Most countries without a tipping culture have a far higher minimum wage than the USofA, and you can actually live on it. Imagine living on $7.25/hr., or even $15/hr. in a major urban center.
There are also holes in who gets "minimum wage"—a lot of waitstaff or hospitality staff is paid sub-minimum wage with the expectation that they'll make up the difference in tips.
My husband has been in the restaurant/hospitality industry for 20+ years – as a bartender, manager, cook, chef, brewer, you name it. Margins are SO thin in restaurant, and there aren't many levers to pull – you always have to pay utilities, supplies, rent, etc. What you can control are prices and amount of staff.
The number one predictor of if a non-chain restaurant survived the pandemic was if they owned the building – nothing about actual food quality, service, etc. Most restaurants close within 3 years of opening.
Major chains and fast food places have convinced us that the cost of food should be lower (because they can purchase in wholesale and cut corners), but really, eating out should be even more expensive than it is in the US. To be clear, I'm not saying this is good – just that it's a precarious business.
That's a really interesting point, about needing to own the building. And it makes perfect sense! Also interesting about the chains.
I did look at the price of Duke's (the restaurant in Seattle) from 1980, and to my surprise, adjusted for inflation, the price was the (insane) rate it is now. But I also think that eating out was much more of a "special occasion" then -- eating out became something the middle class does all the time, not just the rich. And for better or for worse, now I think it's changing back to a "rich person" thing.
Oh, now this is a good point! Except for the city centre, and maybe long work lunches, there's definitely less eating out here in the villages around Geneva. We might go to the local tennis club for a pizza lunch once a month, two pizzas, three drinks, nuggets&fries and ice cream for the kids, it comes to about 100 CHF. We never get takeout-- I read stories with characters in the US getting ubereats for everything, even breakfast! We could never afford that and it doesn't really exist here either. Nice bag of croissants from the grocery store or bakery, heat them in the oven 🤗
It reminds me of being a kid, when going to the nearby steak place or even McDonald's was a treat!
I think a lot of it may be commercial rents. I am in a lower-cost area of the US right now, and while groceries cost about the same, restaurants are about 20 percent cheaper than in our previous high-cost location. Wages are a little lower here as well, but I think most of the difference is the cost of rents. Same may well apply in other countries: if rents are cheaper, the restaurants will cost less.
A timely and excellent portrayal of the rising and outrageous costs of most everything. Brent, you have hit a nerve - I am so sick of American insanity that I fled to South Africa. Just arrived in Cape Town a few days ago and I am absolutely in love with this place. Supermarket food prices are about 40% cheaper here. The restaurant prices here in Melkbosstrand are almost half American prices. The most expensive entree in town is South African lobster for $23.50. A rib eye steak costs $16. Salmon and spinach Benedict for $10. Fish and chips to go for $6.
As a thrifty nomad, this is an ideal spot. Everything is cheaper here. I've got a two bedroom apartment overlooking the sea for just $1500 a month. In America it would go for $6000 easily...
Remember Trump said he would lower prices on Day 1. Instead, they are rocketing higher. I fear for those who have been priced out of a decent life. Many of my friends back home are despairing for their futures. There is no middle class anymore. It's now the underclass and the top 5%. I am very sad about the state of our country and don't see any improvement in the next few years.
We have not been back to the US in 2 years, but when we did return to attend a family funeral in 2023 (we live in Portugal), we definitely saw a huge increase in restaurant prices. We are wine drinkers, so it was a shock to find that a $9.00 glass of (just okay) wine in 2021 was upwards of $20.00 (and of course, a tip on top). It got to the point where we decided to just drink beer instead of wine - at least it was a little bit cheaper. - CW
Let’s talk about the price gouging for “mocktails” because it says mocktails we can double the price of the lemonade…oh, and it has a twist in it. UGH.
