We attended a Panel Debate of Ballot Initiative 77 at the Black Cat—which ramped up quite heatedly between panelists and interrupted by loud outcries from the audience! The discussion was hosted by Washington City Paper. The panel included bar and restaurant owners and employees, a wage lawyer, and others (see full list at the bottom). Previously, we had also attended a forum hosted by the DC Bartenders Guild and the discussion at both events got very heated.
Issue at hand: Currently, the tip credit means tipped workers like servers and bartenders are given a salary of $3.33 an hour ($5 by 2020). If they do not make the minimum wage from their tips ($12.50 an hour, or $15 in 2020) , the operator (bar or restaurant) will cover the difference. Ballot 77 will do away with this “tipped minimum wage”, meaning operators will pay employees the normal minimum wage upfront ($12.50 an hour, or $15 in 2020).
Pro-tip: A lot of discussion is taking place on Twitter—click here to follow and join in!
Main arguments from both sides
“YES” – For Ballot Initiative 77:
- Firstly, they argued that this will not result in a service charge from restaurants. Using anecdotal evidence that they haven’t seen service charges in other cosmopolitan areas (i.e. San Francisco).
- They argued that women in the workplace put up with more sexual harassment (twice as much as state where this is only “One Fair Wage“) in order to make their tips. Those against Ballot 77 retort that this is trying to solve a problem (harassment) by throwing a bandaid on another (wages), and doesn’t make sense.
- They argued that employers do not make up for wages that do not meet the minimum wage, and that there are many cases of such (wage theft cases), even cases of employees not getting compensated in Dupont Circle (after losing their job and the restaurant closed down months later). And employees don’t file claims with the EEOC, which take time out of their shifts and multiple jobs.
- They argued that the vast majority of employees that need Ballot 77 are not represented at the panel, as their restaurants are not a part of the “Restaurant Assocation” and the employees affected are the majority of ones employed by the industry (minorities from three countries – Guatemala, El Salvador, and Nicaragua). These are restaurants where there is no defined front of house and back of the house (employees work both). However, those against Ballot 77 retorted that those are usually not tipped workers (mostly backroom), which receive minimum wage.
- They argued that this would be implemented over 8 years (by 2026), so operators would be able to adapt and will find ways to not have to raise prices.
“NO” – Against Ballot Initiative 77:
- Both restaurants and bar owners and employees created an outcry that bars and restaurants have already low profit margins, that these wages will be double taxed (at both the company and employee level), which will mean much higher costs to restaurants and subsequent cutting of employees and their hours (maybe switching to counter service).
- Operators argue that they should work on enforcing the law as-is (because wage theft is already illegal), instead of creating new ones that penalize operators. They also argue that the vast majority
- The initiative is trying to fix a problem that doesn’t exist; bartenders and servers typically make more than minimum wage already ($20 to $40 an hour in many cases). Some predict a mass exodus of talent from the city if 77 passes.
- Because of the higher costs, it would discourage restaurant owners—especially women and people of color who historically have less access to capital—from opening or expanding businesses in DC.
- More than 100 local restaurant and bar owners—from Rose’s Luxury, Big Hunt, Thip Khao, and beyond—have signed a letter asking people to vote “no” on Initiative 77. Their campaign will go live on social media at today, joining a parallel “Save Our Tips” effort from the Restaurant Association Metropolitan Washington.
- Josh Phillips, a Partner of Espita Mezcaleria, stated restaurant profit margins are already low – with a goal of 11%, his are 9%. He calculated that these frontloaded salaries would add 9.1% cost, implying that they then would not make a profit. And at the restaurant, raising prices would not always be possible. They charge $6 for each “fancy taco”, raising to $8 would mean demand would go down. He stated a 20% increase in price would only lead to a 8-9% increase in profit, as higher income means higher payroll taxes, workers tax percentage, and they will also lose FICA tax credit. The other side retorted that restaurants in other locales, such as San Francisco still survive with high minimum wages.
See correction from Josh Phillips below: A 20% increase in price would not lead to an increase in profits after various expenses.
- Instead of raising item prices, operators may also resort to a mandatory service charge, and may even forego allowing tips. Quality of service may also go down, as the incentive is reduced.
- They also mentioned that they fought this a couple years ago.
- DC Council Chairman Phil Mendelson also made a guest appearance looking down upon Initiative 77.
Origin and Next Steps
Restaurant Opportunities Center United obtained the minimum of signatures to get 77 on the ballot. The vote will take place on June 19th at local elections, and D.C. voters will set the decision.
For the full playlist of clips, see Playlist:
⭐CIVIC ENGAGEMENT: Panel about Ballot Initiative 77, 7:30-9PM at Black Cat (1811 14th St NW). Join us for a panel about Ballot Initiative 77. Restaurant Opportunities Center United obtained enough signatures to get 77 on the ballot. If it passes, the tipped minimum wage will go up in eight increments until it reaches $15 in July 2025. FREE
Kathy Hollinger, CEO, Restaurant Association Metropolitan Washington
Diana Ramirez, Director, ROC-DC
Josh Phillips, Partner, Espita Mezcaleria
Sheena Wills, Tipped Worker, DC-9
Karim Soumah, Tipped Worker, RIS
Venorica Tucker, Tipped Worker and ROC Member
Thea Bryan, Tipped Worker and ROC Member
Jill Marie Tyler, Co-owner, Tail Up Goat
Justin Zelikovitz, Attorney, DCWageLaw
Ed Lazere, Candidate for DC Council Chairman
(Moderator) Laura Hayes, Food Editor, Washington City Paper
(Moderator) Andrew Giambrone, Loose Lips Columnist, Washington City Paper
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