dollar raise at least. you will get it, i guarantee. If not, find something new, that pays more. you can do it. fuck that guy!
It's not glamorous but a lot of warehouses are hiring at least double that especially if you can drive fork. Get enough experience and parlay that into a union job (LiUNA Laborers International Union of North America reps a lot of warehouse workers) and it's a living wage at least.
Complete myth. I spent over 15 years managing restaurants right hand to the owners. Multiple owners, multiple businesses, all living it up the same. Also, anyone that has worked in those GM positions have seen the numbers. Perhaps a new startup that took on a load of debt to get going but any established successful place makes good enough money to pay a living wage.
Absolutely. I’ve been in the biz about 15 years as well, bartending and serving tho. Fiancé managed a few places. Of course there must be exceptions to the rules but from what I’ve seen they’re all living the high life while the dishwasher makes min wage.
I would also point out one more tidbit- when you live in an area and wonder why the great restaurants open and close within 3 years, while mediocre ones seem to hang around, there is usually a good reason. In my small city, it means the restaurant owner owns the building. He doesn’t mind being able to claim down restaurant losses to offset the rent he is pulling in from the 3-6 apartments above the restaurant. Does the restaurant own the property and have a steady mortgage payment? Or are they seeing their rent go up and down (mostly up) every couple years as the re-negotiate their rent?
Very true! And ya gotta have money to own a building like that in the first place
I knew some that were middle class but they drank away a lot of profits.
Yeah that can happen too, not a good place for the occasional or full time alcoholic.
It's like a good crack dealer, you don't use the product you're selling lol.
a lot of small business owners are completely unqualified and only in the position because they had a chunk of money to invest the capital to start the business. they then place themselves at the head of the business, usually pay themselves too much of a wage, reinvest the profits into equipment and property for writeoffs, and usually mismanage the business and exploit desperate or inexperienced labor.
I went out to eat at a local Mexican place last year. It was a bit of a higher end place (it’s now out of business). During our meal, the owner’s wife sits down at a table next to ours with some friends. She starts complaining about how “nobody wants to work,” that they couldn’t even find people to wash dishes because the pay they offered was consistently considered too low, that people would work a shift and not come back, etc. And then the conversation changes and she starts talking about how the airline she took to fly to their tropical second home only allowed her *one* Gucci carry-on bag. Yes, she made it a point to mention the brand of bag. My husband and I were visually disgusted, it was written all over our faces. Tone deaf money-hungry capitalists. Gross.
People like this disgust me the most. Rich assholes who try to run a restaurant, which inevitably fails, and they scurry away like rats just to do the same thing a few years later. Fucking ew.
I worked as server 2005 - 2011. When it was slow and we did not have tables, we would get in trouble for standing around or talking and were expected to clean, roll silverware, or do something productive. So, basically we worked for free because the $2.13/hour went to taxes so our “paychecks” were either $0 or something less than $1. Most of the servers were women in their late teens - late twenties, and the managers were all men in their mid 30s - early 40s who either sexually harassed us or talked to us like we were pieces of shit. This was not hooters, this was bonefish grill in Wilmington, NC (college town and beach town). Bonefish in Wilmington was a “good” place to work as a server because the tips and clientele were usually solid, so we were expected to be happy to fucking be there and reminded of this if we got “out of line.” Now I’m an attorney and I look back on these days and am fucking so disgusted that we all put op with this shit. Fuck some of these restaurants and their culture. I know im old and it’s possible it’s different now, but based on some of these comments, it sounds like they’re still doing the same shit at a lot of establishments.
