Some Progressives Tried To Abolish the Tipped Minimum Wage. Now They're Backtracking.

Policymakers across the country are confronting the unfortunate—and predictable—economic results of prohibiting restaurants from paying servers a lower base wage supplemented by tips

By C. Jarrett Dieterle of Reason. 

"In recent years, one of the predominant policy initiatives of the progressive left has been raising the minimum wage in locales around the country. At the same time, left-leaning politicians have sought the elimination of what's known as the tip credit, which allows employers to pay restaurant servers and other tipped employees a lower hourly base wage that they then bolster with gratuities.

Just a few years into this experiment, however, policymakers are showing signs of an about-face on the tip credit's abolition as they grapple with the unfortunate, and predictable, economic results.

In 2022, Washington, D.C., made news headlines when voters passed Initiative 82. As originally designed, it would have repealed the tip credit and required servers to be paid the District's full statutory minimum wage by 2027. (D.C.'s minimum wage was $16.10 per hour in 2022, but has since risen to $18.40 due to inflation indexation.) Prior to Initiative 82, D.C. servers could be paid a $5.35 tipped wage, so long as they earned enough tips to make up the difference between the lower tipped wage and the higher traditional minimum wage.

D.C.'s Initiative 82 was just the beginning. One Fair Wage, a progressive group that lobbies against subminimum wages, quarterbacked an all-out push to eliminate the tip credit in jurisdictions across America. Chicago became the second prominent city to follow suit. States like New York, Connecticut, and Illinois also quickly saw legislation introduced to eliminate the tip credit at a statewide level. (Apart from this recent wave, a small handful of American states—including California, Oregon, and Alaska—have long operated without a tip credit).

But just when it seemed like momentum against the tip credit had reached its apex, progressive politicians started to see the writing on the wall. In the aftermath of the tip credit's repeal, D.C. saw a close to 5 percent decline in full-service restaurant jobs. Tipped worker earnings also dropped by just under $12 million—likely a result, at least in part, of restaurants reducing hours for staff in the face of higher labor costs. At the same time, many D.C. restaurants began implementing service fees or so-called auto-gratuity policies that added mandatory 10-20 percent charges onto customers' bills.

Mugged by this economic reality, D.C. Mayor Muriel Bowser called for the full repeal of Initiative 82. Ultimately, the D.C. Council settled for a partial repeal in 2025, maintaining at least some semblance of a tipped wage that sits below the traditional minimum wage into the years ahead (although the tipped wage eventually rises to 75 percent of the traditional wage by 2034). This was a familiar story: The council had previously repealed Initiative 77, a near-identical attempt to abolish the tipped wage that voters passed in 2018.

After Chicago moved to eliminate the tip credit, the Illinois Restaurant Association found that 89 percent of Windy City restaurants raised menu prices; another 79 percent responded by reducing worker hours. Again bowing to economic reality, the progressive Chicago City Council voted to freeze the tip credit's planned elimination, only to see the effort vetoed by Mayor Brandon Johnson. Eventually, a compromise was brokered to at least pause the tip credit at its current level for two years—which punts the issue until after Johnson stands for election again, allowing a potential successor to endorse a more lasting reversal.

In Michigan, a 2024 state supreme court ruling set the tip credit on the path toward elimination by 2030. But state lawmakers intervened last year, deciding to maintain a 50 percent tip credit in perpetuity after 2031. Notably, Michigan is currently governed by a Democratic trifecta in the governorship and both houses of the Legislature. The tip credit's revival garnered key support from Republican lawmakers to pass in a bipartisan fashion, before being signed into law by Democratic Gov. Gretchen Whitmer.

While progressive efforts to eliminate the tip credit may be motivated by an earnest desire to ensure waiters are paid more, the math isn't that simple. Requiring a server to be paid a $16 traditional minimum wage—up from a $5 tipped wage—might appear to raise their pay on paper. But this fails to consider several important factors.

Under our "No Taxes on Tips" new normal, raising the minimum wage for servers could lead to a partial reduction in tips, which under certain scenarios can result in less take-home pay for waiters once the taxman takes his cut. If more server earnings come in the form of "auto-gratuity" policies—which are treated as taxed wages under the law—then the tax repercussions may grow even grimmer.

But more broadly, these laws attempt to subvert basic economics. As of 2025, Bureau of Labor Statistics data show that D.C. restaurants shed over 1,600 jobs in aftermath of Initiative 82; meanwhile, between 2022 and 2025, restaurant job growth in the District declined by more than 8 percent. This is just one example. The fallout is the inevitable result of restaurants responding to labor costs that suddenly skyrocket, forcing establishments to cut worker hours and sometimes transition to quick-service models that require less hourly staff. And that's to say nothing of the diners who bear the cost with higher prices and new service fees.

"We're watching a beloved bar back, a beloved busser, a dishwasher have their jobs taken away," D.C. restaurant worker Valerie Graham told Reason in 2024. "Not because our owner-operator is an evil billionaire but because they're an independent business owner who had to make some business decisions and there's a callousness with which our industry is talked about."

To be sure, the tip credit has only survived in modified and reduced form in D.C., Chicago, and Michigan—and in the case of Chicago, the about-face is only temporary. But the partial reversals show the tip credit's elimination is not a foregone conclusion. Economic reality continues to rear its head."

California's Minimum Wage Hike

From Jeffrey Miron. 

"Firms respond to minimum wage hikes in multiple ways.

One study considers a 2023 California bill that raised the minimum wage for fast food workers from $16 to $20 per hour.

The researchers estimated

a 4.9–5.1 percent increase in fast-food prices and a 2.1–2.2 percent increase in full-service prices. … Additionally, [the] findings suggest that price increases reduced consumers’ demand for fast food by 3.9–4.1 percent and for full-service meals by 1.7–1.8 percent.

Further, the wage hike had

distributional implications, as lower-income households spend a larger share of their budgets at fast-food restaurants.

All in all,

this large, sector-specific minimum wage increase raised labor costs, [which] firms passed … through to consumers by raising prices, and the resulting decline in demand reduced employment.

Exactly what standard economics would predict."

The Hidden Problem With Democrats' $25 Minimum Wage Bill

The legislation would eliminate the tip credit for restaurant workers and other tipped employees—which has not worked out well in the past

By C. Jarrett Dieterle and Kurt Huffman in Reason.

