In a measure restaurant owners plan to fight, voters in Washington, D.C. decided earlier this week in favor of raising the minimum wage for tipped employees to $15. The vote in favor of Initiative 77 gives restaurants until 2025 to raise tipped staff’s wages to $15 per hour, the same as non-tipped employees.
The Washington Post reports restaurant owners vow to continue opposing the measure, taking it to City Council in hopes of a reversal. Restaurants say the requirement to pay tipped staff a $15-per-hour minimum wage would destroy their already narrow margins and cause prices to rise. They speculate that customers will see higher check prices but will continue to tip, leading them to dramatically scale back on the frequency of restaurant visits.
Currently, in D.C. as in many other states, it’s legal to pay tipped employees less than the standard minimum wage (tipped minimum wage is $3.33 in D.C.), with the idea that tips make up the difference. If tips don’t elevate the employees’ wages to $15 an hour, then restaurants are required to make up for the shortfall.
Proponents of the ballot initiative saw the vote as a victory, saying a uniform minimum wage will reduce sexual harassment of workers and lead to better lives for women and minorities.
“The voters made history, recognizing that living off tips alone means living in poverty for way too many women, people of color and immigrants,” Saru Jayaraman, founder of the New York-based worker-advocacy group that spearheaded the initiate, said in a statement.
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A 2017 poll showed almost half of Americans favor getting rid of tipping and raising wages, while 36 percent prefer the current system. This piece from Quartz neatly lays out the economic reasons that tipping is outdated, and examines some of the potential consequences of a higher minimum tipped wage. One of the conclusions of its analysis is that cheaper restaurants have the most to lose from paying a higher minimum wage, since their customers are more budget-conscious.
Best to brush up on the background to this debate now, as arguments over tipping are likely to drag on in other cities and states as they have in D.C.