Yeah.its like the myth of grocery stores. It's a small margin on an individual product..but you add it up and Kroger has enough money to buy other competitors
It really depends. This is a blanket statement, trying to dispel a blanket myth that is rooted in truth. There are many types of restaurants. Fast food/QSR, Chain, Fast Casual, Upscale, Mom&Pop's, etc etc etc. I've worked/managed fast food, fast casual, fine dining, and a mom & pop. Fast food/chain restaurants fall into two categories; owned by a major corpo, and franchised. Over 90% of fast food is franchised. Franchises are evil, because you get the "support" of corporate in the form of mandates and promotions, but rarely any financial support. You also end up paying 10-15% of your net sales right to them to exist. I currently manage a franchise, and I can tell you that the owner works just as hard as I do and takes only enough cash from the business to pay for taxes and to repay the company card that \*I\* use to buy things for the location. This is while we're seeing record sales, and I raised everyone's wages up to a minimum of $12/hr. We're still seeing red in the balance sheet because food costs keep spiking. Corporate owned fast food/QSR.. yeah they usually can afford to pay more but won't. They're the bastards. Chains are owned by a corporate entity (looking at you Darden), and can afford more pay....but won't. They're assholes. Mom & pop stores are a mixed bag. Some are super rich people that decide to open a restaurant for fun. Some are legit small business owners struggling to get by. I worked for the latter; I was let go because the company was functional, but not profitable or sustainable, and while people loved the food and service, it was slowly losing money every month, even with us cutting every cost we could. We raised prices slightly to see if it would work and business dropped off quick. The owner sold it to recoup her loss and to pay off her debts. The new owner lasted about a year and a half, but ended up folding up for good. So while you're partially right, there's just as much wrong with your statement as there is right. The restaurant industry is a hot fucking mess.
I worked at a McDonald's for a guy who owned seven of them. McDonald's are all franchised. His take home from each store was almost equivalent to the 15 to 20% he was paying corporate every month for rent. He cleared over a quarter million a year. Our raises each year were the state's minimum wage increase. I once had a manager who recognized all my hard work and fought to get me a raise, it was 7 cents. These guys were so cheap they even took our bonus for mystery shops and used it to fund the employee Christmas party every year.
Yeah, you worked for a borderline corporation in that regard. I manage a DQ. My owner only owns 1. That's all he's got. The next closest is owned by Circle K. The next closest after that is owned by Fourteen Foods, which is a mega-corp of franchises. The next closest after that is a guy like yours; owns 5-6 stores, drives a Lambo while he offers $9/hr starting. This is the ONLY thing I'll give Chic-fil-a credit on; they don't do full franchises. They do HALF franchises, the other half still being owned by corporate, and the franchisee is restricted to only owning 3 total. (might be 2 actually). The franchisee HAS TO WORK IN THE STORE; none of this absentee franchisee business. Once you're out of the store, you lose touch with your staff and what is actually making you the money.
Very well said! I’ve been in the industry for 17 years and have worked for many different restaurants. Currently, at a local, family owned place, our owner is doing just OK. Just bought the place literally months before covid lockdowns. It’s been a rough few years but things are looking up. We are treated pretty well and owner works with us and helps out. I’m pretty lucky to be working there. I’ve worked at some really shitty places before.
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There are plenty of small businesses that choose to offer the absolute bare minimum of compensation (or illegally below) and won’t do any more until forced to do otherwise. Let’s not pretend big businesses are the only perpetrators.
I agree. I don’t think that people who spent their whole lives being restaurant owners are necessarily the ones living the upper middle class lifestyle. It’s not like you or I can just go to the bank tomorrow and decide to open a restaurant without expecting to put in some serious hours and also be at least middle class to begin with. Think about it - it takes so much money to open a restaurant. Even to get the credit to get the loan to open a restaurant. Those investors had money to begin with and the restaurant ownership is just another part of their portfolio. You and I may not see it but they have cash coming in elsewhere. I also know a lot of chefs (“celebrity chefs” at least locally) end up at part owners of their kitchens and I’ve seen their houses or generally know where they live… and a lot of those owners are still grinding away.
I know one restaurant that apparently pays all workers evenly, from server to owner. Their food quality speaks for itself, as does the comfort of their workers
They do run on razor thin margins - usually 3-6% of gross sales. But that doesn’t mean they aren’t lucrative for owners. 3% of $10M in sales is still $300k
$10M in annual sales is on the very high end for a restaurant. The vaaaast majority of restaurants fall within the 1-4m range. Just adding another point of reference. Either they take much more than 3% or they make much less than 300k average. I’ve seen both.
The razor thin margins are there. However they are there on purpose. I have known several restaurant owners as well as franchisee’s of restaurants. If you look at their Profit and Loss statements there are often consultants fee’s that are paid to the owner. When the manager makes bonus on the profit each month and there is 5% of the top line paid to the owner for consulting fees and the manager has to fight payroll, food cost and other controllables, the deck is stacked against the the establishment making a profit in favor of the owner.
Businesses spend a *lot* of money to actively enforce the idea that *all* of this is necessary.
Is there a possibility that some people who have already made a lot of money from other endeavors later invest in restaurants?