Restaurants are one of the highest businesses hit at this point of the Trump effect (tariffs and all his other economic mess). I think it is partly due to yhe food we import has increased. Partly due to the lack of farm labor due to the ICE deportation mess. For some reason the agriculture (both crops and livestock) have been in very bad shape. I do not quite crasp enough to know exactly why. Dut farmers and ranchers seem to point at Trump policies. Even fast food and grocery prices have been hit. Many chains (of all kinds, not just food related) have been closing large numbers of shops, restaurants and stores. Some predict that the worse is to come. I do my best to live simple life-style (decided when young, gave me more freedom in my work needs, lol) I have even noticed it and just do not eat out or even fast food; something I use to a great deal of the time in earlier years. Not sure this is informative at all. Being 79 I remember when mom and dad bought a new house in CA with a huge backyard brand new for about $10, 000. Not now a days, but I always move alot so always rent. Enjoy your weeks a head. Be glad you are out there.
Thank you. Yes, it's very very grim. I hope something can be done. Getting that idiot (and his enablers) out of the White House could be a start. I still can't believe people believed his obvious lies, but here we are.
All of those factors, and also real estate. I know many businesses that have had to close down due to high leases and rent -- very often in buildings owned by absentee landlords in the form of investment companies, etc., located in far-off places who only know the location as a dot in their portfolio. The businesses that managed to weather Covid best where I live were ones where the business owner also owned the building (a rare thing), and the same is showing to be true now.
I think this is true but I also see so many VACANCIES, so I don't get the math. It's better to wait for a higher-paying renter than have it be occupied?? I guess so. So depressing....
I share your confusion! There's probably a tax benefit would be my guess. Several downtown storefronts in my town--prime location in a long-established tourist destination--have been empty for years. And I know at least 3 owners of actually successful cafes/lunch restaurants who closed down due to a combination of chronic shortage of staff, and high leases. Both of which are related to rent--the biggest reason for staff shortages locally is that nowhere can pay people enough for them to afford housing, which is part of why 14- and 15-year-olds seem to be running the town in summer. Their housing is subsidized (by their parents/guardians).
My husband just returned to our town in America. We are a family of five so eating out wasn't something we did often. But, we had a few favorite restaurants that were on the affordable side for our family. He went to one of those establishments and it cost him $20 just for his simple meal--a BBQ sandwich, two small sides and an iced tea. (This is a restaurant that's pretty close to fast food standard). $20! For one person! This is not what it cost when we lived there. Our family would not be able to eat there anymore if we still lived there. It's insane.
What makes it worse is that the quality of the food and service has gone down. So, not only are you paying ridiculous amounts to eat out, but you're getting mediocre food and bad service. Every time my partner and I eat out now, we almost always leave saying we could have made that so much better at home and it was absolutely not worth it. We used to enjoy a nice meal out, but now it's always so disappointing.
I agree! And often there is even a sense of resentment. I always said, "Look, if you're going to charge these insane prices, the food and service better be INSANELY GOOD." And often it's grudging and resentful. What a mess!
I think it depends on where you are and also, sadly, on the generation in which the server is in. We are currently in Buenos Aires, Argentina, and many of the servers here are Gen Z and they have the same apathetic, "you're bothering me" attitude that you find in the US. I don't know if this is the case in other corners of the world, but it is definitely the case in Argentina. As much as I hate being the old person blaming social media, I am absolutely blaming social media. 😆
Great article, although I have not been in the US for several years. And judging by how fast prices rose in Canada, I doubt I will go for several more. (Although there is another reason)
Earlier this year, I spent 10 weeks in Australia, and last year it was 3 weeks in Scotland.
One thing that stood out to me. When we went to an average restaurant, a burger was in the $25 range, no tip as that is not the culture in those two countries. Although a bit high, not far off what it is in Canada. In order to compensate, we ate a lighter lunch or bought fruit at the grocer.
What I found more surprising was the cost of beer, wine, or whiskey in the restaurants. How does it make sense that an entire bottle is cheaper than 3 glasses? I'd prefer not to drink that much, but the pocketbook somehow takes precedence and the bottle magically empties.
If food prices must be high to adjust for higher inflation, resources and supplies, then I would like to see more restaurant adopt a bring your own wine (or whiskey) policy. It would make dining out just a bit more affordable for those that enjoy a glass of wine with their meal.
I didn't mention this, but the price of alcohol in America seems even more insane than the food. I think they assume people will splurge anyway. I don't understand who can afford $20-$25 drinks.
Here in Australia I could pay AU$24 for a decent bistro meal... or the same price for 2x 1.5 litre bottles of raw milk and a dozen eggs, lasting me 6 breakfasts.
