One Fair Wage and supporters of Initiative 82 claimed tip credit elimination was necessary to create more “fair” and “stable” wages for the District’s tipped restaurant staff. Federal Bureau of Labor Statistics data shows since Initiative 82 went into effect in May 2023, restaurant and bar workers have lost $11.8 million in earnings.
Data from the Bureau of Labor Statistics Quarterly Census of Employment and Wages shows DC workers at full-service restaurants and bars went from earning $345.6 million in total quarterly earnings in the second quarter of 2023 (when Initiative 82 was first implemented in May 2023) down to $333.8 million in the third quarter of 2024, the latest data available. This drop is unique from the same-length period in prior years – it represents the only decline in worker earnings in a decade, except for COVID-related losses in 2020.
This evidence comes after dozens of tipped workers testified before DC’s city council that Initiative 82 had slashed their tips and earnings, not raised them. Since then, Mayor Muriel Bowser has called for a repeal of Initiative 82 because of its negative impact on local tipped workers and restaurants.
On an individual level, survey data of local tipped workers collected by the U.S. Census Bureau shows Initiative 82 has lowered weekly earnings for these workers, and even widened the earnings gap between highest- and lower-earning tipped workers.
EPI analyzed U.S. Census Bureau data from the Current Population Survey Outgoing Rotational Group study (CPS-ORG), survey data typically used by economists to understand earnings at an occupation level. EPI reviewed tipped server, bartender, host, and busser positions and their usual weekly earnings before and after Initiative 82 went into effect, adjusted for inflation.
(Note: These earnings data are a conservative picture of tipped workers’ total earnings, as they only cover weekly earnings from their primary job. For example, someone who bartends at 2 or 3 locations would only report earnings from one of those jobs.)
In the two years following the May 1, 2023 implementation date, the median DC tipped worker earned $642 per week from their primary restaurant job. That is down roughly more than -5% from the median tipped worker’s weekly earnings in the two years before Initiative 82 was implemented. That amounts to over $1,800 in lost earnings annually.
What is even more troubling is the even greater negative impact Initiative 82 has had on the income gap between DC’s lower- and higher-earning tipped workers. Despite One Fair Wage’s promises of tackling economic inequality, Initiative 82 has actually made it worse.
Those in the 25th percentile of DC tipped workers reported earning -14% less per week than before the law was implemented. That represents an annual income loss of nearly -$3,400.
After Initiative 82 went into effect in May 2023, the weekly earnings difference between highest-earning tipped workers (75th percentile of earnings) and lower-earning tipped workers (25th percentile) was a staggering 65%. Compare that to differences between these income groups before, which was 45%.
This is not surprising based on how tipped wage hikes have negatively impacted workers across the country. University of California-Irvine economists studying two decades of Census Bureau data have found every $1 wage hike for tipped restaurant workers reduces overall earnings by 5.6%.
Washington, D.C. has many documented symptoms of a restaurant crisis caused by Initiative 82 – thousands of lost jobs, restaurants closing down, and employees saying they are not earning as much as they were before the law went into effect. Now, best-available federal data on earnings for tipped workers shows those claims are true – DC tipped workers have lost up to 14% of their pre-Initiative 82 earnings. These losses are worst for workers at the lower end of the income distribution – all while the income gap between lower- and higher-earners grows.
Proponents of Initiative 82 – including One Fair Wage and Unite Here Local 25 union – have tried to claim DC’s restaurant industry is still thriving. Yet the “evidence” they provide crumbles when investigated, since they use data not only for the full-service restaurants and bars that are affected by Initiative 82, but lump them in with fast food restaurants, coffee shops, cafeterias, and other locations that are not subject to Initiative 82. This tactic misleads the public into thinking the DC restaurant industry is growing, when all the data specific to full-service restaurants and bars tells the opposite story.
The wealth of government data, survey results, or firsthand worker and operator experiences reported in the media are clear: DC’s workers are losing money and jobs, and more restaurants are closing every day.