Employment Security Department
Labor Market & Economic Analysis Branch
Eating and Drinking Places
Overview
Eating out is an important part of daily life in the United States and the trend continues to grow unabated.
According to the National Restaurant Association, each American (8 years and older) consumed an
average of 4.3 commercially prepared meals per week in 1998, up from 3.9 meals just five years earlier.
Consumer spending at eating and drinking establishments is expected to reach $354.0 billion in 1999, up
4.6 percent from 1995. On average, restaurant spending amounted to about $2,400 for each of the
nearly 99 million households in the United States. In addition, consumers spend tens of billions at other
foodservice locations outside the home, such as lodging places, employee cafeterias, coffee stands, and
vending machines. For every dollar spent at food stores, consumers spend about 56 cents at restaurants
and bars, up from 32 cents in 1967.
Eating and drinking places consist of restaurants, bars and taverns, and other away-from-home
establishments. The National Restaurant Association further analyzes eating and drinking places by
various segments:
commercial, including full-service and limited-service restaurants, cafeterias, caterers, ice cream and
yogurt stands, coffee and espresso stands, bars and taverns, hotel and motel restaurants, food
contractors, and other (e.g., vending machines);
institutional, including businesses, schools, hospitals, nursing homes and others that operate their
own foodservice; and
military, including base exchange, and officers’ and non-commissioned officers foodservice.
By far, the largest share of eating and drinking sales (91 percent) is in commercial eating and drinking
places. The remainder of eating and drinking sales ($32.6 billion) were in institutional and military
foodservice operations. According to the National Restaurant Association, sales for all eating and
drinking places are estimated to reach $354 billion in 1999, an average annual growth rate of 5.2 percent
from 1997. The restaurant industry is mature and sales gains tend to come at the expense of
competition. The most pressing challenges facing the industry are the keen competition and the
availability of labor.
Table 1
U.S. Eating & Drinking Industry Sales, 1996, 1997, 1998, and 1999
Source: National Restaurant Association
Estimated Estimated Estimated Forecast
Segment 1996 1997 1998 1999
Commercial $276.8 $288.8 $306.0 $321.4
Full-service restaurants $100.3 $104.4 $111.3 $117.0
Limited-service restaurants $98.4 $103.5 $105.3 $110.4
Cafeterias $3.8 $3.9 $4.1 $4.2
Caterers $2.9 $3.0 $3.1 $3.3
Ice cream, yogurt stands $2.5 $2.6 $2.8 $2.9
Food contractors $18.9 $19.8 $22.1 $23.2
Motel & hotel restaurants $15.9 $16.5 $18.0 $18.7
Bars/taverns $9.4 $9.2 $11.1 $11.5
Other commercial (e.g., coffee stands, vending machines) $24.7 $25.9 $28.2 $30.2
Institutional food service $29.7 $30.5 $30.7 $31.4
Military food service $1.1 $1.1 $1.0 $1.2
Total U.S. food service $307.6 $320.4 $337.7 $354.0
Over 8.2 million U.S. workers and proprietors are employed in the eating and drinking industry, making it
the third largest private employment sector (behind health services and business services) in the
economy. The industry’s share of total nonfarm jobs rose from 4.5 percent in 1980 to 5.3 percent in 1998,
an increase of 3.2 million jobs.
Figure 1
Workers and Proprietors in the U.S. Eating & Drinking Industry, 1969-1997
Source: U.S. Bureau of Economic Analysis
9,000
8,000
7,000
6,000
Thousands of workers
5,000
4,000
3,000
2,000
1,000
0
1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997
Factors Behind Growth in the Eating and Drinking Industry
The portion of consumers’ food dollars that are spent at eating and drinking places has increased due
primarily to demographic trends. First, changes within the American family have expanded the pool of
people likely to eat out at restaurants. The most dramatic and significant of these changes is the
increased number of married women employed outside the home. In 1970, 43 percent of married women
were in the labor force. By 1998, the share of married women in the labor force had increased to about
64 percent. The U.S. Bureau of Labor Statistics estimates continued gains to 67 percent by 2005.