I have no motivation to eat out at those prices when I can buy weeks worth of top-tier organic, wholefood produce for the same cost.
Yes, I hear you. We eat out A LOT in more affordable countries, but we are making the same calculation in more expensive ones: it makes more sense to cook at home, except for special occasions.
In Ireland, food has become really expensive too. It's effecting weekly shopping and restaurant prices. We are just back from a week in Alicante city. Some things were cheaper there, especially two of the most common treats - coffee and wine. Half the price of Irish prices. But the tourist spots were inflating prices and we searched out the places where the locals socialized. Tipping in Ireland is an average of 10% of the total meal bill. And it's generally discretionary. And new legislation requires establishments to share the tips with all staff.
Hit the nail on the head, I paid $9 for a mediocre croissant in Austin, TX and anywhere in Latin America, I can find a better one for $1 or maybe $1.50. Taxes and tips also are ridiculous in the states. It simply isn't worth going out to eat for me anymore.
Health care is similar. Just went to an Argentinian hospital Saturday for strep throat. $30 for my visit without insurance.
Usa has great national parks and a lot of opportunity to make money, but for me, it makes more sense to spend less and travel.
It’s outrageous. Here in L.A., things skyrocketed during Covid, and then everyone expected you to tip even if you were only doing pickup and weren’t getting any kind of service because we were trying to keep our favorite restaurants open. Then that just continued even when things reopened and table service started again.
But things have shot up even higher in the past year. It’s really bad. The prices. The expectations. The lack of healthcare options for people in the service industry. It doesn’t make sense. None of this is sustainable.
I stopped eating out when they got rid of the dollar menus, it’s especially appalling when you realize the fancy restaurant food came from the same freezer at the same store you shop at. You’re paying $50 for $8 worth of frozen Chinese dumplings you could have microwaved at home. Another appalling thing is grocery store sushi in Montana. We are at least 1000 miles away from any ocean, it takes a week to send a letter that far let alone a fresh fish. Why would anyone consider this option.
When I first moved out of my parents house in 1980 I worked at 3 restaurants because I had a very large appetite and could not afford the amount of food I needed to eat, all of it was made from scratch and it was all good. Made it worth the $3.35 an hour I was making for peeling garlic and chopping onions. I could not do that today for a couple of reasons but mainly it’s the quality of food, frozen and preprocessed never would have made it to 18 that and the fact that restaurants won’t feed you anymore just because you work there. You’ll get 10% off menu prices. On the plus side I have learned to cook.
We've really noticed the price inflation at restaurants on our recent trip to Florida. When we're at home, we're very mindful of where and when to eat out and take advantage of known specials at our favorite places. But that doesn't seem like it should be the (only) way customers should approach restaurants and how establishments get people in the door. And it goes for fast food through fine dining. Use the app for a decently priced sandwich and fries. Come in on Tuesdays for the $10 cheeseburger meal deal. Sit at the bar for happy hour for the same gourmet food you'd get with table service at 7pm but at 50% off. It feels like a bit of a shell game that only favors the already rich and flexible. Like the rest of late-stage capitalism!
Having just returned from Spain this week, I can honestly say that the pricing structure is so completely askew.
Craft coffee shop and craft bakery in the heart of Barcelona: 1.30€ cappuccino and 1.70€ croissant.
3€ total. No tip
Grand total: 3€
Craft coffee shop and craft bakery in the heart of New York City: $6 cappuccino and $9 croissant.
$15 total. Expected tip: 20% - $3
Grand total: $18
At some point, you have to ask yourself… how is the American cost 6 times as much.
MAKE IT MAKE SENSE. I am just baffled.... And frankly, annoyed.
Most countries without a tipping culture have a far higher minimum wage than the USofA, and you can actually live on it. Imagine living on $7.25/hr., or even $15/hr. in a major urban center.
There are also holes in who gets "minimum wage"—a lot of waitstaff or hospitality staff is paid sub-minimum wage with the expectation that they'll make up the difference in tips.
the whole system is a mess.
It's very simple math...the Barista in NY makes 6x as much...the rent is 6x as much. Problem solved
You can find much cheaper all over NY.
