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DC Ballot Initiative 77 - Eliminating the Tipped Minimum Wage - Vote Is on June 19, 2018

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I received voting information from the DC Board of Elections the other day but didn't really pay much attention to it.  I did notice there were a couple of ballot initiatives up for vote.

Then today, the DC restaurant industry launched a PR campaign (I noticed it on Instagram) voicing their opposition to Ballot Initiative 77.

Some pretty big names in the business are on the No list, including Aaron Silverman, Jeremiah Langhorne (The Dabney), the Tail Up Goat folks, Sebastian Zutant/Lauren Winter, Cedric Maupillier, the Trabocchis, to name a few.

In the spirit of Equal Time:

Here is the No argument:  Vote No 77

One Fair Wage, the Yes campaign being lead by Restaurant Opportunities Center United

Stories from:

WAMU.

Washingtonian

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6 minutes ago, Tweaked said:

I received voting information from the DC Board of Elections the other day but didn't really pay much attention to it.  I did notice there were a couple of ballot initiatives up for vote.

Then today, the DC restaurant industry launched a PR campaign (I noticed it on Instagram) voicing their opposition to Ballot Initiative 77.

Some pretty big names in the business are on the No list, including Aaron Silverman, Jeremiah Langhorne (The Dabney), the Tail Up Goat folks, Sebastian Zutant/Lauren Winter, Cedric Maupillier, the Trabocchis, to name a few.

In the spirit of Equal Time:

Here is the No argument:  Vote No 77

One Fair Wage, the Yes campaign being lead by Restaurant Opportunities Center United

Stories from:

WAMU.

Washingtonian

Interesting. Waiting with baited breath for Ed Lazere and the DCFPI to weigh in 🙄. Won't be long, I'm sure.

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I'll be issuing an opinion on this, but I need a couple of days to familiarize myself with the specifics of the Initiative.

Keep in mind that I have acquaintances with many restaurateurs, and have also spoken out on behalf of employees for ROC-DC (yes, that's me, years ago):

ROC-DC.jpg

In other words, my position is sympathetic to both management and labor, and is largely malleable at this point, with the caveats that my tendency is to support people who need help the most (in other words, I tend to support the underprivileged), and I have, of course, been very vocal over the years in eliminating the tipping system, because servers are absurdly overpaid relative to line cooks, dishwashers, busers, and AGMs. To date, I have witnessed attempts at eliminating tipping, and it has generally only worked at the highest-end restaurants (and places like The Swiss Bakery), so in practical terms, I'm going into this with the attitude that the elimination of the tipped minimum wage system must be done by everybody, or it will fail, because if it's done piecemeal, then restaurants won't be on even footing with one-another. With that in mind, the big question for me is: What are the specifics of this Ballot Initiative, and what are the arguments of the "Vote No" letter - I'm probably going to parse the letter online, sentence-by-sentence, as I read it, giving my thoughts as I go. Stay tuned ...

---

In the meantime, do you know whose voices aren't being heard? Those of line cooks, dishwashers, busers, and AGMs. If anyone in this position wishes to write me in order to voice an opinion here, but fears recrimination from their employer, I GIVE YOU MY ABSOLUTE WORD OF HONOR THAT YOU WILL REMAIN ANONYMOUS, NOBODY WILL EVER KNOW WHO YOU ARE, AND THAT YOUR WORDS WILL BE HEARD HERE. I apologize for the sloppy Google Translate, but: 

DÉ A TODOS MI PALABRA ABSOLUTA DE HONOR QUE TODOS QUEDARÁN ANÓNIMOS, NADIE SABRÁ QUIÉNES SON, Y QUE SUS PALABRAS SE IMPRIMIRÁN AQUÍ.

Email me at donrockwell@dcdining.com in strict confidence with your name, occupation, place of employment and thoughts about this issue. In a few weeks, I will display an anonymous list of all the comments I receive.

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How does each position affect diners?  Is there a scenario where the cost of dining goes down?  I'm not seeing it.  At best, cost of dining stays the same?

