The Tipping Point

Gun Rights

In Washington, D.C., and 43 states, restaurants and other businesses with tipped workers are not required by law to pay the full minimum wage outright, a concession to the restaurant lobby that goes back decades. Instead, employers can credit a portion of a worker’s tips toward their obligation to pay minimum wage. But D.C. may soon join the small group of states—California, Minnesota, and Oregon among them—to eliminate this anachronistic system. This November, D.C. will vote on Initiative 82, which would gradually increase base pay for tipped workers over five years from $5.35 until it reaches the District’s regular minimum wage, currently $16.10.

D.C.’s dining scene, replete with celebrity restaurateurs and two dozen Michelin-starred restaurants, is one of the country’s most celebrated. But proponents of I-82 say the industry’s growth was built on an artificial labor subsidy that exploits workers. “Tips were intended to be an extra or bonus on top of a wage, not your primary source of income,” Saru Jayaraman, the president of One Fair Wage, the national organization leading this effort, says. “Fundamentally, what is wrong with the system is the employers are not paying for the cost of the labor.” Experts say the maddening unpredictability of wages from week to week makes long-term financial planning difficult for restaurant workers. “A system that’s built on customers’ whims for supplying the bulk of a person’s income just leaves a lot up to chance,” David Cooper, an economist at the Economic Policy Institute, says. Leaving pay to the vagaries of customers means that Black and female restaurant workers in Washington get smaller tips than their white and male counterparts.

Federal law requires employers to make up the difference between the tipped wage and the standard minimum wage if tips fall short, but a 2012 Department of Labor compliance sweep of nearly 9,000 restaurants found 1,170 tip credit infractions. A full 84 percent of restaurants had some type of labor violation. Workers attest to this. “Something you sign up for when you sign up for this industry is you know that not all of the labor laws are going to be honored,” Gillian Michalowski, a bartender at the downtown hotel bar Allegory, says. Simplifying the system by guaranteeing all workers the minimum wage up front would directly combat wage theft.

A poll commissioned by One Fair Wage, which is also running similar campaigns in Maine, New York, and several other states, found that 88 percent of D.C.’s tipped workers support I-82. Voter support, too, is high. 

You Might Like

But the interests arrayed against the initiative are formidable. The “No to I-82” committee, backed by the National Restaurant Association (NRA), a lobby group, spent months unsuccessfully suing to keep I-82 off the ballot, and a spokesperson with the campaign confirmed that they’ve exhausted all judicial means of stopping the initiative. But the fight is far from over: The committee has nearly 10 times as much cash on hand as the sponsors of I-82. High-profile restaurateurs like José Andrés are determined to see the initiative killed. “Now the focus really turns to a broader education campaign,” the NRA spokesperson said—a public relations blitz. 

Their case to voters will rest on the charge that a higher minimum wage would actually drive down workers’ earnings and hurt smaller restaurants. “You couldn’t really ask a business that has pretty low margins to all of a sudden scrape together an extra $500,000,” says Geoff Tracy, chair of the No to I-82 committee and the owner of the eponymously named Chef Geoff’s. “Service charges would have to offset those costs.” Few customers, he told me, would tip on top of a service charge, and workers would bear the consequences.

To veterans of this fight, that’s a familiar argument—and a notoriously effective one.

In 2018, a group of activists collected enough signatures to get Initiative 77, the first incarnation of I-82, on the ballot. For months ahead of the election, the NRA and other industry groups poured thousands into Save Our Tips, a so-called astroturf organization masquerading as a grassroots, worker-led campaign. Tracy’s service charge argument was its core premise. “You’d see signs up in every restaurant that said, you know, ‘Save our Tips,’ ‘Vote No on Initiative 77,’ stuff like that,” says Max Hawla, a D.C. bartender then working at Bar Charley, an upscale Dupont Circle mainstay. “No on I-77” earned endorsements from Washington politicians and celebrity chefs.

The Restaurant Workers of America (RWA), a small, mostly white group of bartenders opposed to I-77, made up another arm of this campaign. Their representatives authored an op-ed in The Washington Post and received favorable write-ups in BuzzFeed News and other publications. News outlets seldom mentioned their shady relationship with the restaurant lobby, or that the group was a poor representation of the D.C. restaurant workforce, which is majority Black and Hispanic and includes many servers and bussers who make little in tips. (At the time, tipped workers in D.C. averaged just $14.41 an hour including tips, and were three times as likely to be below the poverty line as the workforce as a whole.)

The  opposition campaign went to great lengths to reach workers. The preferred digital gathering spot for D.C. restaurant workers is District Industry, a private Facebook group that requires Washington-area residency for members. “Maybe a month and a half before the midterm election that year, a lot of content on that Facebook page started to really blow up against Initiative 77,” Hawla told me. Screenshots shared with the Washington Monthly show that this was driven in part by posts from out-of-state members of the RWA. For example, the RWA’s founder, Joshua Chaisson, who helped reinstate Maine’s tip credit in 2017 before arriving in D.C., posted regularly in the group that spring and summer.

