The Restaurant Labor Market in 6 Key Statistics
After a year of relative stability, turnover and unemployment are on the rise again. The restaurant labor market has cooled, statistics show. The post-COVID surge in hiring gave low-wage workers — like those in restaurants and hotels — more bargaining power at the individual level, said Elise Gould, a senior economist at the Economic Policy Institute in a 2023 interview. As a result, wages began to grow.
“Low-wage growth between 2019 and 2022 [was] much faster than any other business cycle that we’ve had in the U.S.,” Gould said. In a 2025 interview with Restaurant Dive, Gould said that in the first post-COVID years “you saw wages increasing 10% to 15% year over year.” Ara Kharazian, a research and data lead for Square, said wage growth across geographical regions mean most restaurant workers now earn at least a couple dollars more than minimum wage. “Even the 10th percentile of workers are making several dollars above the minimum wage,” Kharazian said. In foodservice and hospitality, wage growth outpaced inflation in 2021 and 2022, a stark contrast to most industries, which saw wages lag behind increases in the consumer price index. But as employment stabilized in 2023 and 2024, the pendulum swung back in favor of employers, to some degree, and wage growth moderated. There have been political changes too: In July 2025 Congress passed a major spending package backed by President Donald Trump, which included significant cuts to programs workers may rely on. “Low wage workers — like many restaurant workers — who rely on public health insurance, may rely on other assistance programs, food assistance, that it’s going to be much harder to come by,” Gould said. Those cuts further weaken worker power. “It’s a buyer’s market for employers. They can just pay less than workers might have been able to demand otherwise,” Gould said. “Nominal wage growth has been decelerating,” Gould told Restaurant Dive in an interview for a 2024 update to this article. Subsequent months of labor market data indicate that this is still true. According to one working paper from the National Bureau of Economic Research, high turnover, low unemployment, and a high number of job openings per applicant in low-wage sectors was significant enough to measurably decrease worker pay inequality through wage growth. Gould said the first half of 2025 has been relatively static for the restaurant labor market…
Restaurant Operators Plan to Accelerate Openings Despite Headwinds
A new report finds that operators are targeting 20% more new locations in the next two years versus the previous two years. With low consumer sentiment muting sales and traffic across much of the restaurant industry — and for quite some time now — things have seemed a bit dismal lately. But if you look hard enough, you can usually see a few green shoots. Take, for instance, new Bank of America data showing that U.S. restaurant spending accelerated in August, rising 3.7% year-over-year, up from 2.5% in July, as consumers returned to both chain and independent establishments. The uptick signals renewed momentum in the sector after several months of slower growth. Chain restaurants narrowed their decline to just 0.9% from a 2.9% drop in July, while independent eateries posted stronger growth, climbing to 5.3% from 4.3%. Also, recent negative trends haven’t dampened optimism about unit growth. A new study conducted by Crunchtime Information Systems in partnership with Technomic shows that multi-unit restaurant operators plan to open 20% more new locations throughout the next two years compared to the previous two years. This expansion comes despite 73% of operators expressing concerns about economic uncertainty and 75% acknowledging that growth has become more challenging. operators acknowledge that the pursuit of unit growth has evolved, with a stronger focus now on operations and having the right technology in place. Most operators (83%) also agree that having strong vendor support is critical for growth. That last piece can be tricky — 79% of operators who added at least two new locations in the last two years have either replaced or added new vendors, citing cost increases, poor support, and lack of integration. The 2025 Restaurant Growth Insights Report highlights several of the largest operational challenges faced by restaurant operators as they look to grow and where technology can best help them overcome such challenges. Forty-four percent of operators surveyed said that having better inventory management and waste reduction is the most helpful area of focus during times of economic uncertainty. Following inventory management, operators identified the following priority areas to overcome headwinds:
- Implementing more accurate forecasting of food and labor costs (35%)
- Improved staff training and onboarding efficiency (28%)
- More effective menu engineering and profitability analysis (26%)
- Streamlined reporting and real-time data insights (23%)
- Automated labor scheduling and shift optimization (17%)
- Reducing fraud, theft, and compliance risks (17%)…
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The Gen Z Tipping Point
We didn’t see it coming. For years, restaurants assumed the challenge with Gen Z would be about digital habits or menu preferences. But my research shows something more fundamental. Gen Z has arrived without the shared experiences that shaped Millennials, Gen X, and Boomers. That’s the real tipping point we didn’t see coming. It shows up in two ways: first, as guests, they didn’t grow up with the rituals of dining out; and second, as employees, they didn’t get the early workforce reps that previous generations take for granted. The good news? Both gaps are solvable, and restaurants have an unprecedented opportunity to reintroduce themselves to a generation that doesn’t yet know what it’s been missing. When we asked Gen Z about mealtime, their answers revealed a massive, yet actionable void. Compared with the U.S. overall, they were more likely to say that rituals and meaning were missing from their mealtimes:
- 43% want a vibe or ritual that makes meals feel special (+9 pts vs. U.S. average).