"Across the country, progressive politicians continue to push for an ever-higher minimum wage. Whether it's New York City's Mamdani-led pursuit of $30 by '30, L.A.'s $30 "Olympic wage" for hotel workers, or Seattle's minimum wage for the gig economy, it's clear that the fight to raise the minimum is only escalating. Now, congressional Democrats have waded into the debate with the introduction of the Living Wage for All Act, spearheaded by Sen. Chris Murphy (D–Conn.).

Sen. Murphy's bill has garnered attention for seeking to increase the federal minimum wage from its current level at $7.25 per hour all the way up to a $25 per hour minimum in the coming years. (This would act as a wage floor, applying in any state that had a lower wage than the feds). But overlooked in the reporting so far is another key feature of the bill: its elimination of the tip credit for restaurant workers and other tipped employees.

The tip credit is what allows waiters and others in the hospitality industry to be paid below the statutory minimum wage on a per-hour basis, so long as their tips make up the difference. This legal structure has been a staple of the restaurant industry for over 60 years, and it often allows waiters to make far more than the minimum wage. (The national median wage for waiters is $27 per hour, according to the National Restaurant Association.)

Scrapping the tip credit could hurt both restaurants and tipped workers, especially when considering how customer behavior, tax law, and restaurant payroll decisions interact. First, phasing out the credit has the potential effect of reducing the amount that customers tip in the long term, as our culture could move away from the expectation of diners leaving voluntary gratuities.

Census Bureau research has found that when the tipped minimum wage rises, the employer-paid portion of server compensation rises, but tip income declines by a similar percentage, ultimately offsetting the increase. Tipping has become a cultural norm, which may make it a sticky habit that endures for a time, but in our era of tipping fatigue, it's also possible diners may welcome the opportunity to ditch tips.

A second consideration is how restaurants will likely respond to the tip credit's elimination. In our state-level "laboratories of democracy," we already can find a clue. Kurt Huffman, a co-author of this piece, owns and operates numerous restaurants in Portland, Oregon. Oregon has prohibited a tip credit for years, which has given Huffman firsthand experience with how restaurateurs often react to the tip credit's elimination.

Many restaurants in environments without the tip credit add mandatory service fees to checks or implement what are known as auto-gratuity policies. For instance, the restaurant may automatically tack on an 18–20 percent charge to a customer's bill. While this "auto-grat" ensures that a tip is paid by the customer, the catch is that the tip is no longer the property of the waiter but of the restaurant. The restaurant then usually keeps a portion of that tip (often anywhere from 25–40 percent) before distributing the balance to the employee.

That distinction matters. A mandatory service charge is not a tip under IRS rules. It is employer revenue; if the restaurant later distributes some or all of it to employees, the distributed amount is treated as wages.

This can, and often does, reduce the employee's take-home pay. If a restaurant keeps part of the mandatory service charge, as is customary, the worker may receive less than he or she would have received from a voluntary tip on the same check. The math gets worse under the new qualified-tips deduction, popularly known as "No Taxes on Tips." Qualified voluntary tips may be deductible from federal taxable income up to $25,000, but mandatory service charges and auto-gratuities are not eligible for such treatment.

Restaurants often adopt these service charges because they are afraid to raise menu prices. That is understandable, but it misses how guests process restaurant prices. As Huffman has observed from over thirty years in the restaurant business, customers do not treat all dollars on a check the same.

There are "menu dollars" and "manners dollars." A $20 salad plus a voluntary $4 tip does not feel like a $24 salad. The $20 is the price of the product; the $4 is a customary social payment. But a $20 salad with a mandatory 20 percent service charge collapses those categories. The restaurant has not avoided a price increase. It has moved the price increase to the bottom of the check, where it can feel like a surprise or a confiscated choice.

A final reality is that the locales that have recently moved to ax the tip credit have quickly come to regret the decision. Washington, D.C., prominently scrapped its tip credit in a 2022 ballot initiative. Under the new rules, the statutory minimum wage for waiters would rise from $5.35 per hour to the District's full minimum wage—a seemingly clear win for servers at first blush.

But on cue, D.C. experienced a nearly 5 percent decline in full-service restaurant and bar jobs in the wake of the tip credit's elimination. Tipped worker earnings reportedly dropped by $11.8 million, as many restaurants cut hours and waiters saw reduced tips. The results were so grim that the progressive D.C. Council voted to backtrack on the tip credit's full elimination.

In Chicago, which abolished the tip credit in 2023, 89 percent of restaurants have raised menu prices as a result of the higher labor costs, while 79 percent have cut worker hours, according to the Illinois Restaurant Association. As a result, Chicago's liberal city council also attempted to partially reverse course from its tip credit repeal. The effort was ultimately vetoed by Mayor Brandon Johnson.

The Living Wage for All Act purports to help workers by eliminating the tip credit. But real-world experience shows that the idea is undercooked. Higher mandated wages can look good on a pay stub while still leaving workers worse off if they lose tips, lose hours, or receive service-charge wages instead of qualified voluntary gratuities.

Policymakers should not weaken a compensation model that can deliver more after-tax dollars to workers. And restaurants that face higher wage mandates should not answer with mandatory fees that irritate customers and tax employees more heavily. The goal should be simple: Maximize the share of each guest dollar that reaches workers as after-tax take-home pay.

The best way to do that is to preserve the tip credit system and send the Living Wage for All Act back to the kitchen."

Youth unemployment in Canada near record highs since 2022; unprecedented levels outside of a recession

By Philip Cross of The Fraser Institute. 

The Extraordinary Increase of Youth Unemployment in Canada

• The surge in unemployment for Canada’s young people (ages 15–24) since 2022 has been extraordinary. The upturn reverses a decades-long gradual downward trend.
• Both the speed of the increase and the level of youth unemployment reached are unprecedented for an economy not in recession.
• Youths who were unemployed remained jobless for the longest period ever on record (data starts in 1976).
• The gap between the unemployment rates for youths (13.8 percent) and adults (5.7 percent) in 2025 reached a near all-time high (8.1 percentage points).
• The spread (3.8 percentage points) between the Canadian youth unemployment rate (13.8 percent) and the US rate (10.0 percent) in 2025 approached its all-time high.
• Canada’s youth unemployment rate has been higher than the US rate since 2015, indicating a sustained period of higher unemployment for Canada’s youth compared to our southern neighbour.
• Finally, the unemployment rate for 15–19-year-olds (19.5 percent) was at a near-record high, outside of the COVID-19 pandemic (2020), and the gap (8.6 percentage points) with 20–24-year-olds (10.9 percent) was also at a near all-time high.
• Several government policies contributed to the historic increase in Canada’s youth unemployment.
• Specifically, the increase in immigrant labour (increased supply) and simultaneous increases in minimum wages in most provinces (decreasing demand) are key explanations for the marked rise in youth unemployment.
• It is noteworthy that the weakness in youth employment has been concentrated in the retail trade and accommodation and food services sectors, where 70 percent of youth jobs are situated.

