This is Why the Food and Beverage Industry Needs to Shift How It Pays Its Staff
Think about your last restaurant meal. Did you pay with a credit card? Could you leave a tip in cash? Did you split the total using a payment app?
How we dine out has changed over time. Before credit cards were common, patrons covered meals and tips with cash. More recently, diners might have paid with a card and tip with paper bills. However, today’s customers commonly carry little or no cash. Some businesses adopted cash-free policies as a pandemic response, as well. Those cashless payments mean more credit card processing fees for businesses, and restaurants rarely have the paper bills to tip out team members after a shift. Rather than getting cash from the bank, which complicates accounting and creates opportunities for fraud, some dining venues now include tips in biweekly paychecks.
The Problem with Slow Payments
Delayed payments intensify the financial challenges for dishwashers, servers, line cooks, and bartenders, including many who already live a paycheck-to-paycheck existence. The median hourly wage for American food and beverage servers is $11.60, says the U.S. Bureau of Labor Statistics. The lowest 10 percent of individuals in the field earn $8.66 an hour or less. The anti-poverty nonprofit Robin Hood reports that, in New York City alone, 73 percent of low-income workers without a college degree work in food preparation and serving.
When food and beverage professionals live paycheck to paycheck, cash tips often cover immediate living expenses. Waiting a few extra weeks for that money can force people into pawn shops or predatory payday loan offices to make ends meet. The problem gets more complicated when regular paychecks don’t cover basic household expenses, or if businesses eliminate benefits and overtime options by capping an individual’s weekly hours. One unexpected car repair, medical bill, or emergency can trigger financial ruin for hardworking professionals.
Wages Also Matter
People who earn minimum wage can stay trapped in a poverty cycle, and it’s easy to see why. Food and beverage servers in the United States earn an average annual salary of just $27,549, according to an analysis of more than 30 million workers compiled by Zippia, a career website. The advocacy group One Fair Wage says that 35% of tipped workers didn’t earn their state’s minimum wage in 2021, even after factoring in tips. The percentage of people facing this problem was up 3% over 2020.
At minimum wage, individuals might juggle two or three jobs just to get by. Livable wages, the amount of income determined to provide a decent standard of living, make a better baseline. This allows people to work a humane number of hours while still affording the housing, food, utilities, and other basics that we all need to live.
The minimum wage doesn’t account for the true cost of living in most cities, especially if you have children, student loans, medical bills, or a mortgage. That’s why Qwick uses MIT’s Living Wage Calculator to determine the real cost of living in each of our markets. Then, we align our minimum hourly rates to those numbers. Our Business Partners pay a livable wage or higher for all roles, including dishwashing openings and other gigs that traditionally offer minimum wage. Some opportunities on our platform pay more than the local living wage, and that jumps more once you include tips.
A Better Way to Pay
Here’s how living wages make a real impact. In January 2022, the minimum wage in Phoenix was $12.80. MIT’s calculator outlined a $15.41 living wage for one adult with no children. That same month, the average rate for a job posted on Qwick was $17.78.
The person making $12.80 an hour must work more than 40 hours a week just to afford the essentials. Qwick offers a better option, matching individuals with flexible, higher-paying shifts. Professionals can earn the money they need and still have time to live, while Business Partners find experienced help right when they need it.
In addition to meeting or beating the livable wage, Qwick also lets Professionals choose their payment schedule. Our standard option delivers shift pay within one to two business days, which is revolutionary in a world of monthly or biweekly paychecks. If someone needs the money sooner, they can select Instant Pay. Wages and tips get loaded on a debit card within 30 minutes of completing a shift — and often, that money arrives within a few minutes or less. There’s a small, 3% charge to offset processing fees, but earnings from that shift are available almost immediately. About 40% of the Professionals on our platform choose Instant Pay.
Success Stories
Accessing higher wages, faster payments, and flexible roles through Qwick has helped people feed their children, make car payments, and even cover court costs after leaving an abusive relationship. We hear from individuals who no longer rely on pawnshops or payday loans. Others pause personal plans or trade a shift at their full-time job for on-demand opportunities that pay a premium.
We’re proud to help Professionals on the Qwick platform earn more, save more, and reach their personal goals. And when it comes to overhauling the food and beverage industry’s payment process, we hope Qwick’s actions are the spark that inspires wider change.