The Vote No campaign unified owners, managers, and well-paid bartenders against I-77. It instilled a stigma against the initiative among workers. “They really fell for the closed-door arguments that management was feeding,” Ryan O’Leary, the lead organizer of I-82, told me. That included Hawla, a 29-year-old graduate of American University. “I was very staunchly against Initiative 77,” Hawla said. “I was convinced that if the tip credit went away, I would lose tips.” He assumed that what was best for restaurant owners was best for him. “I need restaurants to have a job,” he remembered thinking. “And the National Restaurant Association was ensuring that I’ll have one by defending restaurants.”

Despite the astroturf campaign, in June 2018 I-77 passed the ballot referendum, with overwhelming support from the city’s majority-Black wards. (Only wealthy, mostly white Ward 3 voted against it.) But D.C.’s NRA affiliate launched a furious counteroffensive to get the city council to repeal the measure. It worked: Three months later, the council chair, Phil Mendelson, whipped the votes to defy the will of the voters and overturn the measure. ​​His justification echoed the industry line. “What is most troubling is that a supposedly progressive initiative to benefit workers instead will hurt workers,” he said at a hearing.

D.C.’s failed campaign fit a familiar pattern. In November 2016, Maine voters passed a ballot measure to eliminate the tip credit. But the following June, the state legislature capitulated to lobbying pressure and repealed the measure, reinstating the tipped wage. In Michigan, before residents could vote on a 2018 ballot measure to eliminate its tipped wage, the state legislature took action, preempting a potential yes vote by increasing the state minimum wage to $12 before amending the law to keep the tipped wage at 38 percent of the standard one.

Hawla was glad to see I-77 overturned. But 18 months later, the pandemic upended his industry. Two-thirds of workers reported not receiving the full wages they were owed (including vacation and sick day payouts) before they were laid off. When restaurants began reopening, long-standing problems in the industry were magnified. “People were really not tipping well,” Hawla said. “More of the people who came out during reopen were shittier customers, because they were the customers who didn’t care about COVID.” Polls backed up what Hawla saw that year—nationally, 78 percent of all tipped workers and 88 percent of Black tipped workers said they received less than half as much in tips during the pandemic than before. Patrons punished servers with smaller tips when they were asked to comply with COVID guidelines, and rates of sexual harassment went up, as well.

Congress made unemployment benefits available for restaurant workers. But language barriers and immigration status made accessing those benefits impossible for many kitchen workers in particular. Margarita Crespo, a 47-year-old cook and kitchen manager at a Mexican restaurant in D.C.’s Shaw neighborhood, was one such worker ineligible for unemployment benefits. Crespo instead found the Restaurant Opportunities Center (ROC), an organization affiliated with One Fair Wage, which provided her with the resources to get by.

When she returned to work, her employer had switched to a takeout-only model. “We do all the work,” she told me with the help of a translator. “The front of the house is just, like, answering the phone.” This made it all the more frustrating that kitchen workers legally cannot share in the tip pool. If the tip credit was eliminated, she learned from ROC, that rule would end, and back-of-house wages would rise—a fact even opponents of eliminating the tip credit concede. Crespo recalled thinking that the debate over I-77 had largely ignored the “Black and brown people in the back of the house,” who stood to benefit as much as bartenders and servers. “We’re essential workers,” she said. “We’re part of this economy.”

In September 2020, Hawla attended a Labor Day rally hosted by ROC. “I remember they had signs that said, ‘Stop the Other NRA,’ ” he said. “You know, referencing the National Rifle Association.” Across the country, NRA lobbying had siphoned off most of the first federal restaurant pandemic package to national chains instead of independent restaurants, which shuttered in droves. It made the lobby’s fear-mongering about the mass closures and layoffs that I-77 supposedly would have caused for smaller establishments seem duplicitous. “Maybe they don’t have my best interests in mind,” Hawla remembered thinking.

Later that month, Hawla was visiting Seattle when he struck up a conversation with a bartender at a cocktail bar. Washington State is one of the seven states without the tip credit. “I asked the bartender, ‘How do you like not having a tip credit?’ ” Hawla told me. “And he said, ‘What’s a tip credit?’ ” Hawla explained the concept. “He just went, ‘That sounds so stupid.’ ”

Hawla learned that the bartender’s higher base pay meant that his total wages after tips were much higher than Hawla’s own. The Seattle bar didn’t have any kind of service charge, and tips remained reliably high. “That moment, I was like, ‘Holy shit, I’ve been lied to,’ ” Hawla said. When organizers announced the petition that would become I-82, Hawla signed it.