- 28% want more meals with friends, not just family (+6 pts).
- 20% admitted they’ve never really had a meaningful mealtime but would like to (+10 pts).
That absence matters. Life’s meaningful moments happened around the table. Restaurants facilitate genuine connection between family and friends over a meal and a drink. The meal isn’t the main event. It’s the backdrop for conversations like first dates, weddings, milestones, and everyday moments. Gen Z grew up with the pandemic disrupting those rituals, compounded by inflation and tipping expectations that make eating out feel like a splurge instead of a given. Thirty-five percent describe themselves as “very lonely,” nine points higher than the U.S. average. Dining out has the potential to be an antidote: a social connector, not just a meal. Restaurants that design “first-time friendly” experiences with affordable entry points, social rituals, and hospitality that teaches the “dance” of dining without judgment can turn what’s missing into what’s meaningful…
Culinary Teams Are Redesigning Restaurant Offerings
With Slimmed-Down Kitchens, Bulked-Up Menus. When labor shortages collide with inflationary food costs, restaurant and foodservice operators everywhere face a daunting squeeze on profitability. Staffing kitchens has never been harder: long hiring cycles, rising wages and turnover rates now erode both budgets and consistency in back-of-house operations. At the same time, food costs have surged—driven by supply-chain disruptions, commodity price hikes, and tighter margins at every link from farm to fork. Together, these twin pressures force operators to rethink how menus are conceived, structured, and executed if they hope to maintain quality while preserving the bottom line. Shrinking culinary staffs demand menu concepts that deliver maximum impact with minimal labor. Gone are the days of sprawling à la minute prep stations; today’s successful kitchens rely on strategic shortcuts, streamlined recipes and versatile ingredients that can be scaled across multiple dishes. Operators need partners who can provide premium, chef-driven components that cut down on hands-on cook time without sacrificing the flavor complexity that guests still crave. In this landscape, assembling a menu is less about endless customization and more about smart building blocks—high-quality, ready-to-use foundations that free chefs to focus on finishing touches, plating, and consistency. That’s where Elevation Foods’ comprehensive line of menu solutions comes in. Drawing on the company’s deep expertise in sous-vide technology, private-label manufacturing and R&D, the Elevation portfolio equips kitchens with sous-vide potatoes, made-from-scratch quiches, frittatas, pot pies, deli salads, dips, and spreads—all fully cooked, refrigerated and ready to integrate. By leveraging these products, operators can reduce prep time by up to 60%, slash labor costs and still serve dishes that meet today’s high culinary expectations. Justin Malvick, Chief Commercial Officer at Elevation Foods, emphasized how this approach answers both labor and cost challenges. “We recognized that operators can no longer afford extensive back-of-house teams,” he said. “Our mission was to deliver chef-inspired components that maintain integrity in every bite yet require only finishing touches in a combi oven or on a grill”…
Guests Say You Can’t Automate Hospitality
Ninety-seven percent of U.S. adults don’t want robotic guest interactions in restaurants. Nearly one-third have already skipped a spot because it felt too automated, according to a survey from Harri. “The data shows that humans are the heartbeat of hospitality,” Luke Fryer, CEO and co-founder of Harri, told Modern Restaurant Management (MRM) magazine. “What guests really want is to feel valued and understood. They want someone who can read their mood, handle their dietary restrictions with empathy and make them feel genuinely welcome. A robot can ask how your day is going, but it actually does not care. Guests feel the difference immediately.” Fryer said the high resistance to robot restaurants now can be attributed to a fundamental truth about dining: people go to restaurants for more than just food. “They’re seeking connection, comfort and care, things only humans can authentically provide. When 90 percent of respondents say keeping guests happy is best handled by people rather than AI, they’re telling us that emotional intelligence can’t be programmed.” The survey, conducted by Dynata, gathered 1,000 online responses from U.S. adults aged 25 and older. Among the findings:
- 78 percent want humans managing sensitive issues like allergies and warm welcomes.
- 85 percent note that food quality is the most important to them.
- Further, 39 percent of diners would trade freebies like bread or chips if it guaranteed consistently excellent service.