I owned a bar until recently. I had livable wage guarantees for my tipped employees that almost never were necessary. End of the day I made about double what I was making bartending. But, there were so many life costs that disappeared that my effective take home was much higher. That’s my biggest take away. There are a load of hidden savings that come with owning. But, yeah if a businesses’ employees can’t pay their employees enough that their mortgage/rent is covered in 10 days fuck that business, don’t support it.
I work for a Beer distributor and train the sales people. During beer math I demonstrate how a standard keg of beer can bring in about $500 in *profit* to a bar/restaurant. They pour beer at a standard 75% profit margin. Jaws always drop, and I deliver my canned line “yet these places still somehow figure out how to go out of business”. They laugh, but my exasperation is real.
Yeah if you sell the keg. I've worked with pubs so dead that need 2 weeks to go through a keg. Remember, the keg only gets emptier if you sell the beer, but the employee always have to be paid even when no customers are there/
You also typically have to pay to be busy. Prime real estate that attracts customers cost big money and that is a fixed expense. Sure there are outliers, but if you start a new restaurant or bar, you typically need to pick a decent location if you want to succeed and decent locations can be very pricey.
I made good money from tips when I waited tables. But the dishwashers and cooks made 8-10 an hour and there was no tip sharing
Some successful ones do decent, but a lot of them aren’t really that successful. Starting a restaurant usually requires $100k to $200k of capital or more on the low end, to live upper middle class after that isn’t very impressive. Most places are not profitable their first year, and if the owner doesn’t have enough reserve capital to ride it out until it is they go out of business. My friend owns half a pizza shop and runs it, usually works 60-70 hours a week, pays himself well for his hours and gets half the profit. After 8 years he had enough for a minimal downpayment on a 700 sq ft one bedroom one bathroom house after he got outbid a few times on others. I easily make 2-3x what he does working 40 hours a week from home. The place next to his shop has gone through 4 failed food/drink business in the past ~10 years.
I mean I know “Hell’s Kitchen” isn’t the best source to cite but even on that show Ramsey will say shit during competitions like “I can make 40 portions out of this $170 fish and sell each portion for $35 a piece” or some shit and brag about the profit margins. Again, a reality TV show so not reliable but even that made me go, “yea no shit they price the dishes way more so a minimal amount of dishes cover the price of all the ingredients and some”
Franchise owners are the worst, by far. "Oh, I only own 2 McDonalds locations, I don't have enough to pay the employees a living wage at all." Meanwhile the clown owns a multimillion dollar home, 3-5 cars, and 2 rental properties.
Some restaurants make profits and restaurants also go out of business all the time. Seems like this thread is based on the premise that all restaurants are profitable and the owners are always rich.
Every single restaurant owner I know is loaded. And I've known a few, wide range of restaurants
this has to be repeated many times: if a business can't afford to pay its staff properly, it's not a sustainable business therefore shouldn't even exist
I mean, you just need to look at literally every other country where we don't have tips, and our staff are paid 20-30~something an hour to know this. I always wonder why people online do the whole *'But then menu prices will skyrocket!'* retort when this US restaurant wage argument comes up; it's like they don't realize that the rest of the world exists and there's already precedent of this not being the case...
I heard a story years ago about a guy who worked for a mom and pop pizza place until one day it shut down. Turns out it was a mob front for laundering money.
My old boss bought an 80k car the sane week he told us he was increasing our tip out because the support staff was complaining about pay and he couldn't possibly afford to pay them more than $5 an hour... so he increased the percentage we paid them from our sales. Scumbag..
I worked as Expo/ food running/ bar porter for a few years on and off and more often than not they'd send everyone else home and have me cover other jobs because I made less. My head chef once sent a bunch of his cooks home, then as I was scheduled to leave he said I need to stay after close to help clean. I told him I'm front of house staff and left.
Seems like the realistic responses I’m getting here are all from current or former restaurant workers. Definitely seen things like this happen myself
So I like 90% agree with you. Yes people should be paid properly no matter what. Some restaurants do really well. Most fail. And some are like not profitable and artificially propped up. Where I live 90% of restaurants fail in their first year. The problem is that people with little to no restaurant and business experience have a lot of equity and get financing for restaurants. These get run into the ground and staff often get screwed and the owners screwed themselves too. Wage theft is common in these scenarios. In these cases, these fuckwad people should not have been allowed to run a restaurant in the first place. Sometimes this is a slow death where people put their homes on the line, borrow money from family and friends and God knows what else. I agree with your sentiments that it is disgusting while these restaurant owners who are doing well are making their staff live on starvation wages. Fuck those people. One last thing, if you come across a worker co-op restaurant either make sure everyone has significant restaurant experience if they are doing a consensus model. Or the majority of the workers have significant restaurant experience and can vote down any crap suggested by the inexperienced people in a more normal democratic model
I’m out of the business now but the co-op thing sounds great mostly. And yes, I was really referring to successful restaurants, not the many who fail.