 

A minimum wage increase caused prices to rise at fast food restaurants

See The Effects of California's $20 Fast Food Minimum Wage on Prices by Jeffrey Clemens, Olivia Edwards, Jonathan Meer & Joshua D. Nguyen.

"We analyze the effect of California's $20 fast food minimum wage (Assembly Bill 1228), enacted in September 2023 and implemented in April 2024, on consumer prices using the Bureau of Labor Statistics' Consumer Price Indices for food away from home across 21 metropolitan statistical areas. Food away from home prices in California's four in-sample MSAs increased by 3.3 to 3.6 percent relative to 17 control MSAs through December 2024. Our estimates are stable across a number of specifications. Placebo tests on price indices for goods and services that were not affected by the policy, including food at home, show no differential increases in California's MSAs. The price increases we estimate likely arise in part from spillovers to the full-service sector, as well as changes in the production functions and product quality choices of limited service restaurants."

Chicago’s Minimum-Wage Retreat

The City Council votes to repeal a law championed by Mayor Brandon Johnson

By Michael Saltsman. Excerpts:

"Servers and bartenders already earn more than minimum wage, especially in Chicago, where a typical restaurant worker reportedly earns nearly $30 an hour between the lower base wage and tips."

"The tipped minimum wage was created nearly a century after the abolition of slavery."

"Between 2015 and 2023, the tipped minimum wage rose by nearly 75%, from $5.45 to $9.48." 

"Once-robust restaurant employment growth in the Chicago metro area, which rose as high as 5.6% in 2015, turned negative in the last years of the decade."

"In the first year after the mayor’s minimum wage hike, new restaurant and tavern licenses—a key indicator of industry health—dropped by more than 8%."

"nearly 500 restaurants closed in the first half of 2025, and 70% of the restaurants that responded to the association’s poll reported cutting staff or reducing employee hours"

"Alderwoman Samantha Nugent, . . . said her constituents were suffering from the mayor’s good intentions" 

Minimum Wages and Racial Disparities

Job losses and earnings reductions from minimum wage increases between 2005 and 2019 were much more prevalent for black workers, especially black men, and were minimal for white workers.

By David Neumark and Jyotsana Kala. Excerpt:

"Our research uses data from the American Community Survey between 2005 and 2019 to examine the effects of minimum wage increases on black workers and their relative impact compared with that of white workers. We studied not only teenagers—the focus of much existing research—but also other lower-skilled groups, including workers under the age of 30 and those without a high school degree.

Our findings indicate that job losses from minimum wage increases were much more prevalent for black workers, especially black men, and were minimal for white workers. For example, among black male workers under the age of 30 without a high school degree, a 10 percent increase in the minimum wage reduced employment by 4.1 percent on average. In contrast, our research finds no evidence of reduced employment for white workers with the same characteristics, even though the wages of both black and white workers increased by a similar degree.

Considering the wage and employment effects together, we found that higher minimum wages have decreased earnings for lower-skilled black workers. For example, within the same group of black male workers, a 10 percent increase in the minimum wage led to a 4.8 percent average reduction in earnings. In contrast, we found no evidence of reduced earnings for white workers with the same characteristics. In fact, for several of the lower-skilled groups we studied, minimum wage increases tended to increase earnings for white workers.

Because there is substantial residential segregation by race in the United States, the concentration of the minimum wages’ adverse effects on black workers implies that their adverse effects are also concentrated in heavily black neighborhoods. Indeed, our research finds that the adverse effects of minimum wage increases fell disproportionately on people of all races living in areas with a high black population share, worsening the adverse effects of minimum wages on black workers living in these areas relative to workers living elsewhere. In some cases, the accumulation of adverse effects for black workers and black neighborhoods implies that large differences in minimum wages could account for roughly 40 percent of the gap in employment rates for lower-skilled workers between areas with high and low black population shares."

What’s Across the Border? Re-Evaluating the Cross-Border Evidence on Minimum Wage Effects

By Priyaranjan Jha, David Neumark & Antonio Rodriguez-Lopez. 

"Dube, Lester, and Reich (2010) argue that state-level minimum wage variation correlated with economic shocks generates spurious evidence that higher minimum wages reduce employment. Using minimum wage variation within contiguous county pairs sharing a state border, they find no relationship between minimum wages and employment in the U.S. restaurant industry. Using the same research design, we show that this result is overturned if we use instead multi-state commuting zones, which provide superior definitions of local economic areas. These contrasting results are explained by a positive bias in the county-pair specification when using pairs formed by counties from different commuting zones." 

The Minimum Wage Makes the Affordability Crisis Worse

Higher labor costs push prices up, while fewer jobs and hours mean less money in workers’ pockets

By Jason L. Riley. Excerpts:

"In a forthcoming academic paper, Mr. Strain and Jeffrey Clemens analyze changes to the minimum wage in the decade preceding the Covid pandemic. They conclude that large increases harmed employment prospects for people with limited skills and work history—the same group who have experienced the most erosion in purchasing power since the pandemic. The authors estimate that “relatively large increases in minimum wages reduced employment rates among individuals with low levels of experience and education by just over 2 and a half percentage points.”

Between 2011 and 2019, California, New York state and the District of Columbia lifted their wage floors by 50%, 53% and 61%, respectively. New York City’s minimum wage more than doubled between 2013 and 2020 and will rise to $17 an hour next year, 13% higher than in 2023. The biggest jump in 2026 will occur in Hawaii, where the minimum will rise by $2 to $16 an hour, a 14% increase."

"the lowest-paid workers tend to spend a larger share of their income on food, housing, medical care and other necessities, which makes them far more sensitive to price increases. Minimum-wage mandates can make their situation even more precarious. The minimum wage for fast-food workers rose to $20 an hour in California in 2024. The Journal reported that in anticipation of the increase, restaurants halted hiring and scaled back hours. Teenage unemployment in the Golden State was already about twice the national average." 