Generally, working women have less time to prepare food at home and they generate additional
household income that makes eating out an attractive option. Second, the baby-boom generation boasts
the highest proportion (72 percent) of two-income families (i.e., both members of the married couple hold
jobs). Across all generations, the proportion of two-income families is projected to grow to 64 percent of
all married households by 2000; and 80 percent of households headed by individuals aged 25 and 44
years (both married and unmarried) are likely to have two incomes. Given recent findings that two-
income households (with incomes between $50,000 and $70,000 in 1994) spend 60 percent more than
the average household on food away from home, this trend bodes well for continued healthy spending on
eating out. Third, with people marrying later in life and the high divorce rate, there are more one-person
households that ever before. People who live alone are more likely to dine out than to prepare home-
cooked meals. This trend in buying prepared food has gained further impetus from the growing number
of restaurants that offer take-out and delivery service.
The overall health of the domestic economy influences consumer spending, which in turn drives sales at
eating and drinking establishments. In particular, disposable personal income—total personal income
after taxes—is an important measure because of its influence on the overall level of consumer spending.
Generally speaking, when personal income is growing, consumers are more willing to loosen their purse
strings; conversely, when disposable income levels aren’t growing or only increasing at a lackluster rate,
consumers are less willing to spend. Their choices may shift to eating out at less expensive restaurants
or fast-food chains.
Eating and Drinking and the Washington Economy
Eating and drinking places is one of the largest private industries in Washington State with a total work
force of 171,800 employees in 1998, about 7 percent of the total state nonagricultural employment.
Employment in eating and drinking has increased as a percentage of total nonfarm employment over the
last two decades, primarily reflecting growth in population as well as real increases in income and
spending power along with increased tourism activity.
Figure 2
Number of Eating & Drinking Establishments in Washington, 1981-1998
Source: Washington Employment Security Department
12,000
10,000
Number of establishments
8,000
6,000
4,000
2,000
0
1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
Figure 3
Workers in Washington Eating & Drinking Industry, 1981-1998
Source: Washington Employment Security Department
200,000
180,000
160,000
140,000
Number of employees
120,000
100,000
80,000
60,000
40,000
20,000
0
1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
Eating and drinking establishments are a prominent part of Washington’s burgeoning tourism sector.
Travelers’ spending in Washington—which totaled $9.6 billion in 1998—supported a substantial number
of eating and drinking jobs throughout the state. In 1998, nearly one-third of total eating and drinking
employment was supported by travelers’ expenditures.
Figure 4
Eating & Drinking Expenditures and Eating & Drinking Employment Supported by Travelers in
Washington, 1991-1998
Source: Washington Department of Community, Trade & Economic Development, Tourism Division
60,000 $2,250
Eating & drinking spending (Millions of 1998 chained $)
56,000
Jobs
52,000 Spending $2,000
Eating & Drinking Employment
48,000
44,000 $1,750
40,000
36,000 $1,500
32,000
28,000 $1,250
24,000
20,000 $1,000
1991 1992 1993 1994 1995 1996 1997 1998
Average annual wages of eating and drinking workers were $11,442 in 1998, more than two-thirds less
than the average nonfarm worker annual payroll. Between 1981 and 1998, real average annual wages in
eating and drinking places grew slightly less (0.9 percent) than the average annual nonfarm payroll
growth rate (1.1 percent). The increase in average payroll for eating and drinking workers has barely kept
pace with the inflation rate during this period. In terms of average hourly wages, eating and drinking
workers are in predominantly low-wage jobs. More than seven out of every ten eating and drinking
workers earn less than $10 per hour, compared with statewide workers (30 percent).
