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Will it lead to more predictable income or end up suppressing wages?  

Tim Nelson
June 18, 2018

There’s been a lot of talk (and rightfully so) about wages and working conditions in the restaurant industry recently. The “Fight or $15” has begun to boost the minimum wage in municipalities like Seattle and Washington DC, but longstanding restaurant industry practices and policies have meant that some workers get left behind. This week, though, District voters will have the chance to decide whether or not the restaurant industry should fall in line with other businesses when it comes to minimum wage.

Known as Initiative 77, DC’s June 19th primary will give voters the chance to decide if tipped workers at bars and restaurants should be treated the same as other employees when it comes to enforcing the minimum wage. According to a sample ballot, a yes vote would “gradually increase the minimum wage for tipped employees so that they receive the same minimum wage directly from their employer as other employees by 2026.” As it stands now, DC restaurants and bars can pay employees as little as $3.33 an hour so long as they hit the $12.50 minimum wage threshold when tips are counted. The non-tipped minimum wage for DC will hit $15 by 2020 and $5 for tipped employees, so the measure’s timeline would give restaurants and bars opportunity to prepare.

Those who support Initiative 77 include service worker advocacy groups like Restaurant Opportunities Centers United, who helped get it on the ballot. Proponents argue that this policy would introduce a measure of predictability and stability to restaurant worker wages, especially at certain chain restaurants and smaller business. The measure could also improve working conditions for women, who ROC United says are twice as likely to endure sexual harassment from customers in states where a separate tipped minimum wage exists. It might also introduce a greater balance between front and back of house staff by putting everyone on a more level playing field.

Initiative 77 could also act as a safeguard against wage theft. Though they’ve since backed away from it, the Trump administration’s potential plan to end tip pooling this past winter could have allowed owners to collect and hoard their employees’ tips. Initiative 77 would mean more money in an employee’s paycheck, introducing formality to a pay process that currently leaves room for exploitation.

Of course, Initiative 77 is not without its opponents. According to Washingtonian, more than 100 bar and restaurant owners have signed a letter imploring the District to vote “no,” and a number of restaurant and bar workers worried about potential pay cuts have joined them. Those against 77 claim that tipped workers often earn far more than $15 an hour, and that this policy would effectively create an artificial wage ceiling. The owners also assert that increasing their payroll burden could ultimately mean fewer shifts and less take-home pay for those on staff.

So far, the data on that latter argument is mixed. Shake Shack founder Danny Meyer admits he lost 30 to 40 percent of his legacy staff after eliminating tipping at his Union Square Hospitality Group restaurants. But a more macroeconomic study published by Cornell’s School of Hotel Administration suggests that doing away with the two-tiered tipping wage system wouldn’t be as harmful as the restaurant industry seems to think.

Though Initiative 77 may seem unprecedented, it’s actually the newest front in a nationwide movement to standardize the minimum wage. Seven states (including the entire west coast) operate with a universal minimum wage, and New York’s Department of Labor is currently exploring the idea of a single-tiered minimum wage at the behest of governor Andrew Cuomo. If adopted, Washington DC would be the first major municipality on the east coast to follow such a policy.

So what will happen? It’s possible that Tueday’s results are just the beginning of a longer process. DC Mayor Muriel Bowser has come out against Initiative 77, as have many members of the DC Council, so there’s always the chance of legislation to amend or even overturn the policy if the ballot measure passes. A “yes” victory in DC would also likely capture the attention of federal lawmakers, and it’s certainly possible that democrats would explore the issue more closely should they retake the house and/or senate this fall.

The broader minimum wage alignment debate will likely continue to rage on in the months and years ahead. But with many DC restaurants sporting signs declaring their position for or against Initiative 77, the ballot measure has already brought the conversation around restaurant wage concerns and working conditions to a large swath of the dining public. Regardless of outcome, that will hopefully go a long way towards eventually getting things right.  

 

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