And is $7.25 a livable wage in Atlanta?

Functionally no, there are a handful of restaurants in places like NYC and LA that have tried it, but part of the problem is that the servers want tips as well (you're gonna have a hard time getting rid of something which the people being affected want).

I said this elsewhere, but any job can ask for tips but that doesn't mean they're making the $2 minimum wage. The cashier at McDonalds and the Barista at Starbucks are making minimum wage. In most cities those positions are making more than minimum wage because of market competition (Ziprecruiter says that the average McDonalds employee in Atlanta makes $12/hour, not that that's a living wage either).

People who are making the $2 minimum wage generally make a lot more than that, and more than the McDonalds or Starbucks employee, because of tips. Tips are generally tax free, the positions are low skill, and if you don't like this type of work or pay you'll generally leave pretty quickly so the position is self selecting.

Here's the math for two situations: 1.) You're a bartender at a lunch pub with 12 spots at your bar, your shift is 10 am - 5 pm, you open at 11 and you'll have on average 50% of the spots taken every 30 min. 7hr x 12 spots x 50% x 2 per hour = 72 customers. The average order will be between $15 - $30 with tip being $2.25 - $4.50 or $3.375 average. So 72 customers x $3.375 + $2 x 7 hours = $257/day x 5 days = $1,285 per week on average. Of that, you only pay taxes on $70 worth.

2.) You're a waiter at an Outback Steakhouse, you have 5 tables, your shift is from 3 pm - 10 pm, you're only really getting business from ~4 - 10 pm. During those hours your tables are 3/4 full and flipping every 45 minutes. 5 tables x 6 hours x 0.75 amount full x 3/2 flip rate = 33.75 customers. On average they are spending $50 - $100 each with tips of $7.50 - $15, average $11.25. So 33.75 customers x $11.25 + 7 hrs x $2/hr = $393.68/day x 5 days = $1968.40 per week on average. Again, you're only paying taxes on $70 worth.

Now, here's the catch, this is an average and assumes the location is very successful. You might instead have a Tuesday where it's raining and you made $60 because no one came in, but then Friday the football game is on and you made $500. Maybe this restaurant isn't pulling in customers so you're not getting that kind of traffic. On paper the job can look very appealing, but in practice it typically falls short of those numbers.

It’s going to vary wildly as to who is paired expecting to be tipped and who isn’t.

Generally no fast food workers are tipped, it’s restaurant/bar only. And restaurants that don’t allow tips will generally advertise it. Off the top of my head I don’t know of any chains that don’t do tipping, but I also don’t eat out much.

As soon as the “no tax on tips” passed my baseline tip dropped 5%.

What about the cooks? Hostess? Other back of house staff?