A new EPI Policy Center analysis shows that tipped minimum wage workers are better off in cities where they are paid the full minimum wage—and the restaurant industry in those cities continues to thrive. Senior Economic Analyst David Cooper finds that Washington, D.C.’s tipped workers would benefit from this “one fair wage” policy, just as workers in cities and states across the country have.
In June, D.C. voters overwhelmingly passed Initiative 77, which gradually raises D.C.’s tipped minimum wage over eight years until it is equal to the regular minimum wage in 2026. Opponents of the measure—led by the National Restaurant Association and the Metropolitan Washington Area Restaurant Association—claim that eliminating the tipped minimum wage would lead to layoffs, closures, and restaurant workers receiving less pay due to a decrease in patron tipping.
After looking at various economic indicators in “one fair wage” cities and states, Cooper finds that there is no evidence to support opponents’ claims. In Seattle and San Francisco, which have high minimum wages and no subminimum wage for tipped workers, tipped workers receive higher take-home pay than their counterparts in D.C. and restaurants big and small are operating successfully.
“Tipped workers are unambiguously better off in cities where tipped workers are paid the regular minimum wage, regardless of tips,” said Cooper. “If the D.C. Council chooses to overturn Initiative 77, which D.C. voters clearly voted to make law, they will be doing a disservice to some of the city’s lowest income workers with little justification beyond pressure from the restaurant industry.”
Other key findings include:
- Servers and bartenders in San Francisco earn 20 percent more per hour than their counterparts in D.C., and servers and bartenders in Seattle earn 7 percent more than their counterparts in D.C. Tipped workers in San Francisco and Seattle also have annual earnings closer to the earnings of nontipped workers than tipped workers in D.C.
- Tipped workers make up a larger share of the overall workforce in Seattle and San Francisco than in D.C., and similar shares of the nongovernment and private-sector workforces. Paying tipped workers the regular minimum wage does not appear to have reduced the prevalence of tipped worked in either of these cities.
- Tipped workers in D.C. are majority people of color. Most work full time, and they are more likely than nontipped workers to be D.C. residents. The median wage of tipped workers in D.C. is $14.41 per hour, including tips—just 44 percent of the median wage for nontipped workers.
- There are significant pay disparities within the tipped workforce in D.C. Black tipped workers are paid 23 percent less per hour than white tipped workers. Women tipped workers are paid 8 percent less per hour, and 20 percent less annually than their male counterparts.
- The poverty rate of tipped workers in D.C. is 13.7 percent—more than three times the poverty rate of nontipped workers. Tipped workers in D.C. also have higher poverty rates than workers in the retail sector, where wages also tend to be low.