By Emily Russell
December 10, 2018
WASHINGTON– 22-year-old waitress Hannah Walsh stood on 16th street in the hot summer rain outside her polling place on June 22, urging voters to vote no to the bill she worried would change her career path just as it began.
Walsh isn’t just a waitress at the District’s Shaw neighborhood eatery Compass Rose to pay her rent; being in the restaurant industry is her long term career goal. For Walsh, the restaurant business is an industry she felt confident she could thrive in, until D.C.’s ballot Initiative 77 posed a potential threat to both her income and her dreams.
“If I didn’t make the money I make, I wouldn’t be able to live how I do now,” Walsh said in an interview.
Initiative 77, passed in June with 56 percent of the public’s vote, was set to gradually increase the minimum wage for tipped workers from $3.89 to equal the standard minimum wage of $15 by 2026, thus eliminating the need for a tip credit, the money paid by employers to tipped workers when their tips plus hourly wage don’t meet the standard minimum wage. It was proposed by Restaurant Opportunities Center, a national non-profit spearheading movements across the nation to achieve one minimum wage for all workers, but strongly opposed by many restaurant workers fearing an increase in minimum wage would diminish customers’ willingness to tip.
D.C’s minimum wage for tipped workers of $3.89, compared to the current standard minimum wage of $13.25, is the starkest gap between tipped and untipped minimum wages in the country, according to the National Employment Law Project.
Still, Walsh felt so threatened by Initiative 77, she spent her time off work advocating alongside the owner of Compass Rose to educate voters on the potentially negative implications of the initiative.
“There were people standing outside the polls saying to us ‘you don’t understand what’s in your best interest,’” Walsh recounted.
Walsh’s frustration grew. After doing research on the initiative, she knew she had a grasp on what was best for her career: working for cash tips, no matter how unpredictable they may be.
“I read the entire initiative word by word,” Walsh said. “It was mind numbing, and really poorly written.”
Walsh isn’t alone in largely attributing the initiative’s passage to ambiguous and persuasive language. David Gonzalez, a former restaurant manager and a current bartender at Union Market’s trendy dining spot Bidwell, agrees with Walsh that the initiative was written to be misleading.
“One of the biggest issues with 77 is the way they wrote it. It made it seem that if you were not for it, you were for people not getting paid more,” Gonzalez said in an interview.
Gonzalez believes a poorly written and misconceived bill, coupled with public misunderstanding of the restaurant industry pay model, led D.C. voters to believe an increase in tipped workers’ minimum wage would equate to overall higher paychecks.
“I had people come up to me and say ‘Hey, you’re welcome. I voted for 77. You’re going to get paid more now.’ And I was like, ‘I would have appreciated you asking me because I’m actually not going to get paid more,’” Gonzalez said.
Walsh and Gonzalez are part of a large segment of restaurant workers who think that if they were to earn a higher minimum wage, their paychecks would suffer from a decline in customer eagerness to tip well. For these workers, their legal minimum wage is less relevant to making ends meet.
“Anyone who doesn’t work in our community often doesn’t understand why we don’t care about our wage in general. I want the shift. The shift is the tips, and that’s the money that I’m making,” said waitress and restaurant worker advocate Jennifer Schellenberg in an interview.
Schellenberg is both a career waitress and an organizer with Restaurant Workers of America, a non-profit organization dedicated to protecting tipped income and jobs. The mobilization of her organization aided in the D.C. city council’s eventual reversal of the public’s vote.
Alongside non-profit efforts to reverse 77 were the restaurants themselves. Over 100 D.C. restaurants and their workers signed an opposition letter to the city council, stating that 77 “is likely to hurt their income either by business owners replacing the tipping model with a mandatory service fee or by customers tipping less overall.”
With such fierce opposition from local restaurants, organizations like Restaurant Workers of America, and industry leaders, such as celebrity chef and D.C. restaurant owner Jose Andres, the city council voted eight to five to repeal the passed initiative on October 2.
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Walsh, Gonzalez, and many of the 16,100 restaurant workers in D.C. sighed in relief upon learning their wages would remain the same. They felt council members were justified in taking action against 77 on behalf of industry workers. Gonzalez said he believes the council was simply attempting to correctly represent the opinion of those the initiative would affect most.
“It’s really hard to say it’s not coming from the people when the actual workers themselves are opposed,” Gonzalez said.
At the same time, backers of the initiative felt both disappointment and frustration with their elected officials.
Candace Cunningham, an organizer of One Fair Wage, a branch of ROC and a lead advocacy group in favor of Initiative 77, said in an interview that people were dismayed by the council disregarding the public’s decision to finally resolve some issues with tip credits, such as discriminatory tipping and tip theft.