Interactions become too automated for guests when technology becomes the primary interface for guest-facing interactions, especially in moments that traditionally involve human warmth or problem-solving, Fryer said. “When technology operates in the background, it’s often accepted. It turns into a problem when the human element disappears from the experience. Interestingly, 88 percent are comfortable with a cashier remembering their name and order, which shows guests aren’t opposed to human service gestures. They’re specifically resistant to robotic attempts at personal connection”…
The Financial Planning Shift That Can Help Restaurants Grow Faster
In today’s fast-changing environment, traditional budgets are falling short. Annual budgets have traditionally guided restaurant financial planning by setting goals, allocating resources and defining performance benchmarks. But in today’s fast-changing environment, traditional budgets are falling short. Static, once-a-year planning often fails to reflect the realities of a business impacted by labor shortages, supply chain disruptions and volatile customer demand. More restaurant operators are turning to rolling forecasts as a flexible, data-driven alternative. These forecasts allow businesses to adjust continuously, using recent performance and real-time trends to guide future decisions. For operators looking to improve profitability, allocate resources effectively and make faster decisions, rolling forecasts offer a compelling solution. Conventional annual budgets are built on past performance and fixed assumptions. Operators often invest weeks or months into detailed planning, only for shifting market conditions to quickly render their budgets obsolete. This approach creates several problems:
- Limited flexibility: Once the budget is approved, there’s often little room for adjustment, even if the business environment changes.
- Misalignment with current trends: Fixed budgets may not account for seasonal shifts, inflation or demand variability.
- Inefficient resource use: When teams are pressured to “spend what’s left” at year-end or cut costs too early in the year, money may not be used where it’s most needed.
- Lack of strategic input: Finance teams may spend the majority of their time reconciling transactions rather than guiding strategic decisions.
While budgeting still has a role in long-term goal setting and financial control, it may not be sufficient for operators managing the complexities of modern foodservice…
Why Smart Restaurants Are Embracing Streamlined Food Solutions
The modern mise en place. In the restaurant business, an undeniable stigma has historically followed the use of pre-prepped or pre-portioned items. Chefs take pride in cooking everything from scratch (as they should!), and customer sentiment often equates pre-prepped restaurant foods with shortcuts at the expense of quality, despite the surge in demand for convenience food in retail. For many, the thought of convenience food products, specifically in restaurants, evokes rubbery, dense, or flavorless entrees. In today’s food service climate, that mindset is not only outdated, it’s counterproductive. Streamlined food solutions like sous-vide proteins, pre-formed patties, or even frozen fries enhance both customer experience and the restaurant’s bottom line. They’ve also come a long way in terms of taste, texture, and quality. When selected with care and implemented with thought, these products drive consistency, reduce food waste, and optimize labor. The Enduring Labor Crisis. Kitchens everywhere are feeling the impacts of labor shortages. Hiring is hard; retention is even harder. Training new staff stretches already thin resources. As the job market continues to reshuffle, many food service operations are increasingly faced with serving high-quality dishes with inexperienced kitchen staff. In these situations, streamlined food solutions prove their value. Pre-portioned proteins, multi-component dish solutions, or cook-from frozen entrees don’t require the same level of skill or oversight to prepare perfectly, and they often produce a more consistent result than cook-from-scratch. Armed with these tools, a less experienced line cook can produce a dish that looks and tastes exactly how it should, every time. This also reduces errors like overcooked shrimp or sauce mix-ups, which lose money and erode customer trust. When execution is simplified, mistake rates drop and ticket times improve, leading to a rise in profit. Real Cost Versus Sticker Price…
Did You Know?
How Beli Ate Yelp. A restaurant-rating app has endeared itself to young diners who no longer trust starred reviews on other platforms. Sofia Jain has a carefully considered process for reviewing restaurants. She dines out in Manhattan, where she lives, constantly. She takes notes on the service, ambience and food. And she deliberates for several hours before scoring a meal from one to 10. “I try to avoid recency bias,” she said. Ms. Jain, 28, is not a restaurant critic. She is a prolific reviewer on Beli, a social restaurant app that allows users to rate meals, creates lists, interact with fellow diners and amass points on a leaderboard. Since signing up in 2022, she has reviewed more than 1,700 restaurants and has another thousand or so bookmarked…
Employee Tip
So You Want to Quit Your Job and Own a Coffee Shop? Start Here. In his book, Outliers, Malcolm Gladwell popularized the idea that “10,000 hours is the magic number of greatness.” Without such experience, how can someone transition from an office job or other profession to pursue the romantic dream of coffee shop ownership? Joe Han of Moim Coffee operates his company as a pop-up inside a brewery in the Glassell Park neighborhood of Los Angeles. Han worked for a hospital as a recruiter to fill nursing jobs, but it was coffee that was his first job out of college. The allure of opening his own café drew him back…
