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Went to a restaurant in LA today and when I got the check I noticed that it was a bit higher than it should be. Then I noticed this 18% service charge. So... We, as customers, need to help pay for their servers instead of the owners paying their servers a living wage. And on top of that they have suggested tip. I called bs on this. I will bet you that the servers do not see a dime of this 18% service charge. [deleted a word so it wasn't a grammatical horror to read]
Service charge I would presume is primarily paid out to the non-wait staff at the restaurant. The kitchen in particular.
Tips go to the wait staff, and they will pay some of that out to other staff (e.g. front staff) depending on how the restaurant works.
These are going to be separate. The service charge is there so they can increase prices by a tightly controlled amount without needing to fuck up the carefully targeted price points ($8 or $7.99 is a lot better than $9.44). Which is shitty, to be clear: it's a hidden way to increase prices while still advertising the same price. But it's not something that replaces or complements the tip, it's just a shitty price-adjustment.
A waiter or waitress is still going to be dependent on the actual tip.
Why don’t the restaurants just pay actual living wage then?
That’s a good question, and the easy answer is ‘they should.’ As the commenter above you mentioned, they use it as a tactic to advertise the same (competitive to other local restaurants) price people are used to. A more transparent way of doing business would be raising the price of the menu items to compensate staff fairly. The restaurant owners/management fear that if they do this it would drive away customers who believe the food is overpriced and look to their competitors. It’s easy to say, ‘just pay the staff a fair wage,’ but not quite as easy in practice. Most restaurants are small businesses just barely scraping by. The OP is right to be annoyed, but as always, context and a basic understanding of a situation’s underlying principles make the easy answer difficult to implement.
Put a banner outside saying "no gratuity necessary, the price you see is the price you pay!" and watch what happens.