My husband has been in the restaurant/hospitality industry for 20+ years – as a bartender, manager, cook, chef, brewer, you name it. Margins are SO thin in restaurant, and there aren't many levers to pull – you always have to pay utilities, supplies, rent, etc. What you can control are prices and amount of staff.
The number one predictor of if a non-chain restaurant survived the pandemic was if they owned the building – nothing about actual food quality, service, etc. Most restaurants close within 3 years of opening.
Major chains and fast food places have convinced us that the cost of food should be lower (because they can purchase in wholesale and cut corners), but really, eating out should be even more expensive than it is in the US. To be clear, I'm not saying this is good – just that it's a precarious business.
That's a really interesting point, about needing to own the building. And it makes perfect sense! Also interesting about the chains.
I did look at the price of Duke's (the restaurant in Seattle) from 1980, and to my surprise, adjusted for inflation, the price was the (insane) rate it is now. But I also think that eating out was much more of a "special occasion" then -- eating out became something the middle class does all the time, not just the rich. And for better or for worse, now I think it's changing back to a "rich person" thing.
Oh, now this is a good point! Except for the city centre, and maybe long work lunches, there's definitely less eating out here in the villages around Geneva. We might go to the local tennis club for a pizza lunch once a month, two pizzas, three drinks, nuggets&fries and ice cream for the kids, it comes to about 100 CHF. We never get takeout-- I read stories with characters in the US getting ubereats for everything, even breakfast! We could never afford that and it doesn't really exist here either. Nice bag of croissants from the grocery store or bakery, heat them in the oven 🤗
It reminds me of being a kid, when going to the nearby steak place or even McDonald's was a treat!
Makes sense. (Loved Geneva, but yeah, it was expensive!)
I think a lot of it may be commercial rents. I am in a lower-cost area of the US right now, and while groceries cost about the same, restaurants are about 20 percent cheaper than in our previous high-cost location. Wages are a little lower here as well, but I think most of the difference is the cost of rents. Same may well apply in other countries: if rents are cheaper, the restaurants will cost less.
Oh that's an interesting point. I've seen that a couple of times in the comments, so there must be truth to it.
A timely and excellent portrayal of the rising and outrageous costs of most everything. Brent, you have hit a nerve - I am so sick of American insanity that I fled to South Africa. Just arrived in Cape Town a few days ago and I am absolutely in love with this place. Supermarket food prices are about 40% cheaper here. The restaurant prices here in Melkbosstrand are almost half American prices. The most expensive entree in town is South African lobster for $23.50. A rib eye steak costs $16. Salmon and spinach Benedict for $10. Fish and chips to go for $6.
As a thrifty nomad, this is an ideal spot. Everything is cheaper here. I've got a two bedroom apartment overlooking the sea for just $1500 a month. In America it would go for $6000 easily...
Remember Trump said he would lower prices on Day 1. Instead, they are rocketing higher. I fear for those who have been priced out of a decent life. Many of my friends back home are despairing for their futures. There is no middle class anymore. It's now the underclass and the top 5%. I am very sad about the state of our country and don't see any improvement in the next few years.
Yes, I hear the despair too. It's heartbreaking. Obviously, nomading isn't the solution for everyone. So what do these people do?
(Your situation sounds lovely!)
We have not been back to the US in 2 years, but when we did return to attend a family funeral in 2023 (we live in Portugal), we definitely saw a huge increase in restaurant prices. We are wine drinkers, so it was a shock to find that a $9.00 glass of (just okay) wine in 2021 was upwards of $20.00 (and of course, a tip on top). It got to the point where we decided to just drink beer instead of wine - at least it was a little bit cheaper. - CW
Oh, the alcohol situation is even worse than the food! I guess they assume people will pay ANYTHING to get a buzz. Maybe some people will but not me!
Let’s talk about the price gouging for “mocktails” because it says mocktails we can double the price of the lemonade…oh, and it has a twist in it. UGH.
