New Government Data Shows Initiative 82 is Hurting DC

It’s no secret the latest anti-tip credit experiment in the District of Columbia is devastating the restaurant industry. In fact, city councilmembers voted this week on a so-called “Restaurant Revitalization” bill as restaurants beg for relief. The actual provisions in the bill were dubbed “sweet and sour” – as they could have placed additional burdens on already-struggling restaurants.

Among other provisions, the vote gave a green light to restaurant service fees on customer checks up to 20%, a move many restaurants have implemented to adapt to rising wage bills. The Council killed a provision that would have sped up the elimination of D.C.’s tip credit to next summer instead of the original target year of 2027.

While the vote narrowly missed inflicting more pain on suffering restaurants and employees, new data sources show the industry is in need of true relief from Initiative 82.

Until now, many reports have used a sample survey to estimate the job impacts of Initiative 82 on D.C.’s restaurant scene. However, the Bureau of Labor Statistics’s Quarterly Census of Employment and Wages receives reported data from employers covering most (95%) of employees – and is the most accurate source when it comes to real-time employment trends.

This week, QCEW released its latest batch of data extending through September 2023, and the new comprehensive data shows Initiative 82 took a severe toll on full-service restaurant employment in Washington, D.C.

Despite full-service restaurant growth in early 2023 before Initiative 82 came into effect, the latest available data shows employment fell 2.7% between May 2023 (when the law came into effect) and September 2023. Last year during the same period, full-service restaurant employment grew 3.6%.

Source: U.S. Bureau of Labor Statistics Quarterly Census of Employment and Wages, Private Full-Service Restaurant (NAICS 722511) Employment in District of Columbia, Q1 2022 – Q3 2023.

This bolsters earlier reports of preliminary sample data showing job declines in D.C.’s full-service restaurant industry.

While tip credit elimination advocates are misleadingly pointing to D.C. as a case study for exporting the policy across the country, new comprehensive data shows the nation’s capital is really more of a petri dish for a bad experiment.