Last month, residents of Washington, DC, voted in overwhelming favor of Initiative 82, the District of Columbia Tip Credit Elimination Act of 2021, which eliminates the subminimum tipped wage of $5.35 an hour. The measure, a repeat of a 2018 referendum, ensures that by 2027, all tipped workers will receive the city’s full hourly minimum wage of at least $16.10. With the passage of Initiative 82, DC joins seven states that have prohibited the use of a tip credit for tipped wage workers—Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington.
The current landscape of wage inequality in the restaurant industry is the outcome of years of discrimination, starting shortly after the US Civil War, when formerly enslaved people, especially Black women, were hired to do service jobs for zero-dollar wages. In 1966, the new federal minimum wage covered service industry workers, but employers could use tips to top up a subminimum wage. Three decades later, Bill Clinton signed the Minimum Wage Increase Act, but the tipped minimum wage was excluded from this increase due to pressure from the restaurant industry, locking food servers’ wages in at $2.13 per hour.
The racialized and gendered wage gap resulting from this wage suppression has widened over the decades, making working-class livelihood dependent on customer bias. Research has also shown that workers in tipped jobs are more likely to suffer not only substandard wages, but also sexual harassment and unsafe working conditions.
This year, organizations such as One Fair Wage, hospitality industry union UNITE HERE, and the Democratic Socialists of America worked hard to pass economic policy that will close this gap in Washington, DC. Presenting undeniable data that substantiates claims of discrimination, lobbying for legislative change, and canvassing record numbers of voters led to the defeat of the $700,000 opposition campaign led by the restaurant industry. Here’s why this matters, how it happened, and what it means for the future.
Intentional Inequality
Organizations dedicated to racial and economic justice have long focused on abolishing the tipped minimum wage as a strategy to close the racial wealth gap. In February 2022, One Fair Wage—a national coalition of service workers, industry employers, and organizations working to end the subminimum wage nationwide—announced a legislative campaign to raise wages and end subminimum wages in 25 states by 2026. In the nation’s capital, this means that service industry workers, 70 percent of whom are Black, will receive the highest raise in over 100 years.
The legacy of slavery has literal costs, and One Fair Wage has done the math. In September of this year, the organization released a report titled “Intentional Inequality: How the Subminimum Wage for Tipped Workers, Created to Deny Black Women a Wage, Exacerbates an Ongoing Race-Gender Pay Gap in the Restaurant Industry.” Between June and September, they surveyed 1,000 current and former tipped workers across the country about their experiences in the restaurant industry during the pandemic.
Three key findings emerged from their analysis:
- Black women in the industry continue to earn less than white men
The restaurant industry has notoriously large gender and racial wage gaps. According to the report, Black women in the restaurant industry make $2.57 an hour less than their white male counterparts, which amounts to $5,345 of income lost every year.
The report shows that the pay gap in the restaurant industry results from both bias in customer tipping and the exclusion of Black women from establishments where compensation may be higher. Even when they do work in fine dining, Black women earn less than their white male counterparts due to customer bias. That said, given that the subminimum wage has stagnated for three decades at below three dollars an hour, even as the cost of living has continued to rise, all workers are (unevenly) subjected to the racial and gendered dynamics of the tipped wage.
One Fair Wage also found that the race-gender pay gap is further compounded by differences in benefits. Take healthcare: 15 percent of white men surveyed stated that their employer contributes to health insurance, compared to only 8 percent of Black women. Discrimination affects wages, benefits, and working conditions and exacerbate differences in health and wealth accordingly.
- Black women are more likely to not earn enough tips to bring them to the minimum wage and are more likely to experience customer harassment
When it comes to enforcing wage laws, the burden falls on workers. Federal law mandates that employers must ensure that tips bring workers to the full minimum wage, or else compensate for the difference. But this law is hardly followed: in 2018, the Obama administration found an 84 percent non-compliance rate with the legal requirements of the two-tiered wage system.