 

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1 hour ago, Ericandblueboy said:

How does each position affect diners?  Is there a scenario where the cost of dining goes down?  I'm not seeing it.  At best, cost of dining stays the same?

Idk... if it's redistribution, at best it stays the same? But maybe not, right, b/c so much of current FOH is cash/tax free. If they pump up people's base, then the restaurant is on the hook for the taxes (maybe double tax? employees pay payroll and business has to pay?)

I think more likely prices go up. Going to be very hard for a FOH person who makes $25-30 an hour understand why they are making $15 an hour now, even if it is helping their hombres in the the BOH. People love redistribution when it's not their money being redistributed.

Worst case, FOH revolt and they can't find staffing and wages have to go up considerably, and thin margins become thinner, a restaurants shut down... that's my prediction. 

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2 hours ago, Simul Parikh said:

Idk... if it's redistribution, at best it stays the same? But maybe not, right, b/c so much of current FOH is cash/tax free. If they pump up people's base, then the restaurant is on the hook for the taxes (maybe double tax? employees pay payroll and business has to pay?)

I think more likely prices go up. Going to be very hard for a FOH person who makes $25-30 an hour understand why they are making $15 an hour now, even if it is helping their hombres in the the BOH. People love redistribution when it's not their money being redistributed.

Worst case, FOH revolt and they can't find staffing and wages have to go up considerably, and thin margins become thinner, a restaurants shut down... that's my prediction. 

In that I don't work as a server or a bartender now I have no idea how much is cash/tax free.   I strongly suspect it is far far less than it used to be (and possibly far less than you imagine)  Everyone pays by card now versus in the past.  Tips get written on the cards.  That info is available for state and national taxing authorities.  In the last few weeks I heard of a place that has been operating for a long long time (2 decades) that caters to young twenties and is very cash oriented.  The city snagged the operators, the operators paid a sizable fine and now all tips are accounted for and added into reporting. 

But again I'm not on the floor.  I don't know for sure.  

This is a thorny issue.  However this is decided it will result in winners and losers.  I do acknowledge that from the No Vote piece...those restaurants on the margin will be hit hard if the laws change.  They are the ones that will at minimum cut hours and at worst case close. 

Too many people in the industry make too little money.  That is obvious. 

If the rules change there will be winners and losers.  As it is now, there are a lot of folks on the too little income losing side of the ledger. 

Get Apple and Google to underwrite everything.  They have money to burn.    In fact here is a great DC oriented solution.   Take the political money out of the pols and lobbyists pockets for a year or two.  That would be enough to boost all the restaurants' peoples salaries beaucoup and then some for a good five years of better income and would keep prices stable. 

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Please listen to Cizuka Seki, Clementine Thomas and Jill Tyler here.  There's a significant risk this will be devastating to the local restaurant scene--including FOH employees--and especially to the young people who have taken the chance at opening the sorts of personal, idiosyncratic and neighborhood places that most of us love.

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In this podcast--which you should listen to for several reasons, most importantly, what they have to say about DC Initiative 77--there's a "rapid fire Qs" segment at the end in which Jill Tyler (Tail up Goat) is asked "What's your idea of the perfect D.C. date night?"  Her immediate response:  "The bar at 2 Amys, no question"--and Cizuka Seki (Seki) and Clementine Thomas (Chez Billy) readily concur.  Wise women:  heed their advice (not only on 2 Amys, but 77, too).

Great listen! The Initiative 77 was clearly more current/pressing, but I would have also have liked to hear a lot more in being a female head of kitchen, which they started on but didn't get to go into detail.

EDIT: As noted below - head of kitchen is the wrong phrase - I meant women opening/managing the restaurants and being in leadership roles. 

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Just now, Simul Parikh said:

Great listen! The Initiative 77 was clearly more current/pressing, but I would have also have liked to hear a lot more in being a female head of kitchen, which they started on but didn't get to go into detail.