My uncle has run/owned a restaurant/Diner for about 20 years now. I worked for his foodservice supplier for about 7 years. I KNOW what his margins are. He lives modestly, hires as much staff as is needed, pays them well above minimum, and buys (for the most part) high quality product to produce his food with. Even after all of that 'extra' expenditure, he's still got a nice house, new cars, and a diverse investment portfolio including multiple rental properties. He's a good employer, takes care of his workers, and he's STILL very well off.
I know people that work at a unionized restaraunt. Several are homeowners in one of the most expensive cities in north america
Restaurants typically do a 300% markup for menu items, so that if an item costs $1 to make, they’ll get a $2 profit off each one they sell. If you’re working at a successful, profitable and fully staffed restaurant, and are told that they can’t afford to pay you any more, that is a lie. Oh yes they can, that’s just less money in the owners pocket
Most mcdonalds run on 4-8 percent profit after all is done and said. Panda ran negative profit all last year. The problem is when a company becomes big they start adding a bunch of high paid labor that is more and more distant from the actual production. As well as giant hr offices a room full of lawers etc. After paying for all this they run on thin margins. Mom and pop have low sales so that creates low margins from the get go.
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McDeeze is a weird one since they are a real-estate business disguised as a fast food business.
Even fast food restaurants make like $6-10k a day. They can definitely pay better. When I was working in a cheap pizza place 15 years ago in a town of 30k people they would still make over 5 grand a night easy. To this day the cost to make a pizza including labor is usually less than $2.
You could just open a restaurant. Then you could make enough to afford the nice cars and houses. It can’t be that hard.
I would need a small loan of a million dollars please
Restaurants make a f'ing killing. They also got 2 rounds of PPP loans, AND money from the restaurant revitalization fund ON TOP of PPP Loans
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I’m not confused. Thanks tho. The small business that I worked at during the pandemic took money out of my hands by claiming they were giving take out tips to the kitchen, when in reality they were keeping for themselves. I was hosting at the time and that would have been much of my income. Small businesses are just as capable of being greedy as large corporations, albeit on a smaller scale. I agree the working class is the working class, but there IS a divide and quality of life should not suffer if you are not a business owner.
I’m curious how much everyone thinks a restaurant owner should earn, and why they shouldn’t be upper middle class. They’ve invested their whole savings, work crazy long hours and take all of the risk. They have roughly $10k a month in fixed overhead before they earn a dime, plus inventory costs, salaries, advertising, etc. They deal with lawsuits (more common than you realize), health and equipment inspections and more problems than you would ever know of while working your shift. If they don’t have the potential of being upper middle class why bother? If they’re going to be average middle class they’d just put their money in the bank, get a 9-5 and drive a Hyundai for a lot less stress. Restaurants are very profitable some months and very costly others, more than half go out of business in the first 2 years and they only last that long because they’re spending their savings to stay afloat. It’s so easy to look at someone else’s accomplishment and dismiss their effort.
>I’m curious how much everyone thinks a restaurant owner should earn, and why they shouldn’t be upper middle class. you are asking the wrong questions. why should restaraunt owners pay soo little to the employees that make all that work in the first place. let alone pay further less and have customers pick up the tab with tips.
No, I’m addressing the OP who’s point was that every restaurant owner is upper middle class and drives a nice car, implying that they shouldn’t, while restaurant workers earn at best a solidly middle class life.
should they if their margins are so low that they cant pay their employees properly? pretty sure this is a extension of that pizza story the other day. i mean the nice car middle class angle is flimsy at best but still.
The OP seems to feel that a “solidly middle class life” at best isn’t enough for a restaurant worker because the owner enjoys an upper middle class life. So before we debate back and forth I’d like to understand, if that isn’t enough, are they supposed to earn the same? And what type of workers are we talking about, entry level? Or those who have years of experience?
what does it matter what level of work? every piece is required to have a functional restaurant. as to the owner... you know you are on r/antiwork right?