This lack of employer responsibility has widened the racial wealth gap during the pandemic, as failing to top up subminimum wages affects Black women the most. While workers overall reported a dramatic decline in tips since the start of the pandemic, Black women experienced the sharpest drops; 22 percent of Black women surveyed said that their tips did not bring them to the full minimum, compared to 10 percent of their white male counterparts. According to this data, Black women are twice as likely to experience daily illegal wage theft.
The law also requires that employers protect workers from hostile racist and sexist work environments. But women workers reported higher levels of harassment, being asked to remove masks so that their tips might correspond to attractiveness. Black workers reported race-based discrimination and harassment from customers. For Black women, this combination has resulted in an ongoing violation of workplace rights.
- Due to these challenges, Black women are leaving the industry but are more resilient than others
The report shares that, given declining wages and working conditions, over one third (36 percent) of Black women are considering leaving the industry. This figure is lower than the 41 percent of white men surveyed who said the same. The report credits this to the “comparative resilience of Black women restaurant workers and commitment to their profession,” urging the restaurant industry to invest in their retention. This data could also be due, as the report finds, to the fact that Black women are more likely to have fewer employment options. Of Black women who are considering leaving, more than half surveyed said that “a full, stable, livable wage” would keep them in their jobs.
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Bringing everyone to the table
Given the racialized tipped minimum wage and the statistics in the One Fair Wage report, improving conditions for the millions of workers nationwide is a tall order. What is the best way to win big demands? Bring everyone to the table. “Women of color have been leading this fight,” said Saru Jayaraman, President of One Fair Wage. “We have been working for a long time to put this ballot measure forward, and we are so grateful for the collective effort to win what workers need.”
A strong ecosystem of organizations in DC helped to secure this historic legislation, working together to lobby, canvass, and spread the message. As a local of the largest hospitality union in the country, UNITE HERE’s Local 25 weighed in on the political urgency of fair wages: “Workers in the service industry have had enough of poverty wages,” said Paul Schwalb, Executive Secretary-Treasurer of Local 25. “Wage theft is a significant issue in the DC restaurant industry—one exacerbated by the tipped wage—which disproportionately impacts women and workers of color.” Even though members make significantly more than the tipped wage due to contract protections, the union wanted to help raise standards for all tipped workers in the city.
The Metro DC Democratic Socialists of America (Metro DC DSA)—a chapter of the national grassroots organization, with almost 100,000 members nationwide organizing against political and economic inequality—also helped bring the ballot measure across the finish line. Aparna Raj, an organizer with Metro DC DSA, told NPQ that the chapter unanimously voted to endorse the measure because “we are workers in DC who want to see a restaurant industry that works for everyone.” Some members of the chapter are themselves tipped workers who wanted to improve standards for all the city’s tipped workers, from restaurant workers to nail technicians and car washers.
In 2020, as sociologist Jamie K. McCallum writes, “the category of ‘essential’ worker became a synecdoche for our risk-intensive economy.” The COVID-19 pandemic called attention to this inequality in the way that the economy operates, inspiring frontline workers, who were being told to risk their lives or lose their livelihoods, to take a stand. And while the pandemic had disastrous effects on almost every industry, from agriculture to manufacturing, bars and restaurants were decimated by deaths, quits, layoffs, and closures. Research shows that in early 2020, line cooks were more likely to die of the virus than healthcare workers.
Restaurant workers in DC were laid off during the pandemic with little savings and were not paid to stay home. When restaurants reopened, the workers risked contracting COVID to earn a paycheck and dealt with abuse from customers over mask and vaccine requirements. Many workers in the food industry and elsewhere quit their jobs over issues such as low wages, weak safety protocol, or tenuous employment. Now more than ever, workers are unwilling to return to jobs that do not account for the economic hardship of the past two years or otherwise treat them as disposable.