None of them is a "head of kitchen" (although Cizuka is, I believe, heavily involved on the "BOH" side)--they were celebrating the increasing role of women in opening, owning and managing restaurants, much of which is threatened by 77.

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It's really interesting how this is being promoted.

- The ROC's main argument says that this is for the tipped wage workers, but tipped wage workers are overwhelmingly against I77. Sounds kind of paternalistic to tell people what they should be in favor of or against.

- The policy advocates say that they problem is that certain races and certain types of people are disadvantaged by the current system. But, if this was the case, for/against should be proportionate to race.

- If tipped waged workers make significantly more than $15/hour (minimum), and then their wages are raised to $15, a service charge is added, but if people still tip, then aren't those same disadvantaged workers still going to make less money? Doesn't seem to fix the problem.

- If the real, actual goal is to raise the wages of the back of the house, I don't see how this does that unless 1) A service charge is added 2) No tips are allowed 3) These charges are completely pooled and distributed in some sort of pre-determined way (%age per person, or based on hours worked, or seniority? What is fair?)

- Some states of allowed tips to be pooled and distributed to reduce the disparity between FOH and BOH. Maybe this is a better idea?

- Why is this the one service industry where tipping makes up for the fact that the business owners don't have a strong model in place?

This here is complete nonsense - 

"Some question why no tipping works in most of Europe. “What you experience in other countries is order-taking,” Chaisson says. “The U.S. is revered as the best service in the world. I would strongly argue that is a direct result of our tipped system.” Hollinger and others say there are far fewer servers and bartenders working at one time in European restaurants and generally, they’re hawking food and drink instead of experiences.

“I view servers as a professional class of commissioned sales people,” Greenbaum says. She reasons that servers at IHOP shouldn’t make the same amount as upscale restaurant workers. “They don’t take home wine books to study. They don’t know where their products are from.”

Operators fear that this class of professional tipped workers would potentially flee D.C. or exit the industry if they’re staring down job cuts, reduced shifts, and closures on top of what they perceive to be capped earning potential."

- No tipping works just fine in the rest of the world because of living wages, strong welfare states, and the fact that tipping is not traditional. It is laughable to say that the service isn't as good in Europe. Absolutely laughable. I lived in Denmark for a year. I've traveled the world. No tips in India and Thailand, yet incredibly friendly and helpful service. Limited tipping on the continent, and the service is just fine. This is the one bullshit argument that rivals the complete bullshit argument that "America has the best healthcare in the world, so any changes is going to ruin American Medicine". That just isn't true, b/c the premise isn't true - American doesn't have the best healthcare in the world. Similarly, American customer service is not significantly better than service in most of the world. So, this isn't a good argument at all.  

- We've just decided that a hot 22 year old with no training that serves at a mid range restaurant deserves $40-60k a year.

- That podcast revealed something quite interesting - all 3 women said that the current model allows tipped wage workers to have a living wage AND get to pursue other passions - music, art, writing. That is CRAZY. Customers have to subsidize their passions? I've never heard of another non-professional person say that is expected as a part of your job. Nuts. 

I have no dog in the fight. I think it will be interesting how it shakes out and curious to see economic analyses of the 7 states that already have 'one wage'. 

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Virtually all of the bartenders I've known over the years, including those that have earned high bartending income don't dine in the restaurants that grab attention here.  They can't afford it.  Needless to say the majority of BOH staffers can't afford it either.  Not the majority in either BOH or FOH, the vast vast overwhelming volume of all workers.  When you see Jose Andres at the Capital One Center, he is the exception to the rule.  (more power to him-he can afford seasons tickets because he is also a successful business person and is not in the kitchen when the games are being played).  

