How Minimum Wage Affects Restaurants

The minimum wage has been a hot topic in politics in recent years, with some pushing for doubling the minimum wage against increased costs of living, while others argue that there should be no minimum wage at all. As with any debate, it's important to have some facts about how changes could affect our field. Fortunately, some studies have already been conducted.

Effects on Restaurants

A recent study by Harvard Business School reports that minimum wage increases can, in fact, drive restaurants out of business. "[A] $1 increase in the minimum wage leads to approximately a 4 to 10 percent increase in the likelihood of exit" (that is, a 4-10% higher chance that restaurants close.) Forbes, which also reported on the study, points out that lower rated restaurants carry most of this burden. Five-star rated restaurants were almost unaffected by the increase, regardless of the price level of the business.

Effects for Waitstaff

A survey was recently conducted by Upserve to get some insight on how increases impact the take-home income of servers. 73% of their respondents reported that their real income, (wages plus tips) "has not increased since wage went up." While 24% reported that their average tip has decreased. This points out the major misconception among diners that servers receive the minimum wage, which as many of you know is not necessarily true. The wages of "tipped workers" are often unaffected by changes to the minimum wage. Customers, however, may be likely to tip less if they think you've recently gotten a boost in income. 

WaiterWallet was developed to help servers sell more, improving income for both the restaurant and the waitstaff. Contact us.

Leave a comment

Please note, comments must be approved before they are published

★★★★★ Reviews

Let customers speak for us

514 reviews
How many servers work at your restaurant? : 10 to 20
Above and beyond

I placed my order on a Friday morning and paid for next day shipping. The system did not recognize that it would be almost double the cost for next day to be delivered Saturday, so John gave me a call to let me know that because I was pretty close to Boulder where they are located that he would personally deliver my Waiter Wallet on Saturday so there wouldn't have to be any additional shipping charges. Fantastic customer service.

As far as the wallet? This is my first serving gig and it has made the learning curve way easier to manage. The clear pocket is great, I've got menu ingredients, and a few key talking points on there. The quality is very nice so I'm sure this will last me for years to come.

How many servers work at your restaurant? : + 20
Give a girl a break

I love your products, however, I feel you should give her a break to people to keep ordering from you

How many servers work at your restaurant? : + 20

Works wonderfully for my needs! Couldn't be happier.

How many servers work at your restaurant? : + 20

Waiter Wallet Jr. Deluxe

How many servers work at your restaurant? : + 20

Waiter Wallet Sr.