Let’s face it: minimum wage just doesn’t cut it today.
The minimum wage for workers has remained at $7.25/hour since 2009. Since then, inflation has risen over 38.35%. This translates to $0.38, or $1 in 2009 being equivalent to $1.38 in 2022. In this time, the average national cost of living rose 20%.
Workers making minimum wage may be able to afford basic necessities, but often struggle to cover other bills and unexpected expenses. This lifestyle makes for little flexibility, burnout, and high employee turnover.
On the other hand, companies that pay their employees a decent wage see high levels of productivity and lower turnover rates. While this is an expense upfront, companies ultimately save money by attracting and hiring quality employees for the future.
As a restaurant owner or manager, it can be difficult to find the balance between paying workers a livable wage and turning a profit. We’ll discuss the average pay for restaurant employees, tips to use when deciding what to pay your workers, and why a livable wage is so important.
What Is the Livable Wage for Restaurant Workers?
A livable wage is a socially acceptable level of income that provides coverage for basic necessities such as adequate food, shelter, child services, and healthcare. The goal of a livable wage is to allow workers to earn enough income for a satisfactory standard of living and prevent them from falling into poverty.
The livable wage model is an alternative measure of basic needs. It is a market-based approach that includes geographically specific data related to a family’s likely minimum food, childcare, health insurance, housing, transportation, and other basic necessities costs.
A study from MIT shares the livable wage draws on these cost elements and the rough effects of income and payroll taxes to determine the minimum employment earnings necessary to meet a family’s basic needs while also maintaining self-sufficiency. The calculated livable wage does not provide a financial means to enable savings and investment or for the purchase of capital assets (e.g., provisions for retirement or home purchases).
The livable wage also changes based on the number of dependents one has, increasing with each additional dependent. This makes the livable wage more dynamic than the traditional minimum wage.
The living wage calculator is composed of the wage needed to cover basic family expenses on a basic needs budget, plus all relevant taxes. Values are reported in 2022 dollars, and to convert values from annual to hourly, a work-year of 2,080 hours (40 hours per week for 52 weeks) per adult is assumed. The basic needs budget and living wage are calculated as follows:
Basic needs budget = food cost + childcare cost + (insurance premiums + out
of pocket health care costs) + housing cost + transportation cost + other
necessities cost + civic engagement + broadband
Living wage = Basic needs budget + (basic needs budget*tax rate)
Average Pay for Restaurant Employees in the U.S.
So how do restaurants pay their employees? Are they paying their workers livable wages? Unfortunately, in many instances, the answer is no. Let’s take a closer look at the average pay for restaurant employees by position below. From restaurant server salaries to dishwashers and bartenders, we cover them all.
Restaurant Position: Server
Avg. Yearly Salary: $24,558
Avg. Hourly Wage: $11.81
Restaurant Position: Host/Hostess
Avg. Yearly Salary: $26,207
Avg. Hourly Wage: $12.60
Restaurant Position: Bartender
Avg. Yearly Salary: $26,362
Avg. Hourly Wage: $12.67
Restaurant Position: Dishwasher
Avg. Yearly Salary: $29,860
Avg. Hourly Wage: $14.36
Restaurant Position: Line Cook
Avg. Yearly Salary: $32,894
Avg. Hourly Wage: $15.81
Restaurant Position: Chef
Avg. Yearly Salary: $46,824
Avg. Hourly Wage: $22.51
Restaurant Position: Food Runner
Avg. Yearly Salary: $25,536
Avg. Hourly Wage: $12.28
When thinking about the average pay for restaurant employees, you should consider that the average is made up of both the lowest and highest wages. So in many cases, restaurants are paying their staff less than the listed average. It may depend on the state regulations (if any) and the owner or manager’s personal opinion.
Why the Minimum Wage Is a Problem in the Restaurant Industry
The living wage is often suggested to be $16.54 per hour, or $68,808 per year for a family of four (two working adults, two children), which is significantly higher than the legally mandated minimum wage. Rent and daily expenses are much higher in urban cities than in rural areas, and poverty thresholds do not account for geographic variation in the cost of essential household expenses. This is one of the many flaws of the current minimum wage calculation.
Additionally, poverty thresholds do not account for livable costs beyond a very basic food budget. The federal poverty measure does not take into consideration costs like childcare and healthcare that not only draw from one’s income but also are determining factors in one’s ability to work and endure the potential hardships of everyday life.
Many individuals earning the federal minimum wage live below the poverty line.
The federal minimum wage, which is $7.25, has not gone up since 2009 and has not kept up with the cost of living since the 1960s. There are state minimum wages in some states, and some are higher than the federal amount. The minimum wage does not provide enough income to survive as it doesn’t rise with inflation; it can only increase with congressional action.
If you are a restaurant owner, you can choose to make a change and pay your workers livable wages.
How Much Should I Pay My Restaurant Staff?
