Why These Workers Want a Lower Minimum Wage
When labor activists came to D.C. demanding higher wages for restaurant workers, they clashed with 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 bar shift, what some people had to spend an entire week scraping in an office nine to five, I could make that in a night,” says Damon Dixon, a restaurant worker of 30 years.
In 2016, a national movement started pushing to raise the minimum wage to $15 an hour. But D.C.’s tipped workers, including servers and bartenders, weren’t affected, thanks to a carve-out that let restaurants 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 across the U.S.
Labor activists aimed to eliminate the tip credit, arguing that workers should receive the full minimum wage on top of any tips they earned. Saru Jayaraman, founder and president of One Fair Wage, has led 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 everybody. It works well for guests, for them to show their direct appreciation,” says Joshua Chaisson, a bartender who runs the advocacy group Restaurant Workers of America. “Most importantly, [it] allows us to maximize our income.”
According to the Bureau of Labor Statistics, in 2022 D.C. waiters and waitresses were making on average $50,790 a year, including tips—the highest wage for restaurant workers in the country. Asked about this figure at a local press conference, Jayaraman told Reason that the data were wrong. “We have a research department. We look at the Bureau of Labor Statistics. We look at Square, which tells you how much people earn in tips. That’s so not true. I’m happy to send you the data,” she said. Her team didn’t respond to any follow-up requests.
One Fair Wage got the measure back on D.C.’s ballot in 2022, and it passed by a wide margin. “Seventy-five percent of them voted for it because it was a free toaster,” says Geoff Tracy, the owner of two D.C. restaurants. “I would say that 98 percent of voters don’t understand the compensation structure for full-service restaurants.”
The elimination of the tip credit is happening gradually, but restaurants are already feeling the pressure. Tony Tomelden—owner of The Pug, a beloved dive bar—says he’s feeling the strain. “It is daunting trying to figure out how to make all these ends meet,” he says. “For the first time in 17 years, I raised prices.” He is currently required to pay $10 an hour, double what it was two years ago. By 2027, that will likely climb to around $18 an hour before tips.
Meanwhile, Tracy estimates the wage hike will add $400,000 to his payroll per location each year. “That’s like doubling my rent,” he says,
Article from Reason.com
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