District of Columbia Lost Nearly 1,000 Restaurant Jobs Under Initiative 82

Restaurant Employment Declines While Other Industries Add Jobs

Abstract

Tip-credit elimination activists have upheld Washington, D.C. as a paragon of anti-tipping measures for their nationwide minimum wage advocacy. However, these activists have skewed data and ignored the evidence that shows Initiative 82 has wreaked havoc on restaurants and their employees in the District. The latest jobs report shows full-service restaurant employment continues to decline because of the measure. After Initiative 82, a ballot measure to eliminate the District’s tip credit by 2027, was passed by voters in November 2022, restaurants in D.C. began bracing for impact. An Employment Policies Institute survey of roughly 100 restaurants in the city found most were planning to raise prices, lay off employees, or reduce employees’ scheduled hours sometime before the full implementation of the law in 2027. Roughly one year under the law, the job loss consequences operators warned about are already a reality. D.C. restaurants have experienced two wage hikes in the past year: up to $6 per hour on May 1, 2023 and up to $8 per hour on July 1, 2023. Restaurants are facing a third increase up to $10 per hour on July 1 – an 87% total increase under Initiative 82. This May marked a full year under Initiative 82 in D.C. The best federal data available shows D.C.’s full- service restaurant employment has declined as a direct response to the implementation of Initiative 82, even after accounting for normal seasonal variation. Prior to Initiative 82, D.C.’s full-service restaurant industry was booming with added jobs. Initiative 82 has killed that momentum and is now seeing net job losses since the policy went into effect. The latest federal employment data released June 25, 2024 finds:
  • District of Columbia full-service restaurant employment has a net loss of 925 jobs since the beginning of Initiative 82 in May 2023. This is while District of Columbia’s total employment has been rising – D.C. total employment increased by nearly 1% over the same period since May 2023;
  • This represents a 3.1% percent net employment loss for the full-service restaurant industry since May 2023, when Initiative 82 was first implemented; and
  • Prior to Initiative 82, the last year-over-year loss this large in the full-service restaurant industry was in April 2002 (barring COVID effects in 2020).