Its interesting to read the articles and comments from tipped workers.  I don't live in the District so I'm not voting on the issue.  My liberal heart would normally side with the ROC side.  In this case I have somewhat more knowledge on the issues than most of these big political issues from which I'm directly divorced.  My gut and experience tell me that I should vote against it.  Neither of the votes are going to get BOH of FOH workers to dine at the restaurants that garner the most appeal in this forum or get listed among the best restaurants in DC.  When industry regulars go to Columbia Room for industry hours they are often/usually drinking shots of Old Overholt and Natty Boh.  Those are not the types of cocktails that get rave reviews.  Old Overholt and Natty Boh is a cheap drink. 

If I lived in the District I'd probably vote against it.  Either way at this end of the spectrum there will be winners and losers.  If it passes I suspect some restaurants will drop out and/or cut workers hours.

Seriously instead of having critical votes on this stuff where nobody with a lot of money is going to make it or break it: turn to this group of businesses and have them subsidize low wage workers salaries.  (somewhat facetious/somewhat not)

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1 hour ago, Tweaked said:

José Andrés is No on 77

Does anyone know *anyone* they trust who's actually in favor of 77 and can make a plausible argument in its favor?

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This thread really ought to be somewhere more prominent -- perhaps even in DC Restaurants.  The stakes are very high for the restaurants this community most cares about.  For those who are interested, this is an event this evening worth attending.

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There were pro-77 representatives going door-to-door in our neighborhood on Sunday, and I was willing to hear them out because like many here I don't actually *know* what the good arguments are for this proposal from the service side.  I opened with "We have several friends and acquaintances who are servers are bartenders, and they have all spoken out against this, so we are inclined to vote "No" right now".  She thanked me for my time and walked away.  There wasn't even an attempt to make their case once they knew we were somewhat knowledgeable about this.

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On 5/23/2018 at 10:38 AM, Tweaked said:

José Andrés is No on 77

From ThinkFoodGroup: Our 25-year operating experience, in both polished casual and fine dining restaurants, consistently shows that servers earn appreciably more than back-of-house positions, and well above the minimum wage when you combine the tipped wage from employers and total tips from guests. As it stands, the system is designed to allow servers to earn as much as 100% or more per hour than cooks. 

It is absurd, baffling and somehow hopelessly unsurprising that in the 21st century, in one of the wealthiest regions of the wealthiest country ever that some topside employees rely on the charity of strangers to earn their wages and they still make considerably more (17% more) than those in the engine room.  Customers don't want to charged more, but are happy to tip more.

Hourly mean wage for cooks in DC is $14.93

Hourly mean wage for servers in DC is $17.48.  

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On 5/29/2018 at 1:51 PM, Poivrot Farci said:

It is absurd, baffling and somehow hopelessly unsurprising that in the 21st century, in one of the wealthiest regions of the wealthiest country ever that some topside employees rely on the charity of strangers to earn their wages and they still make considerably more (17% more) than those in the engine room.  Customers don't want to charged more, but are happy to tip more.

Hourly mean wage for cooks in DC is $14.93

Hourly mean wage for servers in DC is $17.48.  

Even at the exact same wage rate, I would *much* rather be a server than a line cook or a dishwasher. Those folks work much harder, and are paid considerably less.

You want to discuss “unskilled labor?” Look at the American server; not the line cook or dishwasher.

And I would *never* be an “AGM” (a euphemism for gopher) unless there was an equity arrangement. 

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I am not really sure I understand the issue from the "pro-77" perspective.  I always thought that although tipped employees have a lower base minimum wage, that if they do not receive enough tips to meet the minimum wage for non-tipped personnel, the restaurant has to make up the difference.  Thus, under the current system tipped employees are already guaranteed minimum wage.  If that is the case then it would support an inference that the "pro-77" faction is up to something other than to ensure tipped employees receive minimum wage.  One bartender I spoke to said she would look for jobs outside of DC if Initiative 77 passes.  In an industry that already appears understaffed, this does not sound like a good thing.

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22 minutes ago, DonRocks said:

Even at the exact same wage rate, I would *much* rather be a server than a line cook or a dishwasher. Those folks work much harder, and are paid considerably less.

You want to discuss “unskilled labor?” Look at the American server; not the line cook or dishwasher.