Understanding the significance of this political moment, UNITE HERE Local 25 mobilized members working in hotels and restaurants to have one-on-one conversations around the clock in October and November, knocking on 10,000 doors in the city. “UNITE HERE’s field program takes substantial resources, but more importantly succeeds because of the power that comes with workers sharing their stories with voters,” Schwalb explained. “It’s one thing to read about trying to live on a tipped wage in the news. It’s quite another to talk directly to workers who’ve struggled with it themselves.” Making everyday reality for working people into a political issue is key to creating change.
Metro DC DSA worked hard to secure widespread chapter buy-in behind the Initiative 82 campaign because they knew that a campaign of such magnitude would require many helping hands. The chapter has experience taking on legislative and electoral challenges: Raj noted that in DC’s 2018 primary campaign season, MDC DSA knocked on 40,000 doors for endorsed DC Council candidate Zachary Parker, who won his election. They also learned from their defeats and, for example, from the restaurant industry’s misinformation campaign around Initiative 77, the 2018 ballot measure to bring the tipped hourly minimum wage up to $15. For this campaign, Raj said, they started early and built a full-fledged volunteer operation to incorporate research, worker outreach, and widespread communications. The chapter was able to mobilize volunteers coming from a diverse and strategic set of backgrounds from their 2500-member chapter, including tipped workers, former campaign staff, communications workers, researchers, and more. DC movement groups were able to take on such an outsized opposition campaign, Raj said, because of volunteers “who were willing to put in whatever time they could, whenever they could, to try to make DC a little more livable for people.”
Winning is the first step
The organizations that helped pass Initiative 82 are hopeful and determined that the bill’s implementation will increase equality in the district. Jayaraman expressed excitement that the district has spoken up for real change. “We’re so thrilled with the incredibly historic passage of One Fair Wage in Washington, DC—providing tipped workers with a full minimum wage with tips on top for the first time since Emancipation,” Jayaraman told NPQ. “This victory is one of several victories happening for workers right now as millions—for the first time at this scale in the nation’s history—refuse to work for subminimum wages and demand higher wages and greater respect across the country.” She hopes other states will follow in the city’s footsteps in the coming year.
Shortly after Initiative 82 passed, however, Mayor Muriel Bowser stated in a press conference that although she acknowledges the majority vote, she plans “to partner with industry to facilitate conversation.” Given this, activists are wary that the initiative will be watered down or otherwise undermined, a valid fear considering that Initiative 77 passed by 55 percent of the vote in spite of heavy lobbying against it by the restaurant industry only to be repealed and overturned by the DC Council. Restaurant industry representatives claimed that raising the base wage for tipped workers would make matters worse, arguing that tipped workers would lose their jobs, restaurant patrons would tip less, and businesses would move to a no-tipping model.
But this trick won’t work a second time. In the face of comments by the mayor and councilmembers about working with the industry to oversee implementation, and restaurant owners’ insistence that raising wages means implementing service charges that will burden consumers, organizers are prepared to reignite public engagement. “If Mayor Bowser tries to water down Initiative 82, we’re ready to remobilize our volunteer campaign operation,” said Raj. “We knocked on 18,000 doors across five different wards in just two months this year. If there’s an attempt to undermine democracy and the resounding will of the voters, we’ll revisit those doors and visit new ones to mobilize them for legislative advocacy.” In both iterations of the vote, the highest support came from areas of the city with the highest numbers of Black and working-class residents. Upholding the will of the people to pass Initiative 82, in other words, is a matter of democracy.
Democracy works best when a public is already mobilized. Building a popular base for legislative change takes time and effort, years of lobbying, months of uphill conversations, and weekly canvasses. But since the people of Washington DC already turned out to vote in favor of the city’s wage initiatives, they will hopefully be ready to act if elected officials decide to overturn the decision.
Passing Initiative 82 is not only about higher wages for the thousands of tipped workers that live in Washington, DC—and the 5.5 million tipped workers nationwide. It is an effort to liberate all kinds of workers—Black, female, disabled, and undocumented—from workplace discrimination. This freedom is crucial to democracy of any kind—especially one that seeks to overcome 21st century capitalism.
