So You Want To Be A Waiter

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Responding to post from Waiter Extraordinaire

http://waiterextraordinaire.blogspot.com/2009/10/gimme-break.html

“A fellow waiter and I were talking today about the waiting life. When I started bringing up the low hourly wage a lot of waiters made in the United States he brought up a very good point.

When I mentioned the fact that waiters down South seem to accept the fact that they get paid peanuts so that their employers do not have to add more to the price of an item on the menu to cover their labour costs and risk customers fleeing elsewhere to eat , this is what he said. Let’s say all the wages went up to $8 an hour and the cost of the meal went up proportionately on the menu , everyone is still going to go out and eat. Everyone will pay the added amount to a menu item to cover the cost to get fed. It is not like people are all of a sudden going to boycott eating out.

Well that makes perfect sense! Think about it. Cars cost $30,000 today but in the 60’s they were $5,000. We didn’t stop buying cars because there was an increase in price did we? We wouldn’t cancel our phone cause the price went up to cover inflation would we?

Yet the employees who work for these and other companies are making a lot more than 40 years ago. Do you see what I am saying and what my friend accurately pointed out?

Why if you are a waiter should be so concerned anyway about labour costs? What about making a living? In my opinion and this may seem a bit rude but your employer if they are holding that over your head and giving you labour costs and I cannot pay you more than $2-4 dollars an hour stories well that my friends is bullshit and they are just being freaking greedy by brainwashing you.

Maybe what they really should be thinking about is guaranteeing that some employees will think about staying long term and putting a plate in front of the guest that is value driven and not cost conscious.

What has to happen is for everyone in that region to raise the wage for servers and bartenders. Pass the cost onto the consumer who will pay for anything cause we all know they do anyway from cars , houses , boats , toys etc. and then and only then will they walk into a restaurant and see a server that was there the last time they ate there. That is a happy waiter or bartender.

Here I notice that no matter what the price of the menu item is I still get tipped the same. If an item costs $40 or $80 I make the same percentage plus I get a paycheque that is worth something every two weeks and believe me the money comes in handy. At $2 an hour as some places a server earns in the States , even if I worked 40 hours a week I would still make less than half what I do now on my paycheque working half that amount.

I am sorry but the States is the last G7 country to have workers put up with that bullshit. Some people may not like what I am saying here but you all have to do something and get the government on your side. The States is not a third world country but people making $2.13 an hour is absurd!

No security , no benefits , no pension , no respect from your employer , no life , fuck all ! All for the privilege of working for 2 -4 dollars an hour. And hope for the best that you make anything after making sure you tip out everyone and pay your taxes on time through your employer.

Gimme A Break!!”

I’ll start by separating a couple of issues out. Pensions and benefits being few and far between is a peculiarly American thing. It’s common to all service jobs and is starting to leak into other professions as well, so it isn’t just a restaurant thing.

I’ll also lead with the downside of a small wage that isn’t obvious – we don’t get enough tax withholding to avoid owing the IRS at the end of the year unless we pay into our tax account out of pocket throughout the year.

However, the issue of the low wage is more complicated than just “I only get 2.13 an hour”. In states that require $8 an hour (California, Oregon and Washington State), the cost of living is much higher than states like mine that only pay 2.13 an hour. Care to guess what a major driver of those costs are? The higher pay, of course (and the 10% higher menu costs, of course). While I might not make as much “raw” income as my brethren in California, I don’t have to. For me to make what I’m making here, I’d have to make over $70,000 a year in Seattle and I *still* wouldn’t be able to afford a house. You can’t touch anything for $200,000 on the West Coast and that’s for the smallest bungalow. For half that, I can buy a very nice 1/4 acre 3/4 bedroom house in a decent neighborhood. hell, I paid $50,000 for my very modest urban house 8 years ago. I know a GM that’s moving out an area between LA and San Diego and he’s going to be pulling in $200,000 a year )he was making far less than that here). The problem is, he’s going to have to spend $500,000 to get something equivalent to the $250,000 house that he’s leaving behind.

People in the states are price sensitive. Sure they’ll still go out to eat. But they won’t go out quite as frequently or spend quite as much. So, I’m not sure if it wouldn’t be somewhat of a wash in terms of my earning power. I know that our restaurant is doing better through the recession than our LA restaurant. Part of this could be the pressure of the higher menu costs. Perhaps people just aren’t spending as much money.

I average about CDN 28 an hour (including lunch AND dinner – I have 2 lunch shifts a week but I obviously don’t average that during those shifts so, if I worked only dinner, it would be higher). That’s with my 2.13 an hour. Obviously, I’m like you in that I work in a high end sort of place. I suspect that the average Canadian waiter makes about what the average US waiter makes – somewhere around CND 17 or so. In following your recent posts about what you were making shift by shift, I noticed that you were making a little less in general than I do from tips (and lower percentages as well). I think that when you add in the hourly, we are actually pretty close. Last year during the worst recession ever, I made around CND 38,000 (the year prior, it was CND 43,300). These are modest figures of course when compared to what waiters in Manhattan or LA might make, but then again, I don’t have to pay $1500/mo for a tiny loft apartment in SoHo either.

It’s just like when you walk with $60 on some slow night. You have to take the long view. Is that a reason for switching restaurants because you can make more there? Of course not. You have to look at your total earnings. Fixating on the hourly wage is being short-sighted. My true wage comes from the guest. Would I like to make more hourly? Sure, but not if it drives up the cost of living more than what the increase would give me.

