Arguments

Dignity Included

The passing of Initiative 77 tomorrow would mean the political recognition of a value that restaurant owners have been reaping for free.

By Stuart Whatley

Tagged D.C.InequalityLaborwagesWashington

There is a straightforward moral case for Washington, D.C.’s Initiative 77, a ballot measure that would raise the minimum wage for restaurant servers and other tipped workers from $3.33 to $15 per hour by 2025. Elise Gould and David Cooper of the Economic Policy Institute have marshaled ample evidence to show that the current tip-wage structure contributes to racial and gender inequities, poverty, and widespread wage theft. And others have identified the reliance on tips as a factor behind the high rates of sexual harassment for restaurant workers.

Meanwhile, most of the arguments against Initiative 77 are specious. It is said that restaurant owners will be forced to pass payroll costs on to consumers; but that is precisely what the tipped-wage model already does. It is also said that higher meal prices will prompt D.C. restaurant-goers to “vote with their feet,” as if the patrons of Cafe Milano in Georgetown will suddenly stampede across the Key Bridge to save a few bucks in Arlington.

A more plausible argument against Initiative 77 is that waitstaff will be the first to suffer, in the form of reduced hours or layoffs. That may well be true in the case of some restaurants that are already struggling. Yet as Jared Bernstein and Ben Spielberg  note in The Washington Post, in the eight states that have already done away with the lower minimum wage for tipped workers, “the restaurant industry is doing well … Employment growth and sales are strong, and tipping continues apace.”

All told, there is little reason to think that bringing the minimum wage for servers up to the same level as all other hourly paid jobs would upend D.C.’s restaurant industry. The city is awash in lobbyists and other expense-account-wielding professionals (see: Scott Pruitt) who aren’t going to be deterred by an uptick in meal prices. Moreover, the District has higher income inequality than any state in the union, so any progressive redistributive effect would be highly valuable. Most likely it would provide but a modest correction to injustices and inconsistencies in the labor market, and businesses would adjust their cost structures accordingly over the next seven years.

Still, it is interesting that Initiative 77 has become such a political flashpoint, not least for the precedent it would set for a significant category of labor.

In Edward Bellamy’s 1888 novel, Looking Backward, the protagonist, Julian West, falls asleep in 1887 and wakes up 113 years later in a (rather banal) classless, technology-driven utopia. Despite the future society’s many marvels, West is surprised to find that it still has people “waiting on tables,” a task that he considers to be “menial.” His hosts inform him that the concept of menial labor has become a “strangely artificial idea,” because they no longer recognize any “sort of difference between the dignity of the different sorts of work required by the nation.”

Bellamy got plenty of things wrong in his prophecy; but his point about the endurance of table service and certain other “occupations not requiring special skill” turned out to be astute. Today, waiting tables is still considered a “low-skill” job, which is why it commands low wages. Yet it is an occupation for which there will be continued demand, regardless of other large-scale technological disruptions to the labor market.

Table service, after all, is one of the primary attractions of the dining-out experience, precisely because it involves human interactions (the same applies to bar tending). Rational market participants whose only concern is to maximize the marginal utility of every dollar can find more efficient ways to satiate their hunger (or to get drunk). The reason that restaurant patrons are willing to pay highly marked-up prices for their meals (and alcohol) is the experience.

Anyone who has ever waited tables knows that it is difficult work, requiring mental attentiveness and the “emotional labor” necessary to elevate the dining-out experience above that of simple takeout from a “fast casual” establishment. Which is to say, it isn’t really “low-skill” work at all, but rather skilled work of a different kind.

The introduction of a minimum wage, then, could be understood as the political (and pecuniary) recognition of a form of value that restaurant and bar owners have been reaping for free. To be sure, tipping does help to make up for some of this free-riding. But a gratuity is, by definition, something that is residual and negotiable. And the fact that poverty rates are higher among tipped-workers in the states where the “tipped minimum wage” is lower than the standard minimum wage suggests that it does not go far enough.

In The Experience Economy, the business consultants Joseph Pine II and James H. Gilmore describe a “long-term structural shift in the very fabric of advanced economies,” driven by the fact that “goods and services are no longer enough to foster economic growth, create new jobs, and maintain economic prosperity.” (Emphasis theirs.) They contend that the “staging of experiences” will become the most important “form of economic output” in the coming decades, with experiences serving as a commercial offering that is “as distinct from services as services are from goods.” Whereas a service takes the form of “intangible activities carried out on [one’s] behalf,” an experience, they write, allows one to enjoy “a series of memorable events that a company stages—as in a theatrical play—to engage him in an inherently personal way.”

That sounds a lot like what people already expect when they dine out. And if Pine and Gilmore are right about the future composition of the economy, then the kind of social and emotional labor that is currently regarded as “menial” and “low-skill” could become all the more valuable. The question is whether it will be properly remunerated.

And so, whether or not Initiative 77 would have a significant impact on the D.C. restaurant scene, it, along with other similar measures that have been popping up across the country, could nevertheless become an important bellwether for how consumers and employers appraise social and emotional labor in the future. Even with universal access to “skills training” and “continuing education,” not everyone is going to find employment in the “high-skill” jobs of the future. But if less educated workers can provide the enjoyable, meaningful experiences that many consumers are already willing to pay for, then it stands to reason that their employers should pay them a living wage for it.

Read more about D.C.InequalityLaborwagesWashington

Stuart Whatley is Deputy Editor at Project Syndicate.

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