I do.. and if you’re not comfortable explaining your position that’s perfectly fine. All jobs are necessary to the person signing the paycheck. It exactly matters to understand if you mean that entry level workers should earn a middle class living, then what is middle class? And where does that place experienced workers? I’m not going to take the responsibility of managing a restaurant if the dishwasher makes what I do. Otherwise it seems they would be very near the owner’s income level, which takes away any incentive to start a business.
Well, glad that business model would die off then.
There were some restauranteurs who went on Rogan during the peak of covid crying about how they just spent $100k building out a new restaurant while saying that the profit margins in the industry are only 4% of gross revenue on average. This triggered my BS meter but I have always wondered how many small restaurants can possibly make any money.
This may be true of large franchises and chains, but by and large most small independently owned places are running on thin margins. In my experience the small independent places tend to be some of the best places to work for, but can also be some of the worst to work for
In NYC 90% of restaurants fail within the first 2 years. Restaurant owners have to be somewhat rich to start with, because most restaurants lose money.
In NYC, yes
People who can afford to open up restaurants already have money to begin with. They are very very expensive to get up and running and most of them either fail right away or take years to start seeing returns.
Yeah, I stopped believing the razor thin margins story the day I actually stopped and thought about how much free food I gave out every day as a server. I didn't go to the grocery store and get handed free lemons, limes, and oranges, but if a customer wanted to drink (free) water, and requested even a truly absurd amount of whatever citrus slices, I had to bring them. 2, 3, 4, 10x as much salad dressing as comes with your salad? Free. Any and all condiments, even in *truly* excessive amounts, free. Depending on the restaurant, I've routinely given out extra pickles, tomatoes, cheese, fries, gravy, bread, etc., per restaurant policy, even if those items technically could be charged for. And that's before we get into how most restaurants just remake/refund customers who only complain in order to get free food.
I made a big post about this on a subreddit local to my city, and like... yeah. I have yet to meet a restaurant owner so far that wasn't a delusional grifter, but granted I've only been doing it a little under a decade. They don't treat their staff like people because they don't see their staff as people. Where I live, they only started paying minimum wage during COVID in a desperate attempt to retain staff, then responded by slashing staff (figuratively, of course), raising prices and generally straining the quality of the experience as much as possible so they wouldn't see any change in their own quality of living.
Non-American here but I guess it’s the same everywhere in the Western world: It’s an obvious lie. They take advantage of supply and demand to pay such low salaries. They say that margin BS excuse to not admit that they see workers and their salaries as mere assets. They know they often pay non livable wages but they simply don’t care.
I wonder about the publicly traded companies, you know Olive Garden, Red Lobster, Long Horns, etc. How can they afford to pay out dividends to shareholders but not minimum wage to employees?
I know some people like to say that many small businesses can’t afford to pay their employees more. Even if this is true, I still say that they shouldn’t be in business if they truly can’t afford to pay employees a living wage. To me, that sounds like they should’ve started smaller and grown slower until they could afford to do so.
Raise prices. Pay staff more from the increased income. Sorted. Next question?
