San Francisco's restaurant worker wage growth on decline
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Restaurant workers' wage growth has slipped considerably since the peak of COVID-19, falling below even pre-pandemic rates, a new report finds.
State of play: Year-over-year wage growth for restaurant workers in the San Francisco metro area rose slightly to 4.6% in October, from 3.6% in September. But that's down from a peak of 9.1% in April 2018, though growth crossed the 8% mark in 2020 and 2022.
- The data comes by way of Square's new third-quarter restaurant industry report, and includes base wages, tips and overtime.
The big picture: Nationally, restaurant workers' wages grew 4.9% year over year nationwide in October.
- That's slowed from peak growth of 10.5% in December 2021, when the average base wage was $12.60 and average hourly earnings totaled $15.85.
Why it matters: Restaurant workers in the Bay have long struggled to keep pace with the region's high costs of living. The pandemic fueled a wave of resignations in the sector as restaurants sought to retain and recruit employees.
- In San Francisco, the number of people who work in food services or food handling dropped 55% from 2019 to 2022, according to a San Francisco Chronicle analysis of census data.
- In a bid to ensure more equitable pay across staff, several restaurants in the city are trying to move away from tipping and instead raise prices or add a flat surcharge to final bills.
- Some food services employees in the Bay have also turned to strikes to win raises and better benefits.
Of note: The city raised the minimum wage from $16.99 to $18.07 in July — the largest increase in eight years.
- Minimum wage for food workers in California will also increase to $20 per hour starting in April under legislation signed into law in September.
Driving the news: Restaurants' costs are up in part because of inflation, and consumers are often reluctant to pay higher prices because they're also getting hit with higher costs elsewhere.
- Discretionary spending on dining out is often the first thing to go when times get a little tougher — and tips may be shrinking, especially amid a growing sense of "tipping fatigue."
Be smart: Wage growth is best considered alongside inflation, which was 3.2% in October. If your salary didn't increase beyond that, your wage didn't really grow at all.
- Of course, everybody experiences inflation differently.
Between the lines: Some of what's happening here is also being driven by the fact that most of America's downtowns still haven't fully recovered from the pandemic — meaning there are fewer people visiting bars and restaurants in many cities, and thus fewer bills and tips.