Lost wages and shuttered restaurants could happen under new ballot proposal

If Michigan forbids a lower minimum wage for restaurant servers and others who routinely receive tips, many people could lose their jobs, says a labor analyst who points to the recent experience of Washington, D.C.

The nation’s capital imposed a uniform minimum wage in May 2023, eliminating a sub-minimum wage for those who receive tips. Full-service restaurants and bars in Washington shed 1,600 jobs between then and June 4, 2025, Rebecca Paxton, director of research at the Employment