Ive got different types of restaurants where Im from that pay their wait staff by the hour and of course, the restaurants that pay their wait staff through tips & wages. Both types of these restaurants have a wide assortment of food plates on their menu. Some gourmet, some lower end steak houses. Ive also Bar Tended at a Gourmet restaurant, when I was in School, where I would also help with paper work. Costs may go up, but it really only falls down to how much, or how little an owner is willing to make in pure profit from the Restaurant in my opinion.
The place I worked at would make between three and four thousand in profit on a busy day. Busy days ranging from Thursday to Monday at this particular establishment. Tuesday and Wednesday, profits would cut down to one to three thousand, but the wait staff would be drastically reduced on those two days as well. The end of the month, after everything was accounted for (Ive seen as low as 68k and as high as 147k gross), Insurance(6k - Upstairs Dance Floor after 10 jacks this up really high), Rent(3.5k), Utilities(2k), Pay Roll (10-11k'ish), and food costs(30-35k'ish), the guy still made a great deal of money off this one Gourmet Restaurant (He owns four different restaurants in that downtown area). Enough to where the restaurant could pay the 5 waiter/esses, three bar tenders, during the busy days, for a full shift, great fucking wages. Enough to where the opportunity to work there would encourage the wait staff to want to do their best and only hire the best. But thats just a restaurant, that at its worst, charges 45$ for what is essentially a Softshell Crab Eggs Benedict for Brunch. I made good money as a Bar Tender, but there would be days where I would see the wait staff get really bitter towards the Bar Tenders. They didnt even have to tip us out, to put it into perspective. Shits not right.
Also, D, you're right in that the margins for most Alcohol thats kept in the Well has a very low margin. Thats why a good wait staff is going to up-sell to the more expensive liquors and the best of the Wait Staff is going to forego the mixed drinks and cheap wine altogether and sell, at minimum a $90 bottle of Wine to their table. Which is very doable at that location.
Are all restaurants like that? No, and I know that. But I also dont expect a shitty Steak House to be paying their Wait Staff as much as that place "Could". I think its required to tip your waiter/ess or Bar Tender. But that restaurant also made me realize you can do a lot more with less people and you could pay them a reasonable wage.