Why the Affordability Crisis Is Most Severe in California

The state’s policies make it inevitable that prices will rise, especially for housing and energy

By Allysia Finley. Excerpts:

"the four metro areas where prices on average have increased by more than 3% [are] Philadelphia (3.3%), Los Angeles (3.6%), San Diego (4%) and Riverside, Calif. (4.5%)."

"Among the reasons for higher CPI readings in California’s metro areas are fast-rising housing costs."

"Yet the housing supply in Riverside . . . hasn’t kept up with demand." 

"Blame . . . environmental laws and strict zoning"

"Shelter prices have risen by 4.4% in Riverside and 5.6% in San Diego over the preceding 12 months, versus 0.1% in Dallas and 1.1% in Houston. In Phoenix, shelter prices have declined by 0.1%."

"Only 118,000 building permits for new homes were issued for the Los Angeles metro region (population 12.8 million) between 2021 and 2024, versus 163,000 in Atlanta (6.3 million), 187,000 in Phoenix (5.1 million), 276,000 in Houston (7.5 million) and 281,000 in Dallas (8.1 million)."

"The state’s melange of climate policies have driven up energy prices in San Diego (8.7% year over year), Riverside (7.9%) and Los Angeles (7%), even as they have been falling in places like Atlanta (by 2.3%), Phoenix (0.8%), Detroit (3%) and Houston (3.4%) that haven’t sought to banish fossil fuels."

"The Perryman Group estimates its local “tort tax” at $3,658 a person."

"Mandatory insurance costs make up about 45% of the average Uber fare in Los Angeles County, versus 10% or less in most places in the country."

"The cost of eating out has climbed by 14.4% in San Diego and 12.4% in Riverside since September 2023, when Democrats increased the state minimum wage for fast-food employees to $20 an hour. Restaurant prices nationwide have increased only 8.3%." 

The Truth About Those ‘High Minimum Wage’ Countries

Headline wages in Finland and Australia exempt millions of workers, and the loopholes tell us a lot about labor market realities

By David Hebert of AIER.

"When debating raising minimum wages, proponents will often point to Australia and Finland as examples that contradict the warnings from (typically American) economists. On the surface, this seems like a fair point. After all, from our American perspective, things in Australia seem fine (other than the fact that even the trees are trying to kill you) and Finland has been romanticized as a triumph of progressive politics “done right.”  But before minimum wage proponents declare victory, we should read the fine print.

Looking beyond the simple story of “higher minimum wages” and into the underlying structures of these countries’ respective economies reveals a web of exemptions, alternative employment structures, and differing educational emphases. Mandated high minimum wages with built-in escape hatches and exemptions large enough to drive a truck through are not really “minimums.”

The Land of Oz

Australia loves to mention that they have one of the world’s highest minimum wages, at $24.95 per hour (the equivalent of about $16.16 in USD). This headline-grabbing figure only tells part of the story, however, as there are exemptions to this depending on an employee’s age, industry, and myriad other conditions.  Helpfully, the Australian government has put together a Pay and Conditions Tool to help figure this all out.  As a rough approximation, a person who is 17 years old can roughly count on a minimum wage equal to about 60 percent of the “adult” pay rate, giving them an effective minimum wage of $14.42 ($9.34 USD) and $17.04 on their 18th birthday ($11.04 USD).  

But what about workers with a disability?  The Department of Social Services will determine how much a disabled worker will be paid based on the nature of their disability. Under the Supported Wage System, “a special workplace arrangement can be made for employers to pay wages to a person with disability based on how productive they are in their job. Under [this system] an employee’s work capacity is assessed to find out their rate of pay… For example, someone with an assessed work capacity of 70 percent is entitled to 70 percent of the relevant pay rate in their award or registered agreement.” 

In other words, the Australian minimum wage that Americans have heard so much about only applies to people without disabilities who are at least 21 years old, and even then, only sometimes. But this still doesn’t scratch the surface of the employment situation in Australia. Most of the jobs where the minimum wage actually applies are in industries such as restaurant and retail, where the work is so highly standardized that there are no real, appreciable productivity gains year over year.  Are we really to believe that a 21-year-old waitress carries plates or restocks inventory 44 percent better than her 18-year-old counterpart? 

As a result of the age-based pay scale, Australian workers in these industries are laid off at a disproportionately higher rate as they approach their 21st birthday, though effects can be seen at every birthday up until the worker turns 21.

Employers defend this system with a simple story: young workers lack experience and are therefore less productive because they’re still learning. They need training, which costs money, and are consequently paid less to “pay for” the training they receive on the job.

It’s a nice story and one that comports with much of what Americans might experience, too. The truth is that many young workers in Australia have already completed pre-employment training, earning certificates and such, before they even start work. And in the sectors where the junior minimum wages are most common, the work is highly standardized, such that there isn’t much productivity gained between 18 and 21.

That said, there are legitimate programs where younger workers earn lower wages than their older counterparts.  Australia’s apprenticeship program is incredibly robust. A first-year electrician earns around 60 percent of the wages of a qualified tradesperson because they are genuinely learning and getting demonstrably better each year thanks to the supervision and training they receive from their more senior coworkers. Wages in these settings increase not because of age, but because competence grows, and by the time the worker has completed their training, they earn full rates and have a valuable qualification they can take with them elsewhere, not to mention an all-important line on their resume attesting to their productivity.

Finnish Wage Floors

Unlike America and Australia, Finland actually does not have a formal, statutory minimum wage.  Instead, they use collective bargaining agreements, which cover somewhere around 90 percent of workers. Like Australia, however, they also have exemptions for workers who are “training” or in “apprentice programs.” The difference is that in Finland, the training programs last for a specific amount of time irrespective of the employee’s birthday. They’re based on skill, not age.

Finland also boasts a remarkable vocational and education training program (VET) that “provides students with knowledge and skills necessary in further studies and promotes employment.”  According to their own figures, around half of the students who complete their basic education in Finland matriculate on to VET rather than “general upper secondary education.” In other words, at around the age of 16, roughly half of the students decide to go into vocational training rather than continue on to what Americans commonly refer to as “college.”

While Finnish students are enrolled in the VET, they can work for pay at the agreed-upon rates covered by the collective bargaining agreement through formal apprenticeship programs.  According to the European Centre for the Development of Vocational Training, about 26 percent of VET students are enrolled in such a program. The remaining 74 percent, however, are either in the classroom or are engaged in “training agreements,” some of which allow the student to be unpaid while being formally employed. Others are informal, handshake agreements “under the table” whereby the student is not an employee and thus receives no wages.

