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October 15 2018

Tipped Workers Explain Economics 101 to D.C. City Council

by Charlotte Hays

Washington, D.C.'s mandatory hike in the minimum wage for workers who make tips was presented by progressive advocates as a humanitarian move.

Such hikes in the mandatory minimum wage may be dear to the hearts of progressives, who often seem oblivious to the actual consequences, but D.C.'s tipped workers revolted.

They said that--thank you very much--they could do better and that their jobs were safer without the "help" from progressive activists. Thus on October 2, the City Council voted 8 -5 in favor of repeal of Initiative 77, a ballot measure that made $15 the mandatory minimum wage for tipped workers.

It was largely because the workers affected opposed the $15 minimum. How's that? As an editorial in today's Wall Street Journal notes, tipped workers gave the City Council an education in economics:

Before the measure passed in June, many restaurant workers wore buttons asking patrons to “save our tips” and “vote no on 77.” When Washingtonians passed the measure anyway, the workers pushed for repeal. Though restaurants pay a $3.89 hourly wage to tipped workers, “we choose these jobs because we make far more than the standard minimum wage” from tips, bartender Valerie Graham told the City Council.

Labor costs typically account for about 40% of a D.C. restaurant’s overall expenses. The Restaurant Association Metropolitan Washington estimates that raising the minimum wage to $15 for tipped workers would cost $600 million a year. Restaurants operate on a thin profit margin, as workers know.

“Increasing the base wage for tipped workers who already make well above minimum wage threatens those who do not make tips,” such as cooks, dishwashers and table bussers, Rose’s Luxury bartender Chelsea Silber told the City Council. Bartender Faith Alice Sleeper explained that “our support staff will lose their jobs first, many of whom are immigrants.”

Allison Kays, a general manager at Justin’s Cafe, said that as payroll expenses rose by more than $100,000 a year, the restaurant would likely save money by buying from “big box national suppliers” instead of local farms.

I regard the tip as the last bastion of rewarding merit: the quality of the work is what matters.

But the progressives weren't satisfied with harming the economics of the restaurants and tipped workers. The initiative also included sexual harassment training, including the establishment of a tip line.

Now, we are appalled at sexual harassment, but this is what the Journal calls "gesture politics." It would also cost the city $2.6 million over four years.

The repeal requires a second vote.

Who will win--progressive activists or the people actually affected?



Independent Women's Forum is an educational 501(c)(3) dedicated to developing and advancing policies that aren’t just well intended, but actually enhance people’s freedom, choices, and opportunities. IWF is the sister organization of the Independent Women’s Voice.​
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