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Palo Alto is in one of the most expensive real estate markets in the country, making it tough for restaurateurs, and a good many other businesses in the area, to pay enough for their workers to afford rent. Many workers are moving out of the area to places with more reasonably priced accommodations. Other pressures affecting restaurants are the escalating minimum wage in California and a shortage of quality workers.
Longtime owners who have run restaurants here for decades say they've never seen labor costs become so acute, and they fear a breaking point is on the horizon.
…Owners say the problem has become more acute in the last two years or so. At one local restaurant, line cooks make about $2,600 per month; bussers, about $3,000; and servers, about $4,500. (Line cooks, however, work the most hours.) Employees can get additional compensation from overtime pay, and servers also earn more from tips. However, the median rental price for a one-bedroom in Palo Alto currently sits at $2,700, up 8.7 percent from last year, according to a report compiled by rental website Apartment List. The median cost to rent a one-bedroom in Mountain View is just below Palo Alto's at $2,680, according to Apartment List.
Owners said they see many staff living with multiple people in apartments -- three people in a one bedroom, for example -- to afford rent. — Elena Kadvany, Palo Alto Online