Thus, what Finland has is a high, collectively agreed-upon wage floor. But they do this by pushing most of the vocational training into the (unpaid) education system. The high wage floor exists, but workers don’t get to stand on it until they’ve completed their training, formal and sanctioned or otherwise.

Reforms in America

The next time someone tells you about Finland’s wonderful labor market or Australia’s high minimum wage (or any other country, for that matter), ask about the fine print. When you look at these issues more closely, the surface-level claims of minimum wage proponents simply do not hold water.

Still, as the US continues to wrestle with reforms to our education system, we can learn from these countries’ experiences. Finland in particular, with its curricular focus on career preparation instead of rote memorization of obscure knowledge (when was the last time any of you, dear readers, used your knowledge of trigonometry?), provides an important example where lessons for reform can be learned.  

We should carefully guard against the headline-grabbing claim that Australia and Finland have high minimum wages. We should especially reject the idea that this somehow proves that raising the minimum wage does not always lead to trade-offs."

More Evidence on the Minimum Wage

By Jeffrey Miron.

"States and cities never seem to tire of hiking their minimum wages, with predictable effects:

On April 1, 2024, California raised its minimum wage from $16 to $20 per hour for fast-food workers employed at chains with more than 60 locations nationwide. This was one of the largest one-time minimum wage increases in US history, and one of the few focused on a single industry in recent decades.

Our research finds that employment in California’s fast-food sector declined by 2.7 percent between September 2023 and September 2024 relative to fast-food employment elsewhere in the United States. … Our median estimate suggests that California lost about 18,000 jobs that could have been retained if Assembly Bill 1228 had not been passed.

If a society wishes to redistribute income, it should redistribute income (e.g., via a negative income tax). Interfering with market wages generates counter-productive results." 

Careers of Minimum Wage Workers

By Sari Pekkala Kerr, William R. Kerr & Louis J. Maiden. NBER working paper.

"We characterize the careers of minimum wage workers by merging SIPP panels covering 1992-2016 into the LEHD. A long-run analysis shows strong earnings growth for these workers in subsequent decades, becoming indistinguishable from peers earning modestly more initially. Most of this growth is due to the steep earnings trajectories of young workers. Older workers earning minimum wages show a modest dip in earnings at that moment compared to earlier and later periods. Increases in state minimum wages do not significantly alter the future careers of workers who are on the minimum wage when the increases occur."

The weight of research opinion against minimum wage hikes continues to shift

By Tyler Cowen.

"This piece is by DuckKi Cho and is titled “Downward Wage Rigidity and Corporate Investment”:

Firms reduce investment when facing downward wage rigidity, the inability or unwillingness to adjust wages downward. To document this behavior, I exploit staggered state-level changes in minimum wage laws as an exogenous variation in downward wage rigidity. Following a 1-standard-deviation increase in the minimum wage, firms reduce their investment rate (the ratio of capital expenditure to capital stock) by 3.08 percentage points. The negative impact is more acute for firms with a higher fraction of minimum wage workers, stronger employment protections, or higher labor intensity. The investment reductions cannot be explained by labor adjustment under capital-labor complementarities. Rather, I identify the aggravation of debt overhang and increased operating leverage crowding out debt financing as two mechanisms by which downward wage rigidity impedes investment. The findings highlight the unintended consequences of minimum wage policies on corporate investment.

From the Journal of Law and Economics.  I fear that for the next thirty years people still will be claiming that Card and Krueger showed that minimum wage hikes do not damage employment.  After numerous recent revisions, many of them catalogued here, that is no longer such a plausible belief."

Accounting for City Size, Minimum Wages Reduce Jobs Almost Everywhere

By Priyaranjan Jha, Jyotsana Kala, David Neumark and Antonio Rodriguez-Lopez. Excerpt:

"in larger cities, wages are higher and, as a result, minimum wages are binding for fewer workers. Furthermore, larger cities also have less competitive labor markets. Once we account for city size, there is much less evidence that a higher minimum wage can increase employment in less competitive labor markets. Conversely, research that ignores city size leads to considerable exaggeration of how higher minimum wages can boost employment in non-competitive labor markets.

Measuring labor market frictions

In theoretical models of non-competitive labor markets, the key feature reflecting market power over workers is how frequently workers get job offers from different firms. When there are more job offers, it is easier for workers to move between employers and hence firms have less market power over workers—that is, labor markets are more competitive. We therefore use data on job market fluidity—such as hiring and separation rates—to measure how competitive local labor markets are. A more fluid labor market, with higher rates of hiring and separations, is more competitive.

Our data come from the Quarterly Workforce Indicators (QWI) and Job-to-Job (J2J) datasets, and we use “city” as a short-hand for core-based statistical areas, which consist of one or more counties with an urban core, linked by strong commuting patterns. Our use of fluidity measures differs from past work, which relies on concentration metrics, such as the Herfindahl-Hirschman Index (HHI) or the number of employers per worker. These latter measures stem from the idea that when there are fewer firms competing to hire workers, workers have fewer job opportunities aside from their current employer, which gives employers monopsony power in that labor market. However, despite its use in prior work, concentration can be a poor proxy for monopsony power. In job search models, an increase in the rate at which workers get job offers—which reflects greater labor market competition—can lead to higher concentration as larger, more productive firms attract and retain a disproportionate share of workers, making HHI an invalid measure. Similarly, when there is some differentiation between jobs, firms can be small yet still possess significant power to set wages. Nonetheless, to connect with past work we also show results using concentration measures constructed from the National Establishment Time Series (NETS).

Following recent work that allows the employment effect of the minimum wage to depend on local labor market power, we estimate regression models that capture the overall effect of a higher minimum wage on employment, but also an “interaction” that measures how the effect of the minimum wage varies with measures of monopsony power in local labor markets. We study the United States restaurant industry from 2001 to 2019 using data on employment and earnings from the QWI and state-level minimum wages. The restaurant industry has been the focus of many studies of minimum wages in the U.S. because of the large share of low-wage workers in the industry.

City size, wages, and labor market competition

 

A key issue for the study of the effects of minimum wage on employment in the U.S. is that researchers may not be able to reliably answer how minimum wage effects vary with local labor market power if other important differences across cities influence the impact of the minimum wage. In particular, wages are higher in larger cities—a phenomenon attributed both to the movement of higher-skilled people into larger cities and higher productivity of workers and firms in more dense areas. It turns out that minimum wages vary less across cities than wage levels, implying that minimum wages will have less “bite” in large cities (they are binding for fewer workers). Previous research on variation in minimum wage effects with local labor market competition has failed to account for this.  

