Lessons from D.C.: Why “$30 by ‘30” Wage Plan Could Leave Servers with Less

Mr. Mamdani’s favorite eating spots will not be spared.

Megan Bucknall / Unsplash

Zohran Mamdani has made food central to his politics, using New York’s restaurants and street vendors to sell voters on a more generous city. But his “$30 by ’30” minimum‑wage plan, paired with the progressive crusade to end the tipped‑wage system, could leave the very industry that sustains that vision struggling to make ends meet. MI’s Jarrett Dieterle takes a closer look. (Opinions are those of the author.)

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New York City mayoral candidate Zohran Mamdani has famously built much of his campaign around his love of food, including frequently sharing his favorite eating spots around town. But the Democratic Socialist’s “$30 by ‘30” campaign to raise New York City’s minimum wage to $30 by 2030 portends troubling winds ahead for the city’s beloved dining scene.

Progressive cities around America have pushed their minimum wage rates to unprecedented highs, with many now creeping north of $20 per hour. Many are going even further, however, by also eliminating the tipped-wage system for restaurant and hospitality sector employees. These rules allow restaurant owners to pay servers and bartenders below the minimum wage as long those employees can make up the gap in tips.

For over half a century, this tipped-wage structure has allowed America’s dining scene to flourish, with New York City becoming its leading light as the culinary capital of the world. But right on cue, Mr. Mamdani’s plan is being aligned with a renewed push by progressive New York legislators to eliminate the tipped-wage system, which would require restaurant workers to be paid the same minimum wage as all other tipped-wage positions. Legislation has been percolating in Albany in recent years that would phase out the tipped wage by 2028, with a prominent “Living Wage for All Coalition” now launching to guide the effort to fruition.

Behind the coalition is the group One Fair Wage, which has been spearheading a systematic effort to eliminate the tipped-wage system in progressive jurisdictions across America. One Fair Wage has seen success in large cities such as Chicago and Washington, D.C., but as these policies take hold, the economic reality is starting to bite.

D.C. passed a 2022 ballot initiative, heavily backed and funded by One Fair Wage, in which residents voted to repeal the district’s tipped-wage structure. Prior to the initiative, D.C. had set the minimum wage for tipped employees at $5.35. With the initiative’s passage, the minimum wage for restaurant workers was set to increase just over $16 an hour—matching the city’s overall minimum wage rate.

Almost immediately, restaurants in the district started adding 10-20 percent “service fees” onto customer bills to make up for the near-tripling in their labor costs. At the same time, D.C. experienced an almost 5 percent decline in full-service restaurant and bar jobs between when the initiative officially took effect and December 2024. This was not merely a result of macroeconomic headwinds or other variables, as surrounding Virginia and Maryland counties only saw declines of 0.84 percent.

Restaurant workers themselves ended up suffering most. Before the tipped-wage system was eliminated, many D.C. servers reported earning up to $40 to $50 per hour. In the wake of the initiative, total tipped worker earnings fell by nearly $12 million dollars, with workers seeing their hours cut and tips reduced.

Mugged by this economic reality, the Washington, D.C. city council voted this year to partially repeal the 2022 initiative and reduce the scheduled rate hikes for tipped employees. D.C. Mayor Muriel Bowser was in favor of returning the wage all the way back to below $6, as it was prior to the initiative. Chicago has similarly experienced troubling employment declines in the restaurant sector in the wake of its tipped-wage elimination.

Despite these clear lessons, the push to overturn the tipped-wage system has not lost steam, and New York City is the next target. Mr. Mamdani’s favorite eating spots will not be spared.