Dive Brief:
- One Fair Wage said it wants to use Washington, D.C., as a model for the gradual elimination of the tipped wage in other jurisdictions, according to a report issued last week.
- The District’s full-service restaurant employment has remained steady since the passage of Initiative 82 in 2022, according to seasonally adjusted Bureau of Labor Statistics data cited by OFW.
- Similar ballot initiatives have faced significant opposition in other regions. Darden spent $250,000 and the National Restaurant Association spent $300,000 in October 2024 to successfully defeat a Massachusetts measure to gradually end the subminimum wage.
Dive Insight:
Steady sectoral employment in Washington mirrors 2024’s national employment trends: total restaurant employment shifted month to month, but remained in a relatively narrow range. Further growth in restaurant employment — in D.C. and nationwide — has been constrained by consumer price sensitivity due to inflationary pressure.
But the District’s full-service dining scene could see a much more difficult 2025 than other restaurant markets. The Department of Government Efficiency’s recent, and likely illegal, mass firings within large sections of the federal workforce could be a major traffic blow as sacked Washington-based workers seek jobs elsewhere. Forty-four percent of full-service casual restaurants in the District foresaw the possibility of closing in 2025, a Restaurant Association of Metro Washington report found.
OFW claims that employment growth in jurisdictions without the tip credit has been robust.
“Subminimum wage states saw employment in restaurant establishments increase 13 percent, while employment increased 17 percent in fair wage states,” OFW said in its report. The organization also said restaurant workers in states without the tip credit earned over $3,000 more annually than other jurisdictions.
Axios reported last month that RAMW wanted the D.C. council to gut Initiative 82. Repealing Initiative 82 would mark the second time business interests in the nation’s capital have succeeded in nullifying a tipped-wage referendum through legislative means. Initiative 82 passed with 73% of the vote in 2022.
