The restaurant scene in Washington D.C. is a jewel in our nation’s hospitality industry. Built on unique local spots with very few corporate eateries, DC is the epitome of a “foodie town.” But underneath the operational game face of owners and workers, many are finding themselves in defense of their traditions and incomes. Initiative 82 proposes to abolish Washington DC’s tip credit and raise the minimum wage.
The push comes from Saru Jayaraman President of One Fair Wage and Director of the Food Labor Research Center at the University of California, Berkeley, and is supported by the OFW subgroup, DC Committee to Build a Better Restaurant Industry.
The idea of fighting for their livelihoods is not new to owners, operators, and workers in DC’s hospitality community. In 2018 the same labor group, this time under the name Restaurant Opportunities Center, pushed a similar proposal. In the same vein, the purpose of Initiative 77 was to phase out the tip credit. That initiative passed in June 2018 but was vehemently opposed by restaurant workers and employers. The DC city council overturned the initiative that October after a historic 16-hour hearing. Nearly 300 workers, employers, and industry leaders spoke at the hearing, convincing the council to repeal the initiative.
Here We Go Again
One Fair Wage/Restaurant Opportunities Center was not satisfied with the outcome of initiative 77 and is at it again with Initiative 82. They reimagined the tip credit by branding it a “subminimum wage” in hopes to prey on voters’ nescience on the subject. This miscategorization of DC’s tip credit was a sticking point with the local hospitality industry, who pushed back, saying that the initiative title and ballot wording could be misleading to voters. The DC Board of Elections agreed with this statement, and the term was changed to reflect a more accurate description of the “ tip credit” so that voters would have a better understanding of what the initiative actually accomplishes.
DC Committee to Build a Better Restaurant Industry acquired permission from the Board of Elections to begin gathering signatures last year. Paid signature gatherers then collected 25,000 signatures from all 8 of DC’s wards. However, whether they met the signature threshold is in question due to discrepancies like missing voter information or duplicate signatures.
More challenges to I82 have surfaced, with industry workers and organizations filing complaints against the legality of the signatures. Redistricting is one of the more significant issues clouding signature verification, leaving the question of whether the correct data was used in the verification process. They would like an audit to determine if enough verifiable signatures were collected and that the verification process through the Board of Elections was on point. The DC Court of Appeals will hear the case on August 23rd to determine if the signatures qualify and if the initiative remains on the ballot for November.
Will It Pass?
It is hard to tell if voters understand what is actually at stake when voting on I82. The only experience most people have with restaurants is eating in them. They do not understand how our workers get paid. The positive nuances of the tip credit get drowned out by the mislabeling and victim narratives shouted out by labor activists. Explaining to vgoters that a tip credit allows workers to make far above a minimum wage and keeps wages competitive can’t be reduced to a slogan. According to the Bureau of Labor Statistics, the hourly average wage under the tip credit for a DC-tipped worker is $26.54. This is far from being subminimum.
DC’s service industry is busy climbing back from the pandemic and is limited in resources to launch an education campaign to save the tip credit. If I82 isn’t 86’d through the court, it is very likely to pass in November. The impact of raising the wage without the tip credit in place will for certain open a pandora’s box of negative consequences that an already struggling industry will feel.
In the case of voters pushing I82 into law, opponents fear there is not enough support from the DC City Council to repeal it as they did with I77. Councilmember Phil Mendleson has said publicly that he will personally not vote for I82 but will also not vote to overturn it if it comes to the council for a vote. CM Mendleson was a vocal supporter of DC’s service industry and led the charge to repeal I77. Since 2018, the council has changed, with labor-backed candidates replacing more moderate members leaving senior Councilmembers like Mendelson without support to make a bold rejection of the initiative.
Do workers oppose wage hikes?
Most workers are not opposed to raising the minimum wage. With the cost of living skyrocketing it’s not hard to guess that the federal minimum wage of $7.25 no longer is able to sustain an employee’s needs. However, most tipped workers understand that raising the wage without protection to the tipping culture will ultimately lead to them making less.
As we see in the seven One Fair Wage states, workers are suddenly subjected to tip elimination, non-transparent pay models, and service charges as employers navigate wage hikes without a tip credit in place. Customers too are impacted by higher menu prices, surcharges, and confusion on how to tip when a tip line is present. Loss of support staff, hours and restaurant closures also affect both the guests and the employees.
What does “tips on top” mean?
Saru Jayaraman, Director of the Food Labor Research Center at the University of California, Berkely, and the creator of both Restaurant Opportunites Center and One Fair Wage historically pushed for the complete elimination of tipping. She touts tipping as an “unfair pay system” that disproportionately affects women and minorities.
After the I77 defeat in DC, Jayaraman has tried to distance herself from her anti-tipping rhetoric and rebrand to include tipping culture as she calls for the elimination of the tip credit. Her latest slogan “tips on top” is now parroted by wage activists in attempts all around the country to raise wages and eliminate tip credits. The claim that people will still tip the same as they do now with a wage hike may be true in some sense.
However, she conveniently leaves out the negative impacts that have led to the change in pay models, elimination of tipping, and restaurant closures that are occurring in her One Fair Wage states. Sloganeering is a powerful tool to sway voters’ minds as in the example of Initiative 82, but doesn’t stand up to the reality where, in the end, workers lose income and jobs.