The employer is required to make up the difference if a tipped employee makes less than the minimum wage (7.25 or higher) - though sure, that's maybe not a livable wage.

Honestly, though? I worked at a restaurant ($10 buffet) for six years and most of my friends work in the industry still. Almost all waiters make out much better than the rest of the kitchen staff. Additionally, many establishments (especially mom and pops) encourage waiters to report the minimum amount necessary (whatever works out to minimum wage) for taxes.

I wouldn't feel any worse for your waiter than for the guy who cooks your burger.

Bizarrely, though, waiters are much more vocal than the rest of the staff about their wages.