“The members of this democracy are upset and really feel discouraged by the idea that elected officials can say, ‘well I don’t like this,’ or ‘bad law, we’re going to take it into our own hands and do whatever we want to do,” Cunningham said.
Voices like Cunningham’s got lost in the masses saying “no” to 77.
But despite workers’ satisfaction in their wage not escalating to $15, there is still some desire within the industry for a more minor wage increase. A wage increase could work to minimize the negative effects bad shifts with little tips has on one’s overall income.
21-year-old American University student and hostess at Donburi Anna Sol Park knows an increase in minimum wage would benefit not just waiters and waitresses, but all positions in the restaurant.
“I don’t really work for tips in the same way the waiters do, but I think increasing wages even just a little bit would make sense and benefit everyone,” Park said.
The ROC, One Fair Wage, and other Initiative 77 backers attempted to capitalize on workers like Park’s desire for a slight adjustment in wage, but magnified the increase to meet standard minimum wage. Their idea wasn’t based off of nothing, however. Six states have already increased tipped wages to equal normal minimum wages, exactly as Initiative 77 strove to do.
California, Minnesota, Montana, Nevada, Oregon, and Washington have eliminated tip credits with some success. Tipped workers in California, for instance, earn a minimum of $11 an hour, the same as a worker in any other industry, yet still have the opportunity to earn tips.
19-year-old Yasmeen Sher-Jan works as a waitress in a California restaurant every summer when she is home from studying at American University. She says her high minimum wage hasn’t jeopardized her ability to make tips.
“I’ve always been tipped regularly,” Sher-Jan said in an interview. “I would say it’s almost always at 18 percent.”
This luxury of making a standard minimum wage isn’t the reality for the majority of America’s restaurant workers. Over 45,000,000 tipped workers from 18 states are paid the federal minimum cash wage for tipped workers of $2.13 by their employers, with a tip credit required to equal a minimum of $7.25 per hour, according to the Department of Justice.
This $2.13 tipped minimum cash wage was set in a 1991 amendment to the Fair Labor Standards Act. 17 years later, the wage rate remains constant, despite an average yearly increase in inflation by almost three percent.
Attempts to increase the federal minimum wage, which would taken strain off of workers relying on tips, have failed in the past. The most recently proposed amendment to the Fair Labor Standards Act took place in 2014 with the Harkin Miller Bill, which would have increased wages to $10.10 over a two year period. It failed with Republican opposition 54-42 before Senate.
Those in favor of raising tipped minimum wage and thus eliminating tip credits with legislation like Initiative 77 believe the government is failing workers with inaction.
“No matter where you work or what you do you should be able to know that if I work 40 hours, whatever that job is, you can meet your need,” Cunningham said.
Cunningham has reason to worry that tipped workers might not be making enough to put bread on their tables with such low cash wages. The Economic Policy Institute reports that poverty rates for those working for tips is consistently almost double that of other minimum wage working classes.
There is also evidence of a causal link between workers earning the federal minimum tipped cash wage and poverty. States where workers earn $2.13 in cash wages consistently have higher occurrences of restaurant worker poverty than other states, according to research conducted by the Food Labor Center at University of California Berkeley.
Massachusetts, a $2.13 min. wage state versus D.C., a $3.89 min. wage state. Both compared to the national poverty rate. (University of California Berkeley)
Even if Congress or D.C.’s city council passed legislation to increase the tipped minimum wage, there is still lingering fear that it might not be best for D.C’s expanding restaurant industry overall. Gonzalez worries changing the pay model could disturb this delicate, young industry growing in prestige.
“A good example of the rate of growth and why it is so fragile right now is three years ago the city got a Michelin guide overall, and this year they doubled the Bib Gourmand list,” Gonzalez said.
Damage to restaurant industries where tipped minimum wages have increased, like in California, is apparent. The Harvard Business School found in recent research that for every $1 increase in tipped minimum wage in California, the risk of restaurant closure increases by six percent. Sher-Jan did note that the mounting costs of maintaining staff with high wages has been a barrier growth within the California restaurant scene.
“The town I live in cannot sustain new restaurants because they don’t do well. Older restaurants…they’ve been there for so long that they are doing well and anything else is just not going to cut it,” Sher-Jan said.
Jeopardizing D.C.’s restaurant industry with any level of minimum wage increase is a risk industry insiders are unsure they want to take. For those in the business for the long haul, protecting the District’s blossoming restaurant industry and one’s source of livelihood is essential.
“I haven’t really heard many solutions,” Walsh said. “But I know how I feel and that matters.”
Advanced Reporting Times 