November 8 marked the one-year anniversary of District of Columbia voters passing Initiative 82, a ballot measure to eliminate the city’s tip credit.
Ever since its passage, the actual implementation of the measure has been plagued by procedural delays and overwhelming concerns from restaurants, employees, and diners alike who are worried about the future of the restaurant scene in the nation’s capital.
A survey of over 100 local restaurants earlier this year founded these concerns: 92% of operators said they would be forced to raise prices, 85% said they would be forced to reduce tipped positions, and 70% said they would implement service charges to try to survive the wage hikes. Early data suggests that these consequences are already playing out just one year in.
Data from the Bureau of Labor Statistics shows that since Initiative 82’s first wage hike occurred on May 1, 2023, full-service restaurant employment has dropped 2.4%, roughly 700 jobs in just a few months.
This is a complete 180-degree turn from industry growth last year: during the same period, full-service restaurant employment grew nearly 4%. This year’s downturn marks a roughly 6-percentage point decline in employment growth.
On top of that, Washington, D.C. community Reddit users have compiled a rapidly-growing list of restaurants that have switched to using service charges. Since Initiative 82 passed, over 200 local restaurants have implemented these charges. As a result, D.C. servers and bartenders have reported seeing fewer tips in their pockets.
The District has also seen a wave of restaurant closure announcements. Most recently, local favorite bakery Buttercream Bakeshop announced it would be forced to close as “operating costs have risen about 29%” in the city, but additional price increases would be untenable to keep customers in the door.
While One Fair Wage and other labor activists push states and localities around the country to follow D.C.’s lead, the District is already experiencing the serious harm tip credit elimination can cause.
Lawmakers and diners everywhere should take note.