Still undecided on Initiative 77? Here’s two more perspectives – Andy Shallal and Jackie Greenbaum. First Busboys’ Shallal:

“My thoughts on Initiative 77. I have stayed out of the public conversation over concerns that whatever is said can be taken out of context and misinterpreted by either side of this debate.

If this initiative passes, which I believe it will, it will not bring about the end of the world. The sky will not fall and dark clouds will not gather over DC, however, I do believe that the City Council needs to convene a roundtable immediately, post June 19 (no matter the outcome), bringing together labor and business to find common ground toward moving away from tips as the sole source of income for restaurant tipped workers.

Moreover, each side has to understand the impact this type of legislation would have, and all sides have to agree that a compromise would have to be struck. Initiative 77 would inevitably mean a rise in labor cost and consequently an increase in operating expenses and those additional costs need to be to offset. Most businesses would have to increase prices slightly, readjust staffing or use more creative ways to compensate for the change. In either case, if this initiative passes, customers will have to get used to paying more.

Additionally, such an initiative would bring about more fairness between the Back of the House and the Front of House wages by allowing tips to be distributed more equitably to all hourly employees. Right now, it is illegal for tips to be shared by cooks, dishwashers and other non-tipped employees. Passing Initiative 77 would eventually change that.

We need to revisit how tipping culture and practice came about and look for a more equitable way for workers to get compensated that goes beyond the whim of a diner or a patron. No one should have to depend on that alone. This practice is not acceptable in any other industry and we in the restaurant business should not be the last holdouts.”

And El Chucho, Bar Charley, Little Coco’s (et al) Jackie Greenbaum:

“I’d like to weigh in on this conversation. I’m a restaurant owner, a Ward 1 resident for the past 10 years, and a lifelong liberal Democrat. I realize this is a highly charged issue, and that my comments may be discounted because I am an owner. My restaurants are small, neighborhood establishments: El Chucho in Ward 1, Bar Charley in Ward 2, and Little Coco’s in Ward 4. Each have fairly modest budgets and are the types of restaurants which will be hardest hit by Initiative 77.

The elimination of the tipped wage puts those of us who created small, full service restaurants under the existing tipped wage system in an impossible situation. If DC had eliminated the tipped wage decades ago, like California did (in the 70’s), restaurants may have adapted by now. Instead, we are being asked to shoulder a wage increase that our budgets can’t possibly sustain and our restaurants’ economic structures were never designed for.

I dread the decisions I will have to make. The payroll increases alone (disregarding other cost increases which are tied to income and payroll) represent a 26% increase in our operating costs. This exceeds our profit margins by hundreds of thousands of dollars. My solutions to meet this huge gap are all bad (from changing to counter service to price increases to service charges). But every one includes large staff cuts. Many of my employees are putting themselves through school, are single mothers or have just gotten married and are starting a family. Others have just bought a home or just signed a lease in DC to be closer to work. I am sick over what I will have to do to make ends meet.

I hear folks rather flippantly say that simple price increases will cover this, and that restaurants increase prices all the time. I don’t see this, nor is this my experience. To put price increases in perspective, in the 6 years since we opened El Chucho, we have never raised prices–except for once when we temporarily raised margarita prices by 50 cents due to the lime shortage. (more…)