In November, District residents will be voting on ballot initiative 82, which would gradually phase out the subminimum wage paid to tipped workers over five years. Adopting this would mandate that all employees are paid at least DC's minimum wage by their employers. To be absolutely clear — this would not eliminate tips or tipping, but ensure that tips received on the job on top of the base wage paid by the employer. (Full text of the initiative can be found on the Build a Better Restaurant Industry website.)
Eliminating the subminimum wage is not a new or radical proposal: seven US states do not have a subminimum wage, and service industry workers there enjoy higher wages, face less harassment on the job, and are less likely to live in poverty -- and there’s a lot of research to back this up. If you’d like to dive in yourself, a good place to start is this 2018 collection of research on the tipped minimum wage from the Economic Policy Institute, which clarifies the positive effects on worker earnings. A recent 2021 study from the Center for American Progress also expands on the race and gender inequities perpetuated by the tipped wage credit — ending it would empower workers to stand up to on-the-job harassment and bulwark their earnings against biased or stingy customers. One Fair Wage, a labor advocacy organization, has also curated a deep bench of research on the subminimum wage.
By standardizing the pay-structure paid to employees in the industry, workers would be better protected against wage theft, which is rampant in the industry. A Department of Labor investigation from 2010 to 2012 identified 1,170 tip credit infractions worth almost $5.5 million across 9,000 restaurants in the US. But we don't have to look far to find evidence of the practice. In 2020, Matchbox and Ted’s Bulletin were required to pay more than $142,000 in unpaid wages to over 100 workers as part of a settlement with DC’s Attorney General. In 2020, a chain of restaurants in DC and Virginia owned by the Meija Corporation were required to pay back $848,006 in back wages to over 209 employees following an investigation from the US Department of Labor. In 2018, Farmer Restaurant Group agreed to pay over $1.49 million in back-wages owed to 962 current and former workers over a four year span. (Farmer Restaurant Group and its affiliates have contributed over $ 39,999 in opposition to I82).
Can restaurants and bars shoulder an increase in labor costs?
Well, many restaurants in DC have already begun paying tipped staff above the mandated minimum in order to pull staff back into the industry and to curate a motivated workforce. So the concern, while reasonable, feels moot. But if you're still skeptical, I urge you to take a look at this study released just two months ago by the US Census Bureau; this study observed the effects of increasing the tipped minimum wage on workers and businesses. The dataset used here is incredible: It includes every worker at every restaurant in the US between 2005 and 2018 — making it one of the most detailed observations on the effects of minimum wage laws on different types of workers. This study found that increases to the tipped minimum wage boost both worker-earning and tips without having any effect on business closures. Though a decrease in the rate of hiring new tipped workers was observed, this is because employee exit decreased following increases to the tipped minimum wage, reducing turnover and instability in restaurants. Who knew- paying workers more makes them less likely to leave their job!
Any honest assessment of the data on the tipped wage should assuage any skeptic on the benefits to moving beyond it. Yet, we’ve been here before.
In 2018, DC voted to approve Initiative 77 – a broadly similar ballot initiative that would have gradually ended the subminimum wage in the District. Despite a positive outcome – 55-45 percent in support of the measure, with highest turnout in DC’s working-class wards – the DC Council overturned the will of voters and struck down the initiative following pressure (and donations) from corporate lobbyists. The Council cited an insulting logic — that voters couldn’t read or didn’t understand what they were voting on — as justification for their coup. (You can read a recap of the Council’s anti-democratic action in the Washington Socialist.)
Following the Council’s veto, legislation was passed to address service worker concerns over rampant wage theft in the industry. However, the enforcement mechanism initiating this was never funded and the legal requirements for enforcement were so convoluted that some payroll companies have been threatening to leave DC altogether rather than deal with this bunk process. The Council and business lobby’s failure to meaningfully address the core issues facing tipped workers plays a large part in propelling this remixed initiative: Adopting clearer working conditions would standardize working-conditions in an industry notorious for exploiting inexperienced and desperate people to depress labor costs.
The outcome of this initiative is unlikely to follow the same fate as I77: one councilmember (Bonds, At-Large) has switched their position on the matter; two of the councilmembers (DC’s Ward 4 and 5) who opposed the initiative have been replaced by DSA members who publicly support it; all candidates running in this year’s at-large election vowed to respect the outcome of the initiative; and Council Chair Phil Mendelson – who helped engineer I77’s repeal – has gone on record saying that he’ll support the outcome.
Support for ending the subminimum wage also enjoys wider public support than last time. The pandemic shuffled many impressions on the subminimum wage. Many both inside and outside the industry saw just how vulnerable service-sector workers are to economic disaster. (Consider that many tipped workers, due to the low wages paid out by their employers as a result of the tipped minimum wage, were excluded from relief funding – this would have been avoided for DC workers if I77 wasn’t repealed). Polling released by supporters of I82 confirms that workers in the industry are also more supportive of ending the subminimum wage than they were before.
Regardless, the business lobby is as entrenched as ever. So far, the “No on 82” campaign has raised $404,209 dollars. Despite big cash reserves, the campaign appears to be phoning it in. Maybe that's because they dumped most of their early funding on legal fees in a desperate attempt to kick the initiative off the ballot on nonsensical grounds. (Though the opposition succeeded in pushing back the vote onto the general election, this actually played to the benefit of I82’s supporters — activists and workers more time to build support and conduct worker outreach.) The opposition campaign is now throwing money at a network of bargain-bin consultants to scare workers and regurgitate corporate-friendly talking points.
A similar consortium of corporate elites and sloppy spin-doctors hatched the opposition campaign pointed against I77, which at the time was led by right-wing lobbyists and allies of then-President Trump. This group developed a rumor mill designed to intimidate workers, deceive the public, and spread high panic and paranoia. That playbook is unlikely to work this time: the opposition is too far behind and the right-wing scare tactics deployed are stale and unconvincing in deep-blue, pro-labor DC.
By comparison, the pro-82 campaign being run by Build a Better Restaurant Industry is fresh, uplifting and well organized. The campaign has a deep base of volunteers, strong tethers to workers inside and familiar with the industry, and wide support across the District (I82 is endorsed by a vast range of community organizations, elected officials, and labor unions).
The Democratic Socialists are also involved in the effort, and have played a crucial role in getting the initiative on the ballot. The DSA’s early-2022 canvassing mobilization was vital in securing I82's ballot access: Fifty volunteers organized through the DSA braved freezing temperatures to collect over 1,500 signatures. Without this boots-to-pavement mobilization, the initiative may have fallen short of requisite signatures; the initiative was submitted to the Board of Elections with 27,026 signatures, just 1,000 over what was needed.
DSA members being organized through its labor working group are also shouldering their own pre-election turnout and public outreach campaign. Canvassing operations began on September 24 and will continue on weekends leading up to election day. Keyboard warriors have been building digital support for the initiative and advocating benefits on social media. Opposition research on prominent public figures aligned against the initiative has been released to educate the broader public on corporate hypocrisy. And members have been coordinating with workers in the industry to collect and share testimony.
But the outcome is, of course, ultimately up to the people of DC. The deeper question posed by the initiative to voters is really an ethical one: How willing are we, as a city, to expose workers to wage theft, abuse, and discrimination as a factor of legitimate business?
