For advocates of better wages in the restaurant industry, Tuesday was the most important milestone in more than 30 years. In passing Ballot Initiative 82, Washington, D.C., became the first state or municipality since the mid-1980s to require restaurants to provide workers with base pay commensurate with the standard minimum wage.
Advocates have long argued that the “tip credit” system, which allows restaurants to credit a portion of a worker’s tips toward their obligation to pay minimum wage, is an exploitative business model susceptible to wage theft. All but eight states have this system. President Joe Biden has called for federal action, but none has been forthcoming: Last year’s Raise the Wage Act, which would eliminate this system, stalled in Congress. But advocates say the elimination of the tip credit in the nation’s capital provides momentum for a burgeoning movement at the state level: in New York, where state senators introduced a universal minimum wage bill in March; in Maine, where organizers plan to soon file a ballot measure of their own; in Michigan, where a judge reinstated a measure to improve pay for tipped workers; and elsewhere. “I cannot understate how historic this moment is,” Saru Jayraman, the president of the national organization One Fair Wage, told me. “Workers are finally getting what they’re owed.”
Organizers in D.C. anticipated a victory, but voters delivered a landslide: 74 percent voted in favor of I-82, and the measure passed in every precinct in the city. For longtime advocates of the cause, the victory is not only a hard-won vindication of their work—it’s “a moment of redemption,” as Jayraman told me in September. In 2018, organizers collected enough signatures to get I-77, a previous incarnation of the initiative, on the ballot. It passed with 55 percent of the vote, but the city council bowed to lobbying pressure and overturned it. Councilmembers cited the industry line that a higher minimum wage would drive costs up and tips down, cutting into earnings for workers. That claim was the central argument of the “Save Our Tips” astroturf campaign, which also successfully convinced large numbers of tipped workers to oppose the ballot initiative that year. (Read more about the history of this fight in the current issue of the Monthly.)
But when the pandemic hit two years later and wages and work conditions deteriorated, organizers reintroduced the initiative, and many workers reconsidered their stance on the issue. “I’m ashamed to say in 2018, I was anti-77, and then I did some traveling and talked to bartenders in California, Oregon,” Max Hawla, a 29-year-old bartender, said in a speech at Tuesday’s victory party. “All of them unanimously preferred not having tip credit and making a real minimum wage underneath all their tips, and it made me realize I’d been lied to.” Despite the restaurant lobby’s claims, wages are higher and more stable in states with the universal minimum wage, according to research from the Economic Policy Institute.
This year, the “No to I-82” campaign raised more than $643,000 from the National Restaurant Association and other groups, most of which went toward a series of lawsuits over the spring and summer to block the measure from appearing on the ballot. When those failed, a “voter education” campaign akin to 2018’s Save Our Tips never got off the ground—polls showed that support for I-82 was overwhelming, and most councilmembers said they wouldn’t seek to repeal the initiative this time around. One Fair Wage is preparing to pursue universal minimum wage legislation in 10 states in 2023. If I-82 increases wages without hurting the industry, as experts predict, the D.C. model will provide grist for campaigns elsewhere. “Having the evidence base to show that this is a smart policy, I think, is going to provide a lot of fuel to those efforts,” David Cooper, an economist at the Economic Policy Institute, says. With no new examples of this policy intervention in decades, “opponents have been able to lean on the uncertainty of what’s going to happen to convince restaurant workers that this is not in their best interest,” he says. “When we are able to show that the restaurant workers are doing just fine after this, and probably better than they were before, it’s going to neuter a lot of those arguments.”