The higher wages in large cities imply that minimum wages, which generally vary at the state level, are less binding in large cities. As shown in Figure 1, there is a strong positive relationship between city size and hourly earnings. In addition, the gap between hourly earnings and the minimum wage is wider, and hence the bite of the minimum wage is lower, in large cities.

 

We first ignore city size—like the recent research does. When we do this, the evidence suggests that minimum wages reduce employment in more competitive labor markets, but the analysis suggests that there are many markets where labor market power is sufficiently high that minimum wages have no effect on jobs or even increase jobs. We then show, however, that the empirical importance of this variation, and its implications for the employment effects of minimum wages, is overstated in research that ignores city size. 

The key fact is that labor market fluidity as measured by our hiring/separation measures is lower in larger cities. (Across the fluidity measures we use, the correlation with log working-age population is always negative and averages −.21.) Because minimum wages are less binding in larger cities (Figure 1), past research may have mistakenly concluded that minimum wage effects in larger cities are weaker or even positive because of labor market power, when in fact all that is going on is that the minimum wage is less binding in these cities. In the latter case, of course, even in the competitive model a higher minimum wage would not reduce employment.

When we estimate models that account for how both labor market power and city size influence the impact of minimum wages, the role of variation in labor market competition is substantially reduced. Even more important, from a policy perspective, is that adverse effect of the minimum wage on employment becomes much more consistent—and consistently negative—across cities. That is, even though we find evidence of some non-competitive labor market behavior after accounting for city size, the new estimates imply that minimum wage effects on employment are generally negative. This is illustrated in Figure 2.

 

Figure 2 illustrates this. The leftmost estimate (for “0” on the horizontal axis), shows the baseline estimated minimum wage elasticity without monopsony power interactions. The vertical figures (“boxplots”) plotted after that point show the estimated median minimum wage effect across cities (the black symbol) and then distributions of estimates, with the thicker line displaying the 25^th to 75^th percentiles of the estimates, and then thinner lines showing the fuller range of estimates (without outliers). (The symbols on the horizontal axis represent different labor market competition measures and are defined in Table 1 of the paper.)

The left-hand side of the figure is for estimates ignoring city size, while the right-hand side accounts for it. The figure indicates a clear bias against finding job loss from higher minimum wages when ignoring city size (the left-hand side of the figure), as the median estimates are closer to zero, and the ranges of estimates include more positive values. In contrast, the boxplots that account for city size, on the right-hand side of the figure—are shifted down, indicating that even after accounting for monopsony power, minimum wage effects are negative in most places.

Thus, the key result is that estimates that do not account for city size suggest that minimum wage effects are near-zero or positive in many places, which would imply that the effects of minimum wages vary substantively with labor market power. In contrast, once we account for city size—and avoid confounding its effects with those of monopsony power—although minimum wage effects vary, they are negative almost everywhere.

Conclusions

Our research does not say that labor markets are perfectly competitive. Indeed, our evidence that the minimum wage has more adverse employment effects where job market fluidity is higher points to labor markets for low-skilled workers exhibiting deviations from the competitive model. However, minimum wage proponents have over-emphasized the small minority of studies of minimum wages that fail to find job loss, and have latched onto evidence suggesting that there are many local labor markets where deviations from perfect competition imply that a higher minimum wage won’t reduce jobs and may even increase them.

A foundational essay on economics by Milton Friedman argues that the “test” of a model is not whether it is a completely accurate characterization of reality, but rather whether it makes accurate predictions. Our research shows that the evidence does not support jettisoning one of the fundamental predictions of the competitive model of labor markets: that higher minimum wages reduce employment of less-skilled workers."

The Wages of Teen Unemployment

Teen jobless rates are higher in states with higher minimum wages

WSJ editorial. Excerpts: 

"unemployment among 16 to 19 years old has shot up to 15.2% in July from 11.8% in January."

"Democrats [in California\ enacted a $20 an hour minimum in 2023 for fast-food restaurant chains."  

"Census Bureau non-seasonally adjusted data showed California’s teen jobless rate was a whopping 31% in July, double what it was two years ago before the fast-food minimum took effect."

"Kentucky [is] following the federal $7.25 an hour minimum. But its share of teens who are employed (38%) is higher than in most states because more participate in the labor force."

 

Talk to the Screen for Your Fries, Not the Hand

Restaurant owners in California are dealing with higher labor and production costs, as well as cash-strapped customers

Letter to The WSJ. 

"Walk into any fast-food restaurant today and you’re as likely to place your order with a touchscreen as with a human. California’s nobly christened “Fast Food Franchisor Responsibility Act” certainly seemed to reduce job opportunities, but these and other laws that establish price floors in the labor market naturally motivate businesses to seek technological alternatives.

Economists Tyler Cowen and Alex Tabarrok suggest that minimum wage laws should be named “The Robot Employment Act.” Others suggest the more sardonic designation “The Robot Subsidy Act.”

Prof. Blaine McCormick

Baylor University" 

Did California's Fast Food Minimum Wage Reduce Employment?

Jeffrey Clemens, Olivia Edwards & Jonathan Meer.

"We analyze the effect of California's $20 fast food minimum wage, which was enacted in September 2023 and went into effect in April 2024, on employment in the fast food sector. In unadjusted data from the Quarterly Census of Employment and Wages, we find that employment in California's fast food sector declined by 2.7 percent relative to employment in the fast food sector elsewhere in the United States from September 2023 through September 2024. Adjusting for pre-AB 1228 trends increases this differential decline to 3.2 percent, while netting out the equivalent employment changes in non-minimum-wage-intensive industries further increases the decline. Our median estimate translates into a loss of 18,000 jobs in California's fast food sector relative to the counterfactual."  

 

How Minimum Wages Punish Cash Businesses

Price floors on labor have unexpected costs, including convenience and customer service.

By Anthony Gill. Anthony Gill is a professor of political economy at the University of Washington.

"Do increases in the minimum wage only manifest themselves in reduced employment? Or are there other not-so-visible, but also not-so-trivial, effects that should be part of the policy discussion? As I will argue with a short anecdote, the consequences of government interfering with private labor contracts can arise in some surprising places.

A Caffeinated Conundrum 

There is a small coffee bodega in one of the university buildings where I frequently teach classes. I regularly stopped and purchased a 16-ounce drip to fuel me through afternoon seminars.  

One day something mysterious happened. When I pulled out a few dollar bills to pay for my beverage, the barista quickly said, “I’m sorry but we no longer take cash.” 

“Why?” I asked. 

“We want to serve all of our customers better, so we only take credit and debit cards,” the attendant cheerily replied. 

I quickly fired back. “But I am a customer, and I never use a credit or debit card for anything below twenty dollars! This is not serving me better!” (As this was nine years ago, I will let readers ponder whether I still prefer cash.) 

The poor employee, visibly flummoxed by my answer, reiterated that he was not allowed to accept cash. In fact, he informed me, to my dismay, that all campus food service locations now refuse cash. (I will further let readers speculate as to whether I paid for the already-poured beverage with a card or left the drink at the counter and left.) 

Herein lies a mystery. Why would our university’s food service outlets stop accepting cash? By making it hard for someone like me to pay, wouldn’t they risk losing business? I asked this of my seminar students that day, and several reasonable answers were given.  

The first answer was that “nobody uses cash anymore so Professor Gill must be a weirdo and who would want a weirdo as a customer.” While it is true that fewer and fewer people pay with, let alone carry, cash these days (particularly college age students), I do know of enough old faculty like me that prefer greenbacks as the primary means of exchange. The bodega certainly lost my business going forward and probably a few other gray-haired faculty. While we are an old-fashioned minority, cutting off an opportunity for exchange seems like a poor business decision. 

The second answer advanced was that going cashless makes sense if you want to prevent crime. Cash is easy to steal and is fungible; credit card receipts are not. Eliminate cash, and you eliminate a major incentive for robberies. This is not such a bad hypothesis, considering it has been the rationale for several Seattle-area businesses as crime has risen dramatically in recent years. Nevertheless, our campus in 2016 was not a hotbed of theft and most of the food service outlets make awkward robbery targets based on where they are located.  Admittedly, we were starting to see an increase in homelessness on campus, so going cashless may have been a means of trying to discourage vagrants from using our cafeterias. 

It’s the Minimum Wage, Stupid

Not satisfied with any of my students’ answers, I started my own investigation into the situation by talking with different cashiers and managers around campus. Most were not actually given any rationale for the change by their bosses; they were told not to accept cash and that is what they did. Nonetheless, one intriguing answer did emerge after a few conversations – it was a way to cut labor costs. 

In 2014, the City Council of Seattle passed an ordinance that incrementally increased the minimum wage from $9.47 to $15 per hour over a two year period starting in April 2015. Do the math; that is a 58 percent increase in the base wage in just twenty-four short months. My university, being the progressive employer it is, typically offers a wage higher than the legislated minimum to benefit work-study students struggling to pay off ever-increasing tuition — a virtuous cycle if there ever was one!

But why should an increase in the minimum wage affect whether or not coffee shops accept cash?  

Here’s the rub. If retailers accept dollar bills and coins, employees must reconcile (or “cash out”) their till at the end of shift, making sure that the money they have on hand matches the receipts sold for the day. This is done for bookkeeping purposes and to monitor whether cashiers are pilfering. 

But “cashing out” requires time. Not a major amount of time, mind you, but enough so that an employee might spend an additional fifteen minutes on this task. Even if the task only takes a few minutes, the employer is usually required to pay a quarter hour’s wage. At the new minimum wage of $15/hour, that equals an additional $3.75. Calculated as a change from the early $9.47 minimum wage, that is roughly an additional $1.50 per hour that must be paid merely to have an employee count cash. 

While such an increase in wage cost seems trivial, remember that the employer was also paying an additional $4 per hour throughout the employee’s entire shift (plus the increase amount paid into FICA at a higher base wage). Moreover, we’re not just talking about one employee. For a campus-wide operation with dozens of outlets, you are paying this added expense across a large number of employees working a large number of shifts across multiple days, weeks, and months. Those costs add up quickly and are often reflected in higher prices that potentially chase away customers.

(The problem is exacerbated for college food service because students have shorter shifts under work-study requirements. Instead of paying one employee fifteen more minutes to cash out after an eight-hour shift, you end up paying two employees an additional 15 minutes each to cash out after their four-hour shifts, 30 minutes. Student workers on short shifts are more expensive than non-students working a full eight hours. It isn’t surprising that my university led the way among local eateries and coffee shops in going cashless.) 

If you want to shave labor costs to minimize upward pressure on product prices, simply eliminate the $3.75/hour (or more) you pay employees to reconcile their till. In other words, if you eliminate cash, you eliminate the expense associated with cashing out. When all payments are conducted electronically, employees need only click a single button at the end of the shift and all receipts are tallied automatically. Voila — immediate cost savings! 

And so, the mystery was solved. It was a rapid increase in the minimum wage that took away my ability to buy coffee with cash. Customer inconvenience is an economic cost, and it is a cost that is often ignored by econometric studies considering only employment effects of minimum wage legislation.  

But Wait…There’s More (of Less Service)! 

Undoubtedly, some of you may be rolling your eyes at my analysis. “Prof. Gill, is the minor inconvenience of using a credit card such a major burden relative to the economic gains and social justice that results from paying workers better?” To that, I answer emphatically, “YES!”  It matters to me, and I have decreased my on-campus purchase of coffee dramatically since then, preferring to carry a thermos from home now. Customer inconvenience is a real cost, and there is more to it than just having to reach for my MasterCard. 

In 2017, a task force of University of Washington (UW) researchers published a report (with updates) evaluating the costs and benefits of Seattle’s rather dramatic minimum wage policy. Interestingly, the team went beyond looking merely at employment effects but also conducted in-depth interviews with several restaurateurs in the city about the adjustments they were making to the policy. Increasing menu prices was one of the primary methods of dealing with the increased labor costs, but restaurateurs and other service-oriented businesses were reluctant to do that given the fear of losing customers in a highly competitive market. 

One of the surprising things the UW research team found was that several lower-mid-tier restaurants were eliminating direct table service. Instead of wait staff taking orders at the table, bringing the food, and bussing the tables, customers would order at a counter, pick up their own food, and be encouraged to deposit their dishes at a separate bussing station. In essence, some table service restaurants began to look more like McDonald’s.  

Again, this may seem trivial in the grand scheme of things, but losing the experience of table service and the interaction of an attentive server does diminish the overall dining experience. Granted, this did not happen at four-star, white tablecloth establishments that have clientele who can absorb higher menu prices. The restaurants affected tended to serve lower-income individuals who suddenly were presented with a lower quality of service. Considering that proponents of higher minimum wages are usually advocates for the poor, it is odd to forget that the poor are not just workers, but customers as well. And why shouldn’t lower income individuals enjoy the benefits of table service at restaurants?  

Another key finding of the UW report was that restaurants responded to the increased wage by reducing staff hours. This is noteworthy as previous studies typically focused attention on whether increased minimum wage rates would create greater unemployment, including the famous Card and Krueger “natural experiment” study that showed little effect on layoffs. But such studies viewed labor as a binary variable – you were either working or not. 

In reality, labor is a continuous variable; employees can work 40 hours per week or just 30 hours. In Seattle, employers reacted to higher labor costs by reducing hours of their staff rather than laying them off. Finding and training new employees is expensive. Rather than laying off current workers, it made sense to cut their hours and hope there wouldn’t be any corresponding loss in productivity. Notably, the UW study found that while the average hourly pay for service employees did increase due to minimum wage increases, the reduced hours worked meant that there was little gain (and even a small loss) in overall monthly pay. 

But again, it is not just the labor effects that we must pay attention to when evaluating the effects of minimum wage increases. With employers cutting back on hours, customer service takes a hit.  

Consider food service once again. While there is some degree of predictability with restaurant and bodega traffic, surprises always occur. A “typical” slow Wednesday might be hit with an unexpected rush of traffic. As restaurants are evaluated not only on food quality but service as well, not having enough staff on hand to handle that rush will likely result in slower service. For that reason, restaurants favor having additional wait staff and kitchen help on hand just in case. With labor costs rising, though, such a strategy becomes untenable in a sector with slim margins. The other option being pursued by several fast food outlets is to simply replace human workers with automated kiosks. While this may work for a quick meal at Burger King, the prospect of this alternative at casual sit-down dining establishments seems horrid. 

Owners may also shorten the hours of business, leaving early bird or late-night customers with fewer options (just like my cashless coffee bodega). All of this is likely to create disgruntled customers who spread their bad experiences online or via word of mouth. While anecdotal, many of my acquaintances and I have noted that the quality of restaurant service in Seattle has declined significantly over the past decade and many of us have scaled back our dining habits. And we’re not alone. Fewer people have been eating out and restaurants have been closing in surprisingly high numbers. The impact of a minimum wage increase need not be immediately felt; through the slow decline in service and convenience, an entire sector withering away.

The Bottom Line Isn’t Always about the Money 

Policy debates regarding the minimum wage typically focus on labor and whether providing a “living wage” improves the lot of workers or leads to increased unemployment. But that is only one side of the coin. Consumers are also affected by minimum wage policy, be it in terms of higher prices or, as we have seen, declining service and options. These interests must be considered when formulating policy. Government mandates often have unintended consequences, and not in ways that are easily measured.  

We all benefit from a vibrant service sector; making it difficult for business to offer quality service and plentiful options for a diverse customer base will only harm the economy writ large."

Will D.C. Repeal the Law That Has Cut Tipped Workers' Earnings by $1,800 a Year? The law that was supposed to boost their wealth has left most of them poorer instead

By Jack Nicastro of Reason.

"The Washington, D.C., city council convened on Wednesday to discuss the FY 2026 budget. One of the topics on the council's agenda was reviewing proposals to repeal Initiative 82, the District of Columbia Tip Credit Elimination Act of 2022, which has hurt the district's restaurant industry and workers since its enactment. 

Initiative 82 passed with 132,925 votes in favor—nearly three-quarters of the electorate—in November 2022. Before the passage of the initiative, all workers in the district, including tipped workers, were entitled to a minimum wage of $15.20 per hour. Employers of tipped workers, however, were allowed to credit their employees' tips toward satisfying this requirement, and were required to provide their workers with a significantly lower mandatory base pay of $5.05 per hour. The initiative proposed to increase the mandatory base pay to tipped workers until it equaled the district's minimum wage, permanently phasing out the tip credit.

On May 1, 2023, the Tip Credit Elimination Act increased mandatory base pay to $6 per hour. That figure increased to $8 per hour in July 2023 and to $10 per hour in July 2024. The act prescribed a July 2025 increase to $12 per hour, but on June 3, the city council voted to pause this increase until October. Councilmember Kenyan R. McDuffie (I–At large) said he introduced the pause out of concern for how the act has impacted the restaurant industry, reports NBC 4 Washington. Councilmember Robert C. White Jr. (D–At Large) voted in support of the pause after speaking to 150 restaurant workers who told him that "[their] take-home pay has decreased," according to The Washington Post. 

Jennifer Budoff, Washington's budget director, dismissed such concerns in a recent report, claiming that the city's restaurant industry "remains healthy" following the enactment of Initiative 82.  Mayor Muriel Bowser, a Democrat, disagrees. Bowser's FY 2026 budget proposal, released to the public on May 27, calls on the city council to "repeal Initiative 82 & establish sales tax holidays for restaurants" as part of her call to cut red tape and reduce barriers to growth. Employment and earnings data support Bowser's concerns. 

Rebekah Paxton, director of research at the Employment Policies Institute (EPI), tells Reason that the district has lost over 1,600 full-service restaurant and bar jobs, on net, between May 2023 (when the act took effect) and December 2024, the latest month for which the Bureau of Labor Statistics Quarterly Census of Employment and Wages (QCEW) data are available. The QCEW data put this number in perspective: Restaurants employing tipped workers in the Virginia and Maryland counties surrounding Washington experienced an employment decline of 0.84 percent from May 2023 to December 2024, while the district witnessed a decline of 4.74 percent during the same period, according to Paxton's testimony to the city council on Wednesday. The decline of employment in the city's restaurants that do not employ tipped workers was nearly one percentage point lower than that of its full-service restaurants, Paxton testified.

Not only has full-service restaurant and bar employment decreased, but so have earnings. Total worker earnings decreased by nearly $12 million dollars from $345.6 million in May 2023 to $333.8 million in September 2024, according to EPI's analysis of QCEW data. Paxton says "the median tipped worker in DC is losing about $1800 a year" in the two years following implementation of the act compared to the two years preceding, according to her analysis of U.S. Census Bureau Current Population Survey (CPS) data."