The big question is, “How much should I pay my restaurant workers?” While we cannot give you a definitive answer, here are some helpful tips and things to consider.
- Be competitive. Offer well above the minimum wage to ensure you are paying your workers a livable wage. Stay competitive with other restaurants around you by monitoring what they are paying their workers.
- Consider hourly vs. salaried workers. Consider which positions are paid on an hourly basis and which are salaried. Salaried workers typically have more management responsibilities such as chefs, managers, assistant managers, etc.
- Think about tipped workers. Consider which positions will receive a fair amount of tips when deciding how much to pay workers. You are required to pay tipped workers a minimum of $2.13 per hour plus the difference to reach $7.25 per hour if tips don’t cover it.
- Consider experience. If you have a server or assistant manager who has been working for you for years without a raise, consider the expertise they bring to the table. Compensate them fairly for their experience. Not all restaurant server salaries should be exactly the same.
- Think about the local livable wage. The standard price of living will change depending on the geographic location.
As you can see, there are many different factors to consider when determining how much to pay your restaurant staff.
Qwick Helps Hospitality Businesses Thrive
We understand that staffing can be tough. That’s why we created Qwick, a professional platform tailor-made for the hospitality industry. Simply create a free account, post a shift (or 100), and we’ll match you with the best talent for the job. Use Qwick to staff ahead for big events, or when you’re in a pinch and need a last-minute shift cover.
How Qwick Pays Restaurant Professionals Differently
It’s vital for businesses to be aware of the cost of living in their area and the livable wage. This can be a guide for paying fair wages not just to employees, but offering fair wages to freelancers as well.
We understand how detrimental the wage crisis is to the workforce, and that the hospitality industry needs to make a change. We’ve made a commitment to our freelancers so they never have to worry if they will be paid more than minimum wage, if the shifts they work will actually make a dent in their bills, or if their time is valued.
At Qwick, we advocate for living wages for all hospitality professionals. See how living wages (calculated for for one adult with no children) stack up against state minimums in 2022:
- Living wage in Atlanta: $18.37
- Minimum wage in Atlanta: $7.25
- Living wage in Austin: $17.46
- Minimum wage in Austin: $7.25
- Living wage in Baltimore: $17.54
- Minimum wage in Baltimore: $12.50
- Living wage in Charlotte: $17.70
- Minimum wage in Charlotte: $7.25
- Living wage in Chicago: $18.42
- Minimum wage in Chicago: $12.00
- Living wage in Cleveland: $15.30
- Minimum wage in Cleveland: $9.30
- Living wage in Dallas: $17.03
- Minimum wage in Dallas: $7.25
- Living wage in Denver: $19.62
- Minimum wage in Denver: $12.56
- Living wage in Houston: $16.39
- Minimum wage in Houston: $7.25
- Living wage in Jacksonville: $15.51
- Minimum wage in Jacksonville: $10.00
- Living wage in Los Angeles: $21.62
- Minimum wage in Los Angeles: $15.00
- Living wage in Miami: $17.51
- Minimum wage in Miami: $10.00
- Living wage in Nashville: $16.98
- Minimum wage in Nashville: $7.25
- Living wage in New York: $22.71
- Minimum wage in New York: $15.00
- Living wage in Orlando: $15.44
- Minimum wage in Orlando: $10.00
- Living wage in Philadelphia: $17.36
- Minimum wage in Philadelphia: $7.25
- Living wage in Phoenix: $17.55
- Minimum wage in Phoenix: $12.80
- Living wage in Pittsburgh: $16.02
- Minimum wage in Pittsburgh: $7.25
- Living wage in San Antonio: $15.43
- Minimum wage in San Antonio: $7.25
- Living wage in San Diego: $22.74
- Minimum wage in San Diego: $15.00
- Living wage in San Francisco: $25.55
- Minimum wage in San Francisco: $15.00
- Living wage in Tampa Bay: $17.17
- Minimum wage in Tampa Bay: $10
- Living wage in Washington DC: $22.07
- Minimum wage in Washington DC: $15.20
Qwick doesn’t set the pay for shifts posted on our platform. Rather, businesses select the wages and we coach them on acceptable livable wages for the shifts they are looking to fill. From there, Qwick freelancers choose which shifts to accept and are paid out as soon as 30 minutes post-shift! The days of waiting two weeks for a paycheck are gone.
Why a Livable Wage Is Needed in the U.S.
Paying a livable wage creates an economy that works for everyone. Livable wages lead to increased worker morale, worker health, and improved quality of service. They also attract talent, lower turnover rates, and save money long-term for employers. Consider paying employees and workers a living wage as a means to show you care for their well-being.
Having a hard time finding workers during a labor shortage? Use Qwick to fill open shifts at your restaurant instead of struggling to hire full-time workers. Create an account today and experience the new way the hospitality industry works.