😂😂😂
Restaurants are one of the highest businesses hit at this point of the Trump effect (tariffs and all his other economic mess). I think it is partly due to yhe food we import has increased. Partly due to the lack of farm labor due to the ICE deportation mess. For some reason the agriculture (both crops and livestock) have been in very bad shape. I do not quite crasp enough to know exactly why. Dut farmers and ranchers seem to point at Trump policies. Even fast food and grocery prices have been hit. Many chains (of all kinds, not just food related) have been closing large numbers of shops, restaurants and stores. Some predict that the worse is to come. I do my best to live simple life-style (decided when young, gave me more freedom in my work needs, lol) I have even noticed it and just do not eat out or even fast food; something I use to a great deal of the time in earlier years. Not sure this is informative at all. Being 79 I remember when mom and dad bought a new house in CA with a huge backyard brand new for about $10, 000. Not now a days, but I always move alot so always rent. Enjoy your weeks a head. Be glad you are out there.
Thank you. Yes, it's very very grim. I hope something can be done. Getting that idiot (and his enablers) out of the White House could be a start. I still can't believe people believed his obvious lies, but here we are.
All of those factors, and also real estate. I know many businesses that have had to close down due to high leases and rent -- very often in buildings owned by absentee landlords in the form of investment companies, etc., located in far-off places who only know the location as a dot in their portfolio. The businesses that managed to weather Covid best where I live were ones where the business owner also owned the building (a rare thing), and the same is showing to be true now.
I think this is true but I also see so many VACANCIES, so I don't get the math. It's better to wait for a higher-paying renter than have it be occupied?? I guess so. So depressing....
I share your confusion! There's probably a tax benefit would be my guess. Several downtown storefronts in my town--prime location in a long-established tourist destination--have been empty for years. And I know at least 3 owners of actually successful cafes/lunch restaurants who closed down due to a combination of chronic shortage of staff, and high leases. Both of which are related to rent--the biggest reason for staff shortages locally is that nowhere can pay people enough for them to afford housing, which is part of why 14- and 15-year-olds seem to be running the town in summer. Their housing is subsidized (by their parents/guardians).
Incredible.
Agreed - I put this in another comment, but the #1 predictor of if a non-chain restaurant survived the pandemic was if they owned the building.
💯
My husband just returned to our town in America. We are a family of five so eating out wasn't something we did often. But, we had a few favorite restaurants that were on the affordable side for our family. He went to one of those establishments and it cost him $20 just for his simple meal--a BBQ sandwich, two small sides and an iced tea. (This is a restaurant that's pretty close to fast food standard). $20! For one person! This is not what it cost when we lived there. Our family would not be able to eat there anymore if we still lived there. It's insane.
Something has to change. I'm sure this is why people are having fewer kids. Who can afford it? Seriously.
What makes it worse is that the quality of the food and service has gone down. So, not only are you paying ridiculous amounts to eat out, but you're getting mediocre food and bad service. Every time my partner and I eat out now, we almost always leave saying we could have made that so much better at home and it was absolutely not worth it. We used to enjoy a nice meal out, but now it's always so disappointing.
I agree! And often there is even a sense of resentment. I always said, "Look, if you're going to charge these insane prices, the food and service better be INSANELY GOOD." And often it's grudging and resentful. What a mess!
(The hospitality is better overseas, I think.)
I think it depends on where you are and also, sadly, on the generation in which the server is in. We are currently in Buenos Aires, Argentina, and many of the servers here are Gen Z and they have the same apathetic, "you're bothering me" attitude that you find in the US. I don't know if this is the case in other corners of the world, but it is definitely the case in Argentina. As much as I hate being the old person blaming social media, I am absolutely blaming social media. 😆
LOL Sadly, I also blame social media. We're cliches! And yet... hehe
Great article, although I have not been in the US for several years. And judging by how fast prices rose in Canada, I doubt I will go for several more. (Although there is another reason)
Earlier this year, I spent 10 weeks in Australia, and last year it was 3 weeks in Scotland.
One thing that stood out to me. When we went to an average restaurant, a burger was in the $25 range, no tip as that is not the culture in those two countries. Although a bit high, not far off what it is in Canada. In order to compensate, we ate a lighter lunch or bought fruit at the grocer.
What I found more surprising was the cost of beer, wine, or whiskey in the restaurants. How does it make sense that an entire bottle is cheaper than 3 glasses? I'd prefer not to drink that much, but the pocketbook somehow takes precedence and the bottle magically empties.
If food prices must be high to adjust for higher inflation, resources and supplies, then I would like to see more restaurant adopt a bring your own wine (or whiskey) policy. It would make dining out just a bit more affordable for those that enjoy a glass of wine with their meal.
