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Why these DC workers want a lower minimum wage

Online Niel November 22, 2024

When union activists came to DC demanding higher wages for restaurant workers, they ran into an unexpected adversary: restaurant workers.

A few decades ago, waiting tables or bartending in the nation’s capital could be quite lucrative. “The money was amazing. At the end of a good shift at the bar, what some people had to spend a whole week scraping in an office from nine to five, I could do that in one night,” says Damon Dixon, a restaurant worker for 30 years. years.

In 2016, a national movement began pushing to raise the minimum wage to $15 an hour. But tipped D.C. employees, including servers and bartenders, were not affected, thanks to a rebate that allowed restaurants to pay employees a fraction of the minimum wage as long as their tips covered the difference. Known as the “tip credit,” this policy is common in the US

Labor activists aimed to eliminate tipping, arguing that workers should receive the full minimum wage on top of any tips they earned. Saru Jayaraman, Founder and Chairman of A fair salaryled the movement.

When D.C. voters passed a referendum to eliminate the tip credit in 2018, the city council overturned it at the urging of restaurant workers. “The tipping system works well for everyone. It works well for guests to show their appreciation directly,” says Joshua Chaisson, a bartender who leads the advocacy group. Restaurant Workers of America. “Most importantly, it allows us to maximize our revenue.”

According to the Bureau of Labor Statistics, in 2022 DC waiters and waitresses made an average of $50,790 per yearincluding tips — the highest pay for restaurant workers in the country. Asked about this figure at a local press conference, Jayaraman said Reason that the data was wrong. “We have a research department. We look at the Bureau of Labor Statistics. We look at Square, which tells you how much people make in tips. It’s not true. I’m happy to send you the data,” she said. Her team did not respond to a follow-up request.

One Fair Wage got the measure back on the DC ballot in 2022 and passed by a wide margin. “Seventy-five percent of them voted because it was a free toaster,” says Geoff Tracy, owner of two DC restaurants. “I would say 98 percent of voters don’t understand the compensation structure for full-service restaurants.”

The elimination of tipping is being phased in, but restaurants are already feeling the pressure. Tony Tomelden — owner of The Pug, a beloved dive bar — says he feels the tension. “It’s daunting trying to figure out how to accomplish all these goals,” he says. “For the first time in 17 years, we raised prices.” It is currently required to pay $10 an hour, double what it was two years ago. By 2027, the probability will increase to about $18 an hour before tips.

Meanwhile, Tracy estimates the salary increase will add $400,000 to his payroll per location each year. “It’s like doubling my rent,” he says, adding that those costs will inevitably be passed on to customers.

“We’re looking at a beloved bar back, a beloved bus, a dishwasher, jobs being taken,” says restaurant worker Valerie Graham. “Not because the owner-operator is an evil billionaire, but because he’s an independent business owner who had to make some business decisions, and there’s an insensitivity with which our industry is talked about.”

Jayaraman argues that the restaurant closings and job cuts in DC are not caused by the elimination of the tip credit. “Since the initiative, more restaurants have opened, more workers have been hired,” she explains, referring to a report that One Fair Wage published last year, titled “The Sky Is Not Falling; the Floor Is Rising”.

While restaurant employment initially rose after the measure passed, jobs fell by 4.3 percent from their peak in December, according to Federal Reserve data.

Jayaraman disputed those numbers as well. “If you look at the government data that the DC attorney general approved, we have 10 percent more restaurants in the District of Columbia, seven percent more restaurant jobs and 6.8 percent higher wages. And this data was confirmed by The New York Times in April this year,” she said Reason.

The New York Times article that she cited (actually published in March) actually contained inaccuracies about the number of restaurant employees in the District. When Reason he asked Times about errors, the paper made a correction.

As D.C. restaurant jobs decline, some establishments are introducing “service charges” to help cover salary expenses. However, servers often take home less, and some believe the policy limits their earning potential.

Voters, Dixon argues, are “in a savior complex trying to save people who didn’t need saving in the first place. Advice is the main reason I got into this industry.”

Despite dictating how restaurants should operate, Jayaraman has yet to manage a successful restaurant. In 2006, a group he co-founded – Restaurant Opportunities Center –launch a New York establishment called Colours, which tried to pay his salary on the lines Jayaraman demanded. It quickly ran into financial problems, cut wages, faced lawsuits, and eventually closed. The other two restaurants of the group also failed.

One Fair Wage aims to end the tip credit in at least 25 states by 2026. Those jurisdictions would do well to take note of what’s happening in DC. Previously thriving businesses now face closures, vacant storefronts, understaffing and rising prices.

“Put the pieces together in the puzzle,” says Graham, “and we can see that this doesn’t work.”

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