OPINION:
Has the District’s restaurant tipping system reached the tipping point? That’s the question D.C. residents will consider on the June 19 primary ballot when they vote on Initiative 77, which would eliminate the current tipping system in the District.
For the sake of your local restaurant, and the waiters who work there, your best bet is to vote “No.”
Start with some recent history. When the City Council voted in 2016 to raise the District’s minimum wage to $15 an hour, it capped the tipped minimum wage at $5 an hour.
These tipped employees are still guaranteed the full minimum wage. The current system credits tips earned toward fulfilling — and typically exceeding — the minimum wage. Servers and bartenders earn much more than $15 an hour, roughly $20-$40 an hour in the District. And yes — tips are counted as earned income by the city and the IRS.
Server support for the status quo isn’t dissuading the controversial labor advocacy group called ROC. They are the carpetbagging backer of the Initiative 77 ballot measure. This self-appointed voice of restaurant servers has in fact angered thousands in the local server community. ROC’s founder, Saru Jayaraman, is an opponent of tipping, telling one magazine that “this system of tipping needs to go.” She is even fond of suggesting that the system has its roots in slavery.
According to data from Upserve, 97 percent of restaurant staff support the current system of tipping. Famous restaurateur Danny Meyer implemented a “no tipping” model at his Manhattan eateries. He jacked up prices and paid a higher wage as a means to eliminate tipping. Mr. Meyer’s restaurants lost as much 40 percent of their longtime server staff as their income dropped off by thousands of dollars.
While Initiative 77 doesn’t explicitly say that tips will be eliminated, it’s one of several unintended consequences that results from eliminating the tip credit. Others include restaurant closures. Restaurants operate on the narrowest of profit margins — typically 3 to 4 percent. Owners faced with tripled labor costs will either have to offset some of it through higher prices, and — more likely, if customers are unwilling to pay — be forced into making other tough decisions that involve a combination of fewer hours , fewer staff and more self-service.
Look to San Francisco — which has already eliminated their tipping systems — for a lesson. A recent Harvard study indicates that the closure rate for San Francisco restaurants rose each time the base wage for tipped employees was increased. (The pain was felt most acutely by “median” level restaurants that don’t have pricing power.) The same thing happened after New York raised its tipped wage by 50 percent at the end of 2015; over 270 full-service restaurants shut down.
ROC and Saru have been spreading the false whopper that the rate of sexual harassment in the restaurant industry is related to the tipping system. This talking point has its only support coming from a ridiculously flawed ROC survey from 2014. (You can view a report documenting these flaws at www.EPIOnline.org.) Far more reliable data from the federal Equal Employment Opportunity Commission shows that California — a state without a tipped wage — has more than double the rate of restaurant sexual harassment reports as New York, a state with a tipped wage. So much for ROC credibility.
And if all of this is still not convincing, consider Maine. In late 2016, a poorly-understood voter referendum passed that would phase out Maine’s tipped wage. One year later, more than 5,000 Maine servers and bartenders joined forces to push back against this bad idea. And in the end, a bipartisan group of state legislators voted to restore the lower tipped wage.
Facts and figures should speak louder than outlandish talking points coming from a woman who misrepresents server’s interests. If Maine is any past indication, an engaged group of waiters, waitresses and bartenders have the power to overcome ROC’s agenda and save their own livelihoods. Washington voters should be wary when heading to the polls this June. Keep in mind your favorite server or bartender who wants you to vote “No.”
• Richard Berman is the president of Berman and Co., a public relations firm in Washington, D.C.
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