I didn't mention this, but the price of alcohol in America seems even more insane than the food. I think they assume people will splurge anyway. I don't understand who can afford $20-$25 drinks.
Maybe they hope that after the first one, they won't care.
Next thing you know, there will be a dining out credit app so people can go out, then pay it back later.
Talk about personal debt increase.
LOL
Here in Australia I could pay AU$24 for a decent bistro meal... or the same price for 2x 1.5 litre bottles of raw milk and a dozen eggs, lasting me 6 breakfasts.
I have no motivation to eat out at those prices when I can buy weeks worth of top-tier organic, wholefood produce for the same cost.
Yes, I hear you. We eat out A LOT in more affordable countries, but we are making the same calculation in more expensive ones: it makes more sense to cook at home, except for special occasions.
In Ireland, food has become really expensive too. It's effecting weekly shopping and restaurant prices. We are just back from a week in Alicante city. Some things were cheaper there, especially two of the most common treats - coffee and wine. Half the price of Irish prices. But the tourist spots were inflating prices and we searched out the places where the locals socialized. Tipping in Ireland is an average of 10% of the total meal bill. And it's generally discretionary. And new legislation requires establishments to share the tips with all staff.
Interesting! Yes, tourist prices are always higher, aren't they? But I suppose that's always the case.
Hit the nail on the head, I paid $9 for a mediocre croissant in Austin, TX and anywhere in Latin America, I can find a better one for $1 or maybe $1.50. Taxes and tips also are ridiculous in the states. It simply isn't worth going out to eat for me anymore.
Health care is similar. Just went to an Argentinian hospital Saturday for strep throat. $30 for my visit without insurance.
Usa has great national parks and a lot of opportunity to make money, but for me, it makes more sense to spend less and travel.
It's funny, that's what we always say! America has those GREAT national parks, and yeah, you can make high salaries. But as for the rest.... OY!
It’s outrageous. Here in L.A., things skyrocketed during Covid, and then everyone expected you to tip even if you were only doing pickup and weren’t getting any kind of service because we were trying to keep our favorite restaurants open. Then that just continued even when things reopened and table service started again.
But things have shot up even higher in the past year. It’s really bad. The prices. The expectations. The lack of healthcare options for people in the service industry. It doesn’t make sense. None of this is sustainable.
Yeah, the tipping thing is just crazy, not sustainable. And it's annoying, because the 20% started as a good impulse during covid.
I stopped eating out when they got rid of the dollar menus, it’s especially appalling when you realize the fancy restaurant food came from the same freezer at the same store you shop at. You’re paying $50 for $8 worth of frozen Chinese dumplings you could have microwaved at home. Another appalling thing is grocery store sushi in Montana. We are at least 1000 miles away from any ocean, it takes a week to send a letter that far let alone a fresh fish. Why would anyone consider this option.
When I first moved out of my parents house in 1980 I worked at 3 restaurants because I had a very large appetite and could not afford the amount of food I needed to eat, all of it was made from scratch and it was all good. Made it worth the $3.35 an hour I was making for peeling garlic and chopping onions. I could not do that today for a couple of reasons but mainly it’s the quality of food, frozen and preprocessed never would have made it to 18 that and the fact that restaurants won’t feed you anymore just because you work there. You’ll get 10% off menu prices. On the plus side I have learned to cook.
LOL yeah, sushi in Montana.
Really interesting about those early jobs. I suspect they're immigrants now.
We've really noticed the price inflation at restaurants on our recent trip to Florida. When we're at home, we're very mindful of where and when to eat out and take advantage of known specials at our favorite places. But that doesn't seem like it should be the (only) way customers should approach restaurants and how establishments get people in the door. And it goes for fast food through fine dining. Use the app for a decently priced sandwich and fries. Come in on Tuesdays for the $10 cheeseburger meal deal. Sit at the bar for happy hour for the same gourmet food you'd get with table service at 7pm but at 50% off. It feels like a bit of a shell game that only favors the already rich and flexible. Like the rest of late-stage capitalism!
It's an endless scramble, isn't it? And yeah, that knocks against "hospitality," FOR SURE.
I wonder when/if we'll ever get back to Florida...