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Bad time to be a waitress, or a Brinker investor

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Among all the layoffs at tech companies and banks, layoffs at restaurants are barely a plink-plink-plink dropping in the unemployment bucket. Restaurant employees, after all, often work more than one job and variable hours, and turnover is extremely high. It's not one of those made-for-Hollywood scenes when restaurants lay off employees (with the conference room filled with HR consultants and stacks of separation agreements); the picture looks more like gradual reduction in hours until one day you're just not on the schedule. Or, one cocktail waitress at this location, a hostess at the other location, handing in their aprons and their time cards. Perhaps it's just that applicants for empty jobs never get a call back, no matter how awesome their experience.

The Wall Street Journal today evaluates a report that jobs at food service establishments have decreased for five months in a row, and says waiters and waitresses are earning less in tips. Once-darlings of Wall Street, Brinker International (NYSE: EAT)'s Chili's and Starbucks (NASDAQ: SBUX) have seen many outlets close. To blame: it's the economy, naturally, with patrons eating out less, downscaling to fast food for family nights out, ordering less expensive food, and reducing tips from 20%-plus to exactly 15%. Adding insult to injury is the half-of-minimum-wage pay that servers and bartenders are paid in many states: it's been $2.13 an hour since I graduated high school (I can still remember the ignomy when my $21 weekly paycheck from the little Lexington, Virginia pub where I worked in college bounced -- that's how you know your employer is struggling!).

These aren't good times to work in the restaurant industry, or invest in anything but the bare-bones-est of eating establishments.

Looking back on the last several decades of eat-ertainment, it's clear that this wild ride was doomed, eventually, to end: as ex-urbs were developed to meet the seemingly bottomless appetite of Americans to borrow from their rising home values and future earning potential for a good time eating out with sizzling skillets, frou-frou blender drinks, and immense brownie desserts, the pendulum only had so far to swing. I, for one, don't believe the happy days are coming back for fast casual restaurant chains, and would stay away from the stock of Brinker, Darden and friends: permanently.

Oh, and if I were a waitress? I'd expand my skillset. Learn how to fix bikes, or install solar panels, or become a credit counselor. Just an idea...

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Last updated: November 25, 2009: 11:37 AM

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