There’s another advantage to the low wage paradigm. It allows more people to get into the restaurant business. While there’s a lot of fallout (60% of all American restaurants close after 5 years), it at least gives a lot of opportunity for jobs and a diversity of restaurants (I suspect that we have the most diverse restaurant scene in all of the G7). Let’s not forget that, at least in the US, the average restaurant net profit is somewhere around 6%. Those are pretty slim margins. By being able to pay less than minimum wage, it allows the smaller operator to compete with deep pocket conglomerates by limiting payroll during the early critical years. Some might argue that this might be good for the industry considering the failure rate of restaurants, but I’d argue that it encourages vibrancy in the restaurant community and more choice for the consumer.

I might expand on this later, but right now, I have to get ready for my Monday lunch shift. Time has suddenly gotten very tight.

BTW, I only work about 30 hours a week and I don’t work Fridays, so my income could be a lot higher if I traded a Friday night for a shift during the week as well as working one more shift a week. Plus, I’m also off Thursdays, which is a good dinner shift in our restaurant, especially during hockey season.  I noticed that you said you work half of 40 hours. Does this mean that you only work 20 hours a week?

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3 responses to “Responding to post from Waiter Extraordinaire

  1. waiterextraordinaire October 12, 2009 at 10:04 am

    I am up to 5 nights a week. My last cheque was for 47 hours over two weeks. People I believe will still go out and eat if you have a good product. I don’t think for example where you work it would affect your business since you are high end. People have the money. Everyone is price sensitive but a couple bucks more on your entree isn’t going to send them running out the door in my opinion.As for the opportunity for everyone to open their own restaurant I prefer lesser restaurants myself. In my town there has to be 100’s of restaurants to choose from for 26,000 people. Very few do well. Slim margins. Which is why few people should open up a restaurant anyway. But it is the easiest thing to do I guess so I see many open one thinking they are going to make it and they have no idea how to operate one.
    I doubt anyone who is only a waiter in California has a house anyway at those prices or that hourly wage. Where I live I couldn’t afford to live in Toronto or even closer 20 minutes away based on the cost of a house. The GM you mentioned that is going to be making 200 a year is probably an exception is he? Here he would be that is for sure.
    Everything is relative I guess but let’s say I worked where I live right now. I couldn’t afford this townhouse. We are at the cusp. The town just north of me has 500 population. I gotta head out of town to make some money. So income here is not geared to the cost of things like where you are. But really I know we work for gratuities but saying people are that price sensitive and will not come to a restaurant if an entree goes up a couple of dollars to give an employee some extra to tide you over a slow night. I beg to differ. Prices are going up all the time everywhere else. Is the cost of your phone relative to other states or is it cheaper to phone where you are cause the price of a house is cheaper? What about a price of a car? Gas? This is long winded and sorry for the long reply. But keeping your wage low has nothing to do with keeping inflation low. In fact more money in your pocket perhaps will help the economy and you will spend more. I guess I can go on and on………

    • teleburst October 12, 2009 at 1:52 pm

      Studies have been done that show conclusively that people are more sensitive to higher menu prices than lower menu prices plus tips, even if they end up being exactly the same. People perceived the first case as being “more expensive” and I can tell you that it would definitely affect business (at least short term) if menu prices went up 10% across the board.

      My income took at 15% hit from ’07 to ’08 (this year, I think I’m going to recover a couple of percent). Some of the high end steakhouses are down 25% from the previous year (we’re only down around 13 – 15%. The high end houses are all bringing in some lower cost menu items to keep butts in seats.

      I’m surprised to hear you say that you’re in favor of *fewer* employment opportunities for waiters. I certainly don’t think so.

      As for the GM that I know, his salary on the coast will be somewhat normal for a $10,000,000-plus store. It would be unheard of in this market.

      In the states, it’s not easy at all to open a restaurant (even before the economic crisis). Banks won’t touch you, it’s tough to get a small business loan – most people have to do it with private investors. Doesn’t stop them from trying though .

      Your comment about California and waiters not owning houses points out that it’s not about the hourly wage per se. I’m making more, relatively speaking from a standard of living viewpoint, than my fellow server in California. There are four servers at my restaurant (they’ve been there since opening)that own 11 houses between the three of them (obviously, they landlord in their spare time). There are at least three servers that make over US $50k year after year.

      This isn’t bragging sort of stuff – it’s just pointing out the economics of the restaurant system in the US. The hourly wage is somewhat self-correcting and floating depending on the economics of the area. I’ve never made less than $28k, even when I was working at $20 a head churn and burn places. I suspect that paying a much higher wage would be a deterrent to optimum wages because it would mean fewer job opportunities, slower traffic and smaller checks in the long run (skipping the second glass of wine, no appetizer, no dessert, etc.) It’s especially true right now in these scary economic times.

      Don’t worry about the length of your reply. Mine was much longer, which is why I posted it here instead of in the comments section of your blog.

      PS, we wouldn’t just be able to rasie things “a couple of bucks”. We’d have to go at least 10% (like our California store) and 10% on a $200 check is $20 (not insignificant). A $50 steak becomes a $55 steak. And this would be on top of the small “buck here and buck there” increases that we have to sneak in from time to time.

  2. Pingback: Responding to post from Waiter Extraordinaire | Bartender Empoyment

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