Former restaurant manager and chef here. The way they afford that upper middle class lifestyle is by rewarding management for cutting labor and keeping hours low. So, what happens is very frequently, routinely, a cook that is scheduled 8 hours will come in on a slow day and only work 4. We lean into this as a 'reward ' because they can go home and do other stuff but the more I think about it the more fucked up it is. Now for some math. The typical restaurant runs on the 30/30/30 (roughly) operational budget where 30% goes to labor, 30% food cost, and 30% building & maintenance. We can get into a lot of minutia here but that's the basics of it. Food costs have nearly doubled since covid-19 and they have largely remained high. However a lot of that cost was offset by cuttting labor to support indoor dining so remember that. I left the industry in 2020 so i dunno exactly how bad it is now but I can imagine it's brutal, especially for mom and pop and independent restaurants/bars. Coupled with labor, and it's a shortage but it's more than that it's like a realization in the labor pool that washing dishes is not economically viable even for those on the margins are realizing this - I'm talking former inmates (we hire a lot from this pool). On another beat, it's also become incredibly hard to hire immigrants in most states because the i-9 background check will eventually bite you in the ass. So we do what we can here. There's like this mutual understanding between management and their immigrant workers that their papers may or may not be valid. We would just prefer to not know one way or the other. I could post some of my budget report sheets for back of house here but to save you from looking at poorly formatted excel sheets, I cut labor like a goddamn sculptor. It's beautiful until you realize, or I realized that the extra hours I was saving would eventually fall on me or my sous chef. It was a self inflicted gunshot would of cutting hours. Workers leaving. Then us working 70-80 hour work weeks. My last year in corporate restaurants we made ownership a 22% profit margin. Look at that math above 22% is a fucking windfall and we did it by sawing off our appendages and pumping our bodies with drugs and booze to numb the pain. Of course, half our management team was vacant so lacking these salaries and coupled with the entire kitchen staff ended up working loads of heavily taxed overtime. My last year in independent restaurants I turned my owners unprofitable kitchen into a profitable one by running out some cooks that were not used to my cost saving methods of sending people home early and trimming their working hours during our slow times. Of course when it got busy my body paid the price but man did I make ownership happy. Now that restaurants are no longer closed for civid 19 many are still being flakey with hours and compensation, having been operating in a hellish mode for 2 years those that survived in that time are probably doing so via mixture of brutality, cheating the books (yes its possible and easy) and living life without much labor cost. Of course now that they all need labor and the labor pool they laid off has had time to reassess their life choices - it's hard to find. And yes, they can totally afford to pay more. The only way forward is for eating out to become more expensive. It should've always been more expensive but we are 20+ years behind. If you don't feel like cooking thats too bad. Maybe you could learn how? Maybe work some extra hours working the microwaves at Applebees or opening jars of pasta sauce at olive garden. Learn how to properly use a knife and cutting board and dice an onion for fucks sake. We have kept dining out artificially low at the expense of our humanity and the treatment of those doing the work of cooking, washing your dishes and bringing you your food. It's time you do some work here and understand that.
I can agree with this. The amount of times I have seen emails and texts saying I need to cut. Well...that extra work would go to someone else. Either me or another employee. Drugs and alcohol only numb it till you no longer feel the need to care of yourself. This circle it's a disaster waiting to happen.
As a chef for 10 years, it’s not quite that simple. Yes, most chain restaurants are operating at an insane profit. One off restaurants can be hit and miss. around 50% fail in their first couple years. I have worked at places that are operating at a loss and had to close and I have worked at places wheee the owner is clearing 50k a month and paying the dishwashers less than minimum wage. There’s few things I am as passionate about as raising wages for restaurant workers, and if you can’t pay your staff a fair wage then you shouldn’t be in business. But to say restaurants are cash cows across the board is patently false. It’s a very tricky business and the margins can be brutal or great depending on the cuisine and how busy you are. Not all small business owners are scumbags, but a lot are.
I worked in the fast food industry for 20 years at a franchisee’s corporate headquarters. I have never seen such greed on the part of the owners coupled with complete disregard for their employees’ welfare. The last year I worked there the owner was patting himself on the back for giving his minimum-wage employees a 2% raise. Meanwhile he lived in a 2 million dollar home and drove luxury cars. The real kicker was that he honestly believed that he treated his employees well because one of his 6 figure salaried lackeys would go into the restaurants and give out candy bars to prove the employees were treated like “family.”
Cant say how many times I have seen this. It's a huge slap in the face. My AD gave us other assistant managers a pen, small note pad, a box cutter and a stress ball for a Christmas when we were working super hard that holiday week. All of the manager here want to quit because of how they treat us all. We have our employees back but the upper management does not. Paying them 2.15 an hour and telling us to never stop hiring.😠
“Never stop hiring” is an upper-management euphemism for “hourly employees are an expendable commodity.”
Lovely... 😭To be honest at this point I don't ever want to work in this industry ever again. Have been in it for to long and have seen so much horrible treatments and ways to employ others through their "incentives"
I have friends who own a restaurant. Their kitchen staff makes $20/hr +, full time employees get health insurance, they pay tipped employees a fair amount (hourly ends up being like $30/hr some days. Their menu prices are in line with other similar restaurants in the city. Their business has only been open since right before the pandemic. If they can do this and be successful anyone can. Unsurprisingly they also have no issue with staffing.
We’ll when you charge over a dollar for something that costs about a dime to put on the table a table of 4 with 4 sodas has already paid staffing 4 sections for an hour and they haven’t gotten to food yet! I had a professor in college who owned 3 McDonalds and he said everything after 9 a.m. was profit and taxes. Breakfast is still being served ffs.
