A Living Wage

In November, Washington DC voters approved a measure to make the minimum hourly wage for tipped restaurant workers incrementally increase to $15.20 per hour by 2027. Tips will be on top of that wage, and owned by the tipped worker not their employers. 

DC restaurants may add a service charge to provide the resources to comply. When combined with DC’s 10% sales tax, prices may increase to the extent that diners gravitate to MD and VA restaurants. For example, consumers may balk at $25 beers.

What does this scheme replace?  DC restaurant owners paid tipped workers $5 per hour plus tips. If the total, with tips, did not amount to $15 per hour, the owners had to make up the difference. GA and VA are similar except the base rate is $2 per hour.

So a very large portion of tipped workers’ wages depend on the generosity of customers. A typical 20% tip on a $50 meal yields $10 which may go to the server in total, or be shared among members of the server staff.   A living wage depends on the volume of generous customers.

An informal survey of waiters and especially bartenders has suggested a very good income is earned by attentive, gregarious staff members. Most consumers reward really high quality service, often beyond the nominal 20%.

If the wait staff is not attentive or particularly gregarious, the 20% may become 10%, or even zero. Thus, people’s incomes can strongly depend on more than just taking orders and delivering food. The attentive and gregarious folks do well. The others find customers very tight fisted.

This suggests that the incomes of tipped workers very much depends on workers’ personalities. Introverts may find it difficult to earn a living wage, at least in this profession. That may seem unfair, but I expect such challenges are pervasive beyond tipped restaurant workers.

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