Table 2
Real Average Wages for Washington Eating & Drinking Industry Workers, 1981-1998 (1998 dollars)
Sources: Washington Employment Security Department, U.S. Bureau of Economic Analysis
Sector 1981 1983 1985 1987 1989 1991 1993 1995 1997 1998
Eating & drinking places $9,939 $9,507 $8,922 $9,054 $9,356 $9,830 $9,831 $10,057 $10,384 $11,442
Total Retail trade, ex. eat & drink $20,757 $20,398 $19,648 $18,857 $18,636 $19,036 $19,499 $19,702 $20,710 $21,752
Total Services $22,525 $21,216 $20,583 $21,493 $21,592 $23,948 $24,908 $26,490 $30,653 $35,996
Total Nonfarm $28,783 $27,789 $27,313 $27,304 $27,167 $27,928 $28,575 $29,046 $31,504 $33,922
Figure 5
Average Hourly Wages of Eating & Drinking Industry Workers in Washington, 1997
Source: Washington Employment Security Department
35%
30% State
Eating & drinking
25%
Share of Total employment
20%
15%
10%
5%
0%
$26
Average hourly wage
Like many industries, eating and drinking places employ people in many occupations, but a large number
of people are employed in entry-level, lower-skilled (and hence lower-wage) occupations. Common
occupations within the eating and drinking industry include waiters/waitresses, fast-food workers, cooks,
bartenders, food preparation workers, and cashiers.
Table 3
Occupational Profile of Eating & Drinking Industry Workers in Washington, 1998 and 2008
Source: Washington Employment Security Department
Estimated 1998 Projected 2008
Percent of Percent of
Eating & Drinking, SIC 58 Estimated Total Projected Total
Employment Employment Employment Employment
Managerial & Administrative 8,797 5.1% 12,848 5.9%
Professional, Paraprofessional & Technical 663 0.4% 789 0.4%
Sales & Related Occupations 5,802 3.3% 8,352 3.8%
Clerical & Administrative Support 3,298 1.9% 3,857 1.8%
Service Occupations 143,754 82.6% 178,677 81.3%
Production, Operating & Maintenance 524 0.3% 651 0.3%
Operators, Helpers & Laborers 5,207 3.0% 6,836 3.1%
Undefined Occupations 5,969 3.4% 7,729 3.5%
TOTAL 174,014 100.0% 219,739 100.0%
In Washington, more than one in every three retail outlets is an eating and drinking establishment. Unlike
other industries (including other retail trade), nearly one-half of the workers in the eating and drinking
industry are in small businesses with less than 100 employees. More than nine out of every ten eating
and drinking places in Washington employ less than 50 employees in 1998, with the average employment
size of eating and drinking places roughly 15 employees.
Figure 6
Size of Establishments of Washington Eating & Drinking Industry, 1998
Source: Washington Employment Security Department
45%
40%
State
35% Eating & drinking
30%
Share of total employment
25%
20%
15%
10%
5%
0%
1-19 20-49 50-99 100-249 250-499 500+
Number of employees per establishment
Outlook for Eating and Drinking Industry in Washington
The most recent annual forecast produced by the National Restaurant Association highlights Washington
as one of the nation’s growth “hot spots” for the eating and drinking industry. Washington’s eating and
drinking industry sales are projected to far surpass the national average due to the state’s expected
population and income growth as well as employment gains and tourism attractiveness. Washington is
projected to record one of the strongest eating and drinking sales growth rates among all states for 1999.
These robust growth rates in sales will continue to translate into employment gains for the eating and
drinking industry. According to the recently released employment projections report, the employment
level of the eating and drinking industry is projected to increase by 24.5 percent during the ten year period
between 2000 and 2010, substantially higher than the 17.0 percent increase projected for total nonfarm
employment in Washington. Employment growth in eating and drinking is expected to slow during the
second forecast decade (2010-2020) to 15.5 percent, but still faster than the statewide nonfarm
employment (11 percent). The eating and drinking industry will continue to be one of the state’s largest
private employers for many years to come.
Figure 7
Washington Eating & Drinking Wage & Salary Employment Forecast, 2000-2020
Sources: Washington Office of Financial Management, Washington Employment Security Department
300,000
250,000
200,000
Total employment
150,000
100,000
50,000
0
1995 2000 2005 2010 2015 2020