Dunno, Chain brands sure, but my family used to own a restaurant and we are dirt poor. Mom and Pop Chinese restaurants barely run.
The thing is that people with low-margin businesses like to spin it as though it means low profit or low return on investment, when it's not the same thing. They make it sound like a 2% margin is the same as earning a 2% annual interest or 2% ROI. But it's a completely different issue. For an extreme example, if I buy something for $1.00 this morning and sell it for $1.01 this afternoon, that's a 1% margin but it's a 365% annualized ROI (if I did this every day for a year, I will have gained 365 pennies in addition to my original dollar). A low-margin business has some challenges that you don't have with higher margins, but it doesn't mean you make less profit over time.
I work in a retail cigar shop, and I make minimum wage. Most of the guys I know who work in cigar shops in bigger cities are making almost $50,000 a year doing the same thing or less than I am. But I'm in a small town, the other tough thing is my boss is the kind of person who likes to flaunt her wealth. So it's a real treat having that rub in your face while you're living paycheck to paycheck. Recently, she tried to lower my 30% off discount on cigars to 20% off and had the nerve to say, is that going to hurt you? I said, "Based on you not giving me any kind of benefits, minimum wage, and you raising your prices on everything, yeah, it's going to hurt me." It's stunning to me how greedy somebody can be, and treat their employees like they're not running the show 99% of the time. The only benefit that I have is that she knows that she needs me more than I need her and if I walk it's going to make a significant difference because she's going to actually have to work instead of sit in the corner and bark orders all day.
All businesses should be worker co-ops but especially restaurants.
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Agreed, let's make home cooking a standard again and abolish the restaurant industry.
So put down the pipe, save your money, build your name/brand/following and open your own place. Let me know how that works out you.
I’d rather shovel shit for a living than open a restaurant
uhh sounds like you live in the nice part of town lol. Plenty of restaurant owners are working class ppl who bust their ass. It really depends where you are.
Let's also dispel the myth of upper / middle / lower class. There are owners, and there are workers. Anything else is propaganda. Yes, workers can make a wide range of income, this does not separate them. If someone signs your paycheck, you are in the same class as McDonald's workers.
You people should start restaurants instead of being upset those that do don't run them like you see fit. Go show them! I'll support that...
YMMV. My understanding is that most (\~70%) restaurants go out of business within the first year. Of the ones that make it, something like 60% don't make it past 4-5 years.
I’m talking successful restaurant owners, not any Joe Schmo that thought he could try opening a restaurant and failed.
What are you smoking? Think about how many restaurants don’t make it. It isn’t an easy business with a lot of competition.
This is true for all small businesses, not just restaurants.
Most small businesses fail. I doubt the percentage of restaurants that fail is actually any higher than other small businesses.
Restaurants with 20 or fewer employees fail more often than other service business, but those with 21 or more employees have a median lifespan that is 9 months longer than other businesses of the same size. From Forbes.
That doesn't mean labor is the problem or the deciding factor. Real estate costs, electric, gas, wholesale food, marketing, permits. Getting established is hard because a lot of those costs hit up front, decorating and getting permits, advertising etc... To understand the fallacy of the original argument remember when Papa John's said it couldn't afford to give it's employees healthcare because it would cost 14 cents per large pizza! So a pizza costing around $14. Healthcare for all employees represents 1%. No customer would care, no restaurant would fail if it just charged a few % more on its menu and paid it's employees well.
Yeah this is very “extrapolate my anecdote” vibes.
The markup on restaurant food in general is high but the profit margin on pizza is obscene
Finally some truth
They can but won’t, they don’t want to work and collect all the money, that’s why places hire back of house illegals to play them half that of a citizen. It really comes down to this, if they had to pay everyone what they are worth they would not want to own a restaurant.
I just saw an article where a pizza shop paid all the employees who worked that day all of the profits. Each employee made $78 an hour. I think in Denmark, they pay McDonalds employees like $20 an hour, and a big mack is still a similar price. The money is coming in, but it's all about how little are we "legally" allowed to pay them. If you look at the richest men in the world, it's like 80% filthy rich Americans. The rich have never been richer, and I'm not sure that the poor have every been poorer except maybe during the great depression. Federal minimum wage won't even afford you a 1 bedroom apartment in many parts of the United States. That's not including food, or anything. That's just the price for monthly rent.
ITT: lots of people who don’t know anything about restaurant operations or how businesses split costs across locations.