“Increasing the tipped minimum wage will only make the current wage disparity more extreme and place downward pressure on small business margins.”
Our Local CommonsChef José Andrés, fresh off being named as the humanitarian of the year by the James Beard Foundation, is urging voters to vote no on Initiative 77 on June 19 together with his company ThinkFoodGroup. Locally the chef owns Jaleo, Zaytinya, Oyamel,
ThinkFoodGroup issued the following statement to City Paper this afternoon:
We have been looking very carefully at current proposals regarding changes to the tipped minimum wage and feel strongly that Initiative 77 is attempting to solve the wrong problem. Our 25-year operating experience, in both polished casual and fine dining restaurants, consistently shows that servers earn appreciably more than back-of-house positions, and well above the minimum wage when you combine the tipped wage from employers and total tips from guests. As it stands, the system is designed to allow servers to earn as much as 100% or more per hour than cooks.
Increasing the tipped minimum wage will only make the current wage disparity more extreme and place downward pressure on small business margins.
Restaurant owners have few ways to offset increased costs of doing business and successful ones know that raising prices is always the choice of last resort. Increased restaurant prices invariably result in fewer guests dining out and overall less spending. In the end, servers end up making fewer tips and working fewer hours, cooks also work fewer hours, and restaurant owners have no choice but to cut jobs to make ends meet. Nothing good comes from raising prices.
This issue therefore merits a much deeper discussion that extends well beyond the scope of Initiative 77, and instead focused on balancing the overall wage inequality that has existed in the industry for decades. As a progressive employer in the DC community, we are actively looking for long-term solutions that will work for our team, our guests and our investors, and that allow our industry to create more jobs. We therefore encourage District of Columbia residents to vote NO on Initiative 77 and instead help work towards a more equitable solution that supports both restaurant servers and cooks who serve their guests proudly every day.
Andrés joins Mayor Muriel Bowser, the majority of the DC Council, the Washington Post editorial board, and a list of more than 100 restaurant operators as opponents of the initiative that would do away with the tip credit.
The tip credit allows restaurant operators to keep their payroll costs down by paying tipped workers like servers, bartenders, and busboys a lower base wage of at least $3.33 an hour, thus asking customers to make up the difference with tips. If tips do not carry a tipped worker over the standard minimum wage (currently $12.50 per hour), the employer is already obligated by law to make up the difference. All but seven U.S. states have a tip credit.
If voters pass Initiative 77 on June 19, the tipped minimum wage would go up in eight increments until it reaches $15 in 2025. From 2026 going forward the tipped minimum wage and the standard minimum wage would be come one wage that increases with inflation.
Restaurant Opportunities Center United collected enough signatures to get Initiative 77 on the ballot. ROC leaders want to elevate a sector of workers they say earn poverty wages, adding that tipping and a two-tier wage system disadvantages women and people of color and is a prime cause of sexual harassment. They think there would be less wage theft if all workers earned what they call One Fair Wage.
Opponents say the D.C. restaurant industry is thriving and different from other cities and states that have scrapped the tip credit. Tipped workers feel their untapped earning potential would be threatened and they argue the focus should be on bolstering the enforcement of existing labor laws.
Read more about both sides of the battle over Initiative 77 here and here.
