Restaurants Cut Back on Staff to Keep Down Costs, but Who is it Really Hurting?

Caught between rising food costs and cost-conscious customers who are reassessing their spending habits, restaurants are cutting corners in an effort to save money. With the soaring cost of labor, rent, utilities and a perishable inventory balanced with a dwindling customer base, it's not surprising that according to recent studies, three out of five new restaurants will close their doors within the first three years of being in business.

In order to stay in business, many restaurants are searching for ways to keep their costs down. For most restaurants cutting costs begins with its employees, mainly the serving staff. Waiters and waitresses are finding their hours being slashed and their benefits disappearing. These measures save restaurants money in the short term but in the end, it will be the restaurant customer who ends up getting stuck with bill for these cost-cutting measures.

The general public often assumes that waiters and waitresses earn a living wage that is supplemented by the tips they receive from diners. Many people also assume that restaurant workers receive the same benefits that workers in other industries such as health insurance and paid sick days.

The national minimum wage for restaurant employees is only $2.13 an hour and the majority receives limited or no health insurance through their employer. The low base pay makes obtaining health insurance cost prohibitive for workers who must rely on the fluctuating nature of tipping to earn a living. Paid sick days are almost unheard of in an industry where, according to the National Restaurant Association, the average workweek has declined to only 25.2 hours a week.

The lack of health insurance among restaurant wait staff means that many employees delay or put off getting treatment when ill. The lack of paid sick days forces many servers to come in to work even when they are ill. This greatly increases the risk of transmitting food borne illnesses to customers. Food borne illnesses easily passed through the handling of food and some, such as E. coli, salmonella, Listeriosis and Hepatitis A, are not only serious but sometimes deadly.

As restaurants strive to maintain a healthy profit margin in these tough economic times, the first thing that is being trimmed is the quality of service. Good workers forced to work fewer hours for substandard wages and benefits will find it hard to stay in a profession that is as physically demanding as waiting tables.

In the end, it's the customers who will feel the effects of these cost-cutting measures. As quality wait staff moves on to professions that offer them a higher standard of living service levels in many restaurants will drop significantly.

National Restaurant Association