4 days ago
Eliminating the tipped minimum wage was a mistake. Repeal Initiative 82.
One can sympathize with D.C. residents who, in 2022, overwhelmingly voted to eliminate the tipped minimum wage in the city. Proponents sold the measure — known as Initiative 82, which passed with nearly 74 percent of the vote — as a policy to guarantee restaurant servers a 'living wage.' Instead, it is proving to be an economic disaster.
With restaurants closing, laying off workers or warning that they are on the verge of financial ruin because of rising payroll costs, the D.C. Council voted 8-4 on Tuesday to pause minimum-wage increases for tipped workers, which have been rolling out in phases since May 2023. The next raise, to $12, was slated for July.
Pausing the policy was the right call. Now, the council should take the next step and repeal it entirely, as D.C. Mayor Muriel E. Bowser (D) proposed in her 2026 budget.
D.C. lawmakers should rarely overturn voter-approved policies. Should a repeal pass, it would be the second time the council overturned the will of voters on the issue, having repealed a measure that passed in 2018 with 56 percent of the vote. The council's vote on Tuesday provoked intense backlash from activists, who disrupted the meeting multiple times with booing and yelling. One declared the decision a 'betrayal' of service workers. Council member Brianne K. Nadeau (D-Ward-1) stressed that D.C. residents were 'counting on' the raise.
Yet Initiative 82 is a case study example of when council action is justified — indeed, essential, if the D.C. hospitality industry is to survive. The argument that District restaurant employees failed to receive livable wages was never accurate. Nor is it true that eliminating tipped wages would make servers more financially stable. Before the initiative went into effect, the minimum wage for tipped workers was set at $5.35 an hour, with tips covering the rest of their income to reach the city's standard minimum wage, which is now $17.50. If that didn't happen, employers were legally required to make up the difference.
Some servers now complain that the initiative has resulted in them making less money because many customers now pay less in tips. And that's if they're eating at D.C. restaurants at all. Many restaurants are adding irritating service charges to cover the higher payrolls costs, which has pushed fed-up diners to competitors outside the city.
Most restaurants — especially smaller ones — operate on thin margins, so multiple increases in pay for their staff within a short period can be toxic. Initiative 82 it hitting them as other economic factors bite into their business: inflation, tariffs and a sagging regional economy due to widespread job losses among federal workers.
Proponents of the initiative often point out that the number of D.C. employees working at restaurants has grown since the policy took effect, according to data from the Bureau of Labor Statistics. But many factors can affect job numbers, including the industry's long-term recovery from the pandemic — which might have been more robust without Initiative 82. In fact, the data suggests that job growth in full-service restaurants slowed significantly in the District as soon as the policy was implemented.
That fact should make all elected officials uneasy. Beset by new economic challenges, the city needs a pro-growth agenda. A haphazard attempt to restructure how restaurants have long done business is the opposite of that.
