A growing number of states are eliminating the lower minimum wage paid to tipped employees, and the Nation’s Capital appears to be a warning that neither employees nor employers are benefiting from the change.

It’s been two years since D.C. began the process of raising, and eventually eliminating, the lower minimum wage employers are allowed to pay their employees who receive tips. Since then, things have gotten worse for both groups, due to the higher labor costs in an industry that’s historically had to survive on thin profit margins.

Passed in November of 2022, Initiative 82 has been periodically raising the hourly tipped tax minimum wage in D.C.. Initially $5.05, it increased to $10 an hour this year. It will continue to be raised by two dollars an hour until it matches the city’s minimum wage for other employees (currently, $17.50 an hour).

In the 12 months leading up to the initiative’s implementation, D.C.'s full-service restaurants added 3,900 jobs (a 15% increase). Since then, 1,800 of those jobs have been lost (a 6% decrease).

Results of a survey of its members by the Restaurant Association of Metropolitan Washington (RAMW) reported by Axios also reveal troubling news:

Currently, eight states and three major cities, including D.C. and Chicago, have voted to eliminate the tipped minimum wage, Axios reports. According to a count posted in 2023, the Department of Labor reported that only five states were without minimum wage laws:

“The following states do not have state minimum wage laws: Alabama, Louisiana, Mississippi, South Carolina, and Tennessee. Georgia has a state minimum wage law, but it does not apply to tipped employees. Employers in these states must pay employees covered by the Federal Fair Labor Standards Act at least the federal minimum wage.”

Coincidentally, both presidential candidates Democrat Kamala Harris and Republican Donald Trump say they want to eliminate taxes on tips, which would increase the take-home pay of all tipped workers and provide an additional increase to those in states that eliminate the tipped minimum wage.