Ahead of a planned hearing on Mayor Muriel Bowser’s budget proposal to repeal Initiative 82 – the current law eliminating DC’s tip credit – DC’s Office of the Budget Director released a report claiming DC’s restaurant industry “remains healthy” under tip credit elimination. But the latest data show that isn’t true – like workers and local operators have been saying since the law began, thousands of jobs have been lost, earnings are down because tips are down, and restaurants have closed.
At a hearing on June 4, EPI’s research director Rebekah Paxton debunked the Budget Director’s conclusion, citing best-available quarterly data that represents roughly 95% of all employers instead of the Budget Director’s mix and match use of monthly survey estimates, inappropriate industry categories, and skewed analysis. Watch here:
Here’s a breakdown of EPI’s analysis of the DC Budget Director report:
- The best-available Bureau of Labor Statistics (BLS) data show DC’s full-service restaurants and bars affected by Initiative 82 have lost roughly 5% of the industry’s total workforce) since May 2023.
- The best-available BLS data shows DC’s losses are disproportionately high compared to limited-service restaurants in the city not subject to Initiative 82, and to full-service restaurants in surrounding Virginia and Maryland counties.
- The report claims income is increasing for tipped workers, but wrongly uses data that does not accurately reflect earnings, due to confusing survey questions and small sample sizes. Individual-level data and quarterly employer-reported data show DC tipped workers have lost over $11 million in total earnings under Initiative 82.
Read the full breakdown here.