And I would *never* be an “AGM” (a euphemism for gopher)  unless there was an equity arrangement. 

None of this is reason to support 77, right?  Just curious:  I assume that one "solution" to this inequity would be to pool tips and share them equally with the kitchen staff.  I also assume restaurants have tried that -- but that it hasn't worked.  Why not?  Does it make it much harder to retain good waitstaff?

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4 minutes ago, Marty L. said:

None of this is reason to support 77, right?  Just curious:  I assume that one "solution" to this inequity would be to pool tips and share them equally with the kitchen staff.  I also assume restaurants have tried that -- but that it hasn't worked.  Why not?  Does it make it much harder to retain good waitstaff?

My understanding is that if you're not paying minimum wage (without considering tips) to the front of the house, it's illegal to pool their tips with the back of the house.  There are legal moves afoot to change this (actually from the current administration) but that would also allow managers (and employees suspect owners as well) to share in the pool, so it's not supported by many in the business.

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My comment above has nothing at all to do with Initiative 77, which I purposely haven’t read yet.

(Apologies - I should have made that clear: I’m typing on a cell phone in a waiting room.)

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1 minute ago, zgast said:

My understanding is that if you're not paying minimum wage (without considering tips) to the front of the house, it's illegal to pool their tips with the back of the house.  There are legal moves afoot to change this (actually from the current administration) but that would also allow managers (and employees suspect owners as well) to share in the pool, so it's not supported by many in the business.

Oh, right, thanks, that makes sense -- explains why the efforts to do so have been by adding a mandatory, per customer "upcharge" and forbidding tips, a la Danny Meyer (a tactic that has not really worked anywhere in DC, far as I know).

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5 hours ago, Poivrot Farci said:

From ThinkFoodGroup: Our 25-year operating experience, in both polished casual and fine dining restaurants, consistently shows that servers earn appreciably more than back-of-house positions, and well above the minimum wage when you combine the tipped wage from employers and total tips from guests. As it stands, the system is designed to allow servers to earn as much as 100% or more per hour than cooks. 

It is absurd, baffling and somehow hopelessly unsurprising that in the 21st century, in one of the wealthiest regions of the wealthiest country ever that some topside employees rely on the charity of strangers to earn their wages and they still make considerably more (17% more) than those in the engine room.  Customers don't want to charged more, but are happy to tip more.

Hourly mean wage for cooks in DC is $14.93

Hourly mean wage for servers in DC is $17.48.  

As an aside I believe there are big holes with regard to the mean wage for a server.   Years ago, our bartending school got calls and worked with the person overseeing the general data and specifics for certain job categories for the BLS.  In the course of the conversations I asked her how they aggregated data for bartenders and servers.  Between tip income, unreported tip income, people working part time, people not counted by employers, there were clear "holes" in the data.  The particular categories/  servers/bartenders/other staff on tips   had a number of areas where data collection fell through.  The BLS knows it.  OTOH:  it is the best data available.  There is no other source that comes close to what they collect.

The other day I spoke with an ex student/ex instructor, long time bartender, varied experiences from strip clubs, to clubs to high volume, to name restaurants.  He is also well versed in today's craft bartending and has created various cocktails....and he is a cocktail geek.  Over the last 6-8 years he has worked in better name restaurants, and has invariably held down the busy shifts on Thursdays, Fridays, Sometimes Saturdays sometimes not  He has been the lead bartender at those last few places.

Boy is he against this ballot initiative, but he is also someone who can maximize earnings off of tips.  Even with that he mentioned today's environment is difficult for him to earn what he used to earn. 

None of which has anything to do with your comments above about the disparity in wages between FOH and BOH.  Additionally for most workers it remains a low wage job, any way you cut it.   So here we are in one of the wealthiest regions in one of the wealthiest nations....and I frankly can't see an easy way to change that dynamic to get those workers higher pay without significantly raising prices....and who knows how that effects the employers.

Or Apple, Google, and Amazon can underwrite those wages. 

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