In fact, a 2018 study found that Seattle bartenders and servers make 7 percent more per hour than those in D.C. Nationally, median hourly wages including tips are about 20 percent higher in states without the tip credit. Tipping in states across the country varies little—between 15 and 17 percent—and is only minutely higher, on average, in states with the tip credit, though D.C., at 14.9 percent, has the second lowest tip percentage in the country.

Likewise, it’s unlikely that I-82 would mean the sudden spread of the tip-killing service charges or the layoffs employers warn about. “There has never been any state in which a raise in tipped workers’ wages has resulted in a majority of restaurants switching to service charges,” One Fair Wage’s Saru Jayaraman told me in an email. Growth in the number of full-service restaurants in universal-wage states has typically tracked or exceeded that in states with the tip credit, which Cooper, the economist, attributes to less turnover and greater productivity among better-compensated workers. And a study on 20 years of changes in tipped wage policy throughout the country found “small, insignificant effects of the tipped wage on [full-service restaurant] employment.”

Rather than close their doors or lay off half their staff, restaurants in D.C. will likely do what they always do: adapt. “When the cost of anything goes up, outside or excluding labor, you never hear this complaining and bemoaning from business owners,” O’Leary, the I-82 organizer, told me. “They make it work. Price of meat goes up, you have more vegetarian options.”

Many high-earning bartenders still oppose I-82. “You are able to make as much money as you are able through your ability, your knowledge, your passion, your work ethic as a tip worker,” says Zachary Hoffman, a D.C. bartender and manager who helped organize the Vote No on I-77 campaign. “It’s worked for me. It’s worked for thousands of other people.”

But it hasn’t worked for everyone.

Nearly 1 million restaurant workers never came back to the industry after the start of the pandemic, including 18,000 in D.C.—an exodus years in the making. “Finally, workers are, in this very historic way, saying, ‘I’m done,’ ” Jayaraman said. “ ‘That’s it, I am not going to put up with this anymore.’ ”

Black workers have left the industry at three times the rate of their white counterparts. Debbie Ricks, a veteran server in D.C., told me that by March 2020, she’d put up with disrespectful customers for years. “I’ve definitely waited on white people who you could tell it was like, ‘We kind of wish our waitress was white or blond,’ ” she said. “Customers were just a huge drain on my soul.” At one restaurant, an assistant manager confided that the house had been taking a portion of the tip pool. Ricks, 44, was working at the ping-pong bar SPIN DC when COVID hit and the staff was furloughed. “It wasn’t until 2020, when I lost my job, when it kind of became a wakeup call for me,” she told me. She never went back. “I have a right to self-preservation,” she explained.

The swing of the pendulum toward labor having more bargaining power—restaurants’ need for staff is far more desperate today than in 2018—could give the initiative’s supporters the upper hand. Already, One Fair Wage counts more than 130 restaurants in D.C. that now voluntarily pay tipped staff at least the regular $16.10 minimum wage in order to attract workers. Most city councilmembers, including Mendelson, say they won’t repeal I-82 if it prevails in November. 

This year will be a decisive juncture for this movement: The tipped wage is also back on the ballot in Portland, Maine, and a court ruled that Michigan’s universal minimum wage will be reinstated this winter. “All three places that were taken away from us in 2018, we’re winning in 2022,” Jayaraman said. “This is a moment of redemption, not just for D.C., but for all the places that won it and it was taken away unconstitutionally, undemocratically.” 

Workers share her optimism. Hawla sees a new interest in change compared to 2018, even among the cocktail bartender crowd. “We’ve all kind of come out of the lie we were living,” he said. He’s begun talking to colleagues about I-82 and appeared in a recent promotional video.

I-77 had barely registered to Ricks in 2018, but after finding work as a freelance photographer for ROC, she helped the group collect signatures for I-82. “People deserve higher wages,” she said. “It kind of takes away some of the power of customers who feel like, ‘I own you because I’m paying your wage.’ ”

Crespo, the cook who could not access unemployment benefits, described feeling energized by the movement for I-82. “What we want is respect and dignity for workers,” she told me. “I’m fighting for my friends, I’m fighting for my coworkers.” More than ever, when she sees exploitation at work, she feels empowered to step in.

“I know that I’m right,” she said. “And I know my rights.”

Our ideas can save democracy... But we need your help! Donate Now!
You Might Like

Articles You May Like

Wyoming: Gun Owner Credit Card Data Privacy Bill Passed in the Senate
8 people killed, one injured, in head-on collision in California
Supreme Court weighs Trump ban on gun ‘bump stocks’
NRA chief Wayne LaPierre found liable for financial misconduct
Kyle Rittenhouse’s drama with Republican heats up

Leave a Reply

Your email address will not be published. Required fields are marked *