If you walk around D.C., you might have seen (likely you have) restaurants displaying “No on 77” signs. This is referring to Referendum 77 in D.C., to be held on June 19, which would raise the minimum wage for tipped workers to the ‘regular’ minimum wage by 2026 (in D.C., by 2020, the minimum wage will be $15/hour); currently the tipped minimum wage. Jared Bernstein and Ben Spielberg explain why Yes on 77 is a good idea (boldface mine):
In 2016, D.C. lawmakers set in motion a gradual increase to the city’s minimum wage to $15 by 2020. Because of pressure from the U.S. Chamber of Commerce and restaurant industry, however, the city’s tipped workers — food-service workers, hairstylists, hotel workers, taxi drivers and other employees for whom tipping is customary — got a substantially smaller increase. Their minimum wage, which is $3.33, will rise to only $5 an hour by 2020. Initiative 77 would, over the next eight years, phase out this subminimum wage for tipped workers such that by 2026, the city’s minimum wage for tipped workers would match the city’s regular minimum wage.
Under the law, tipped employees are still supposed to receive the minimum wage. If there’s a slow week at the hair salon and a hairstylist’s base pay plus tips works out to lower than the minimum wage, the salon is supposed to make up the difference. The problem is that the law is hard to enforce. Too often, workers in tipped industries who do not receive the added pay from their employers are unable to fight back because of fears of retaliation.
Related: EPI brings the wonk.
As the U.S. Labor Department’s former chief economist Heidi Shierholz has noted, 4 out of every 5 full-service restaurants the department investigated between 2009 and 2015 were violating wage and hour laws, with one of the most common violations being the failure to adequately compensate tipped workers. Tipped workers are significantly more likely than untipped workers to report that their hourly wages, including tips, are below the minimum wage.
And WE HAZ DATA!
As with minimum wage increases in general, the best way to gauge the impact of this policy is to see what’s happened in places that have implemented it. Eight states have already abolished the subminimum wage for tipped workers: Alaska, California, Hawaii, Minnesota, Montana, Nevada, Oregon and Washington. Several cities have, too. The results are that poverty has come down, pay has gone up, and employment remains stable.
For untipped workers, poverty rates are comparable across states whether they maintain a subminimum wage for tipped workers (see figure). But poverty rates for waiters and bartenders are substantially lower in the eight states that have one fair wage for everyone than in other states. Restaurant workers in these eight states also make about 20 percent more than their counterparts in states where the tipped minimum wage is $2.13 an hour (the federal tipped wage floor).
Being a notorious Dirty Fucking Hippie, I support Yes on 77. While this very well could hit waiters at high-end who can make good money off of tips (though I doubt it), I remember when, after Sept. 11, 2001, no one was eating out in D.C. (I just happened to be there shortly after the attacks for vacation), and even the high end servers were having a hard time making ends meet; I can’t even imagine what happened at the downscale restaurants. A living minimum wage can avert catastrophe.
Also, there are a lot of upper-middle class and gentry class people who live very well, in part because their ‘servant’ class does not, on the whole, get paid very well–or more honestly, they get paid shit. That’s wrong. Intelligent Designer forbid, you might have to pay more for dinner out.
If many of us, to have a good time, have to pay people a non-living wage to do so, then it’s time to change that.