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A waitress takes takes orders at a restaurant in Washington, D.C. Photo: Andrew Caballero-Reynolds/AFP/Getty Images

D.C. voters will decide a ballot measure on Tuesday that requires restaurant and bar owners to gradually increase the $3.33 “tipped wage” for workers until it matches the city’s $15 minimum wage of $12.50 per hour — a figure set to rise to $15 an hour by 2020.

The bigger picture: While the Fight for $15 campaign has forced dozens of states and cities across the U.S. to increase their minimum wage in recent years, activists have finally begun to turn their attention to tipped workers.

What’s happening: The measure, dubbed Initiative 77, pits the restaurant industry — as well as most of the city's political establishment — against progressive organizations in a city that has some of the most generous employee benefit policies in the country.

The backstory: Tipped workers were exempt from the hourly minimum wage hike in 2016, which raised the floor to $15 an hour by 2020 and include futures annual automatic increases to inflation. They are currently paid $3.33 an hour and collect tips to supplement their income. If the money from tips falls short of the $12.50 prevailing minimum wage, their employer must make up the difference. 

What they're saying: The activists behind the measure say workers, especially those at chain restaurants and others who are currently at greater risk of wage theft, would no longer have to reply on tips from customers to enforce a steady income. Attorney Daniel Katz at the Washington Lawyers' Committee for Civil Rights and Urban Affairs, told WAMU 88.5 that tipped workers often face intimidation and retaliation when they inform their employers that tips came up short.

  • Opponents, notably the restaurant industry, say the initiative could result slashing hours and pay. "Don’t be fooled! #Initiative77 hurts bar, restaurant & nightclub workers. If #Initiative77 passes, it would actually reduce the pay for servers & bartenders," the Restaurant Association of Metropolitan Washington, said in a tweet Sunday.
  • Yes, but: There's also an argument that there's no evidence to support that claim.

State of play: Seven states — Alaska, California, Minnesota, Montana, Nevada, Oregon and Washington — have so far eliminated the tipped wage system. In New York, the state’s Department of Labor will wrap-up its seventh hearing later this month after Gov. Andrew Cuomo’s order to consider eliminating the two-tiered wage system.

What's next: The D.C. Council — a majority of whose members are against the initiative — could pass a measure to overturn it or make changes if approved by voters.

Go deeper

"No-code" miracle for startups

Expand chart
Data: Interactive Advertising Bureau; Table: Axios Visuals

The U.S. has reached a tipping point in its shift from the industrial economy — one that relied on the buildout of hardware — to an information economy that relies on the transfer, storage and implementation of data, according to a new report.

Why it matters: This shift towards a data and information-based economy has allowed more businesses to establish themselves and scale quickly and at a very low cost. As such, the number of jobs created by the commercial internet has more than tripled since 2012.

Amazon's small business shield

Illustration: Aïda Amer/Axios

Amazon is touting the success of small sellers on its platform through the pandemic — and warning that antitrust legislation could jeopardize that success and blow up its open-marketplace model.

Why it matters: As online shopping became a lifeline for both businesses and consumers during the pandemic, Amazon reaped big benefits, but also saw its regulatory risk grow.

The new cold war panic

Illustration: Aïda Amer/Axios

The world has seen a power struggle between nuclear powers before, and has seen those countries inch closer to military conflict. But it's never before seen a cold war between two countries as interconnected — with each other and with the rest of the globe — as the U.S. and China.

Why it matters: Escalating antagonism between the world's two superpowers is likely to hinder global cooperation to fight climate change, divert resources to costly arms and tech races, complicate diplomacy for U.S. allies, and victimize Chinese and American citizens living in each other's countries.

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