Raleigh's restaurant pay falls after COVID peak, still higher than average
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Raleigh metro restaurant workers are seeing bigger-than-average paychecks ahead of the holidays, but their wage growth has overall declined since a post-pandemic peak.
Driving the news: Wage growth for the local industry was at 7.8% in October, down from a peak of 13.4% in November 2021.
- The data comes by way of Square's new third quarter restaurant industry report, and includes base wages, tips and overtime.
Why it matters: The overall slowdown is a sign that restaurants are no longer quite as desperate for workers as they were during the late pandemic era, when many struggled to replace employees who had left for other industries.
- It's also a reflection of inflation's impact on restaurants and consumers alike.
What's happening: Restaurant costs are up in part due to inflation, and consumers are often loath to pay higher prices, because they're also getting hit with higher costs on basically everything in life.
- Discretionary spending on dining out is often the first thing to go when times get a little tougher.
Plus: Tips may be shrinking, especially amid a growing sense of "tipping fatigue."
- While tips grew during and after the pandemic as customers rallied around front-line workers, many have grown weary of doing so, including in Raleigh.
- A slowdown of tips and wages is especially painful for "tipped employees," like servers, who have a state minimum wage of just $2.13 before gratuity. (The minimum wage for everyone else is $7.25).
The big picture: Nationally, restaurant workers' wage growth has also slipped considerably since the height of the COVID-19 pandemic, falling below even pre-pandemic rates.
- Restaurant workers' wages grew 4.9% year over year nationwide in October 2023 — about half of the national peak of 10.5% in December 2021.
- Then, the average base wage was $12.60 and average hourly earnings totaled $15.85.
Yes, but: Wage growth for restaurant workers in the Raleigh metro did see a 3% jump between September and October of this year.
- That makes Raleigh's wage growth in October (7.8%) higher than the national average (4.9%).
Between the lines: In some parts of Raleigh, declines in wages could be driven by the fact that most of America's downtowns still haven't fully recovered from the pandemic, with fewer people visiting bars and restaurants in many cities, and thus fewer bills and tips.
- Raleigh now ranks 48 out of more than 50 major U.S. cities in terms of post-pandemic downtown recovery, with a 63.2% recovery rate.
- Downtown's average daily pedestrian counts in the third quarter of 2023 were 5% lower than the same time period in 2022, the Downtown Raleigh Alliance said in its most recent quarterly report.