Charles Russo
The “2026” pop-up bar occupies the basement of a two-story building in Washington's trendy Dupont Circle neighborhood, where young professionals observe the tradition of the weekly happy hour with near-religious fervor. Upstairs, the parent bar, Rebellion, brims with the usual sounds of glasses clinking and laughter. Head to lower level, though, and you'll feel like you've stepped into Edward Hopper's Nighthawks painting, reimagined for a new age.
The dimly lit and almost-empty bar stretches to the end of the room. Two servers sit idle on their smartphones while the bartender finds ways to keep busy.
This not-so-happy hour is dolorous by design, part of a campaign by restaurant owners to depict a ballot measure, known as Initiative 77, as a threat to their workers. The measure will come before voters in the city’s primary elections on June 19.
The initiative would gradually phase out the District's current two-tiered wage system, under which tipped employees earn $3.33 an hour rather than the standard minimum wage of $12.50. If the measure passes, D.C. would join seven other states that have eliminated the sub-minimum wage, including California, Oregon, Nevada, and Montana. Supporters of Initiative 77 believe that a standardized wage would offer more stability and protect against the sexual harassment that service workers may be forced to tolerate for the sake of getting their tips. Opponents say that the measure will prove too costly for restaurants already struggling with thin profit margins and will lead to layoffs and higher prices for consumers.
Under current law, employers may pay tipped workers less than the standard minimum wage so as long as their tips bring their pay up to that minimum (this known as the tip credit).
If the measure passes, minimum pay for tipped employees would reach parity with other workers in 2026, hence the name of the basement pop-up bar. Organizers thus cooked up this “future dystopia,” showcasing the higher drink prices and staff cuts that they claim Initiative 77 would cause. The menu here is noticeably more expensive than the one upstairs at Rebellion and the staff is slimmer.
“The fact of the matter is that we'll lose jobs here in D.C. People will lose hours. … That's literally what we're proving right now as we sit here in an empty bar,” says Frank Mills, a D.C. native who bartends full-time at Jack Rose Dining Saloon and helped organize the pop-up. “In the last hour and a half we've had five guests come down now, only to turn right around after seeing the menu prices.”
Owner Travis Weiss says that he's learned a few lessons just from running “2026" for a few hours: For starters, he says, the unwillingness of customers to pay the higher menu prices would force him to make such tough decisions as whether to downsize his staff.
Of course, setting the prices at “2026” by political calculation rather than by a business decision, and placing “2026” downstairs from his other bar, which charges current prices, tends to negate the value of his experiment. Nor has he attempted to raise his prices upstairs to what they would be in the year 2026 even if Initiative77 is defeated.
The tipped minimum wage movement has gained steam in the last few years, pitting business and labor against each other.
In one corner is the National Restaurant Association (dubbed “the other NRA” by its critics), a lobbying heavyweight that often has been the sole organization fighting against raising the minimum wage for any workers, and which has also opposed offering paid sick leave to tipped workers. In the other corner is a coalition of labor unions and progressive groups led by the New York-based Restaurant Opportunities Center (ROC), the nation's largest restaurant workers' organization, under the banner of the One Fair Wage campaign.
The two have traded blows in what has become a high-stakes duel. Save Our Tips, the group heading the charge against Initiative 77, has spent nearly $165,000 on the primary election since the beginning of this fundraising period in early April, according to a recent campaign-finance filing. Of the $250,000 the group has raised in this period, more than $70,000 came from the NRA and $40,000 from the Restaurant Association Washington Metropolitan, a regional trade association. Another group opposing the initiative, NO2DC77, amassed nearly $40,000 of its own this period, mainly donations from local restaurants.
Meanwhile, One Fair Wage raised $84,000 in the latest period, nearly all of it from the ROC. One Fair Wage has raised almost $270,000 since last year to support Initiative 77—that's far less than the $350,000 combined haul raised by Save Our Tips and NO2DC77 this year alone.
Woong Chang is a bartender at a hip restaurant in northeast D.C. and a vocal proponent of the initiative. A California native, Chang says he received an unpleasant wake-up call when he first moved to the District in 2009 in search of a serving job. When asked what he expected to earn during a hiring interview, Chang gave what he thought to be a normal answer: $10 to $12, plus tips. The hiring manager laughed in his face. Soon after, Chang began to volunteer with ROC locally and was eventually voted onto the national board of directors as a worker representative.
“Food prices will have to go up a little, I'm not arguing they won't. But to say that raising the tipped minimum wage is going to make food prices go up to a point where it's outrageous and people stop tipping, it's just not true,” says Chang. “Empirically, it's never been proven true.”
Having worked as a server and bartender in California, Chang experienced both sides of the debate. He got his start working in a mom-and-pop restaurant in Berkeley in 2003, where the law required he be paid the regular minimum wage. Chang says he hardly felt the tip credits' absence when it came to getting paid.
“I didn't notice it all,” Chang says. “From the get-go of starting in the restaurant industry, I was getting paid the full minimum wage on top of anywhere from 15 to 20 percent tipping. That was true for all years I worked in restaurants in California.”
Charles Russo
Chang's experience doesn't appear particularly exceptional. A study by the organization of San Francisco restaurant owners—the Golden Gate Restaurant Association—found that the average tip in their restaurants comes to 19 percent, even though servers and bartenders in the city make $14 an hour (going to $15 an hour on July 1). In D.C., by contrast, the average tip comes to 14.9 percent—the second-lowest in the nation, according to Time.
Moreover, a 2014 study by the Economic Policy Institute found that since 1995, employment growth in the hospitality and leisure industries has been stronger in states like California where the sub-minimum wage has been eliminated. A 2016 working paper from the U.S. Census Bureau found that tips tended to decrease as the sub-minimum wage rose, but overall employment increased, at least until the tipped wage exceeded about $6 or $7.
While opponents of Initiative 77 argue that eliminating the tip credit would sink local businesses, the NRA itself projects that California’s restaurant and food-service industry will grow by 10 percent over the next decade. The organization estimates that the industry will grow by more than 6 percent in the same time frame in New York, which is poised to eliminate the tip credit after a push by Governor Andrew Cuomo.
A common refrain from servers opposed to initiative is that they never asked to be saved. As the anti-77 crowd tells it, it's hard to even find a tipped worker in favor of the initiative. (“They're like unicorns,” one longtime bartender told the Washington Blade in May.) It’s difficult to gauge the amount of real support for the measure among tipped workers in D.C., however, because of the unspoken threat of retaliation against those who do.
T.J., a pro-77 tipped worker working in Northwest D.C., agreed to speak to The American Prospect on the condition that only her initials be used to identify her. T.J., who is in the process of looking for other work, fears that publicly showing support for Initiative 77 could cause other restaurants to blackball her. “I have been told that I’ll never get a job in the industry again if I ever leave my current employer,” she says.
As a former victim of wage theft, T.J. believes a tipped minimum wage would help marginalized workers, many of whom speak English as a second language and might not be able to navigate the complaint process.
The data on the prevalence of wage theft from workers reliant on tips are overwhelming: According to a compliance sweep of close to 9,000 full-service restaurants conducted by the U.S. Department of Labor's Wage and Hour Division between 2010 and 2012, nearly 84 percent of investigated restaurants had committed some type of violation. Tip credit violations alone accounted for nearly $5.5 million in back wages recovered by the division.
In T.J.'s case, she only managed to successfully file a complaint against her former employer to the Department of Employment Services because she kept meticulous records and knew which steps to take.
“If I had not known what to do, I would have lost that money,” says T.J.
Beyond stymying wage theft, proponents of Initiative 77 argue that it will help rein in the sexual harassment that tipped workers may face by weakening the power of customers and other workers who don't depend on tips.
In a 2014 national survey conducted by the ROC, 90 percent of female respondents reported being bothered by customer harassment, with half of women reporting that they experience sexual harassment on at least a weekly basis. The majority of tipped workers are women, including more than two-thirds of servers.
“If a women gets a full wage from her boss, she doesn't have to have to put up with anything and everything from her customers, because she actually has an income to count on,” says Saru Jayaraman, cofounder of the ROC. “If you live completely off your tips, you have no choice but to tolerate whatever comes your way.
Critics of the tipped-worker compensation model have also pointed to research showing that tipping is often based on race, with black workers often receiving lower tips for the same service.
Opponents of Initiative 77 claim that they favor working against sexual harassment and discrimination but question how effective the measure will actually be in that regard and accuse ROC of politicizing the issue of a tipped minimum wage.
“They're trying to use any sort of socially charged buzzwords, invoking the #MeToo campaign.” says Valerie Torres, a bartender at District Anchor working at the pop-up on Monday. “To suggest that the only reason we're getting tips is because we're being harassed. … They're claiming to speak for me as a woman and a person of color and it's insulting. ”
However liberal many of the restaurant workers opposed to the measure may be, the people running the No on 77 campaign are anything but. As The Intercept has reported, the campaign is managed by the Lincoln Strategy Group, which did work for Donald Trump’s presidential campaign. The Group is headed by Nathan Sproul, a Republican campaign consultant and former executive director of the Arizona Christian Coalition. Over the past 15 years, Sproul-led campaign firms have been accused of destroying voter registration forms of Democrats and “mobilizing a fake grassroots effort,” The Intercept reports, “to undermine the Consumer Financial Protection Bureau.” Critics charge that the “Save Our Tips” campaign constitutes another one of Sproul’s fake grassroots efforts.
While the debate about servers and bartenders has sucked up most of the air in the room, it's other, often overlooked, tipped workers whom Initiative 77 would likely help most. Valets, barbacks, shampooers, and manicurists in the District, to name a few, all work for the same $3.33 base minimum wage, but often don't receive nearly as much in tips as servers or bartenders.
Even in the case of waitstaff, many servers don't come close to the more than $20 to $30 per hour that can be made at high-end, high-traffic locations. In 2017, the average hourly wage for servers in the city was $17.48, while the median hourly was just $11.86 (the minimum wage at the time was $11.50). According to EPI, approximately 25 percent of D.C. bartenders, servers, pedicurists, and shampooers made an hourly $11.71 or less last year.
With less than a week to go until the election, the fate of Initiative 77 remains in doubt. A recent poll commissioned by City Council chairman candidate Ed Lazere found that 70 percent of registered Democrats supported raising the tipped minimum wage to $15. But even if Initiative 77 passes, the result could be overturned by the D.C. Council. A majority of the council’s members, along with Mayor Muriel Bowser, have come out against the measure.
Tax Cuts for the rich. Deregulation for the powerful. Wage suppression for everyone else. These are the tenets of trickle-down economics, the conservatives' age-old strategy for advantaging the interests of the rich and powerful over those of the middle class and poor. The articles in Trickle-Downers are devoted, first, to exposing and refuting these lies, but equally, to reminding Americans that these claims aren't made because they are true. Rather, they are made because they are the most effective way elites have found to bully, confuse and intimidate middle- and working-class voters. Trickle-down claims are not real economics. They are negotiating strategies. Here at the Prospect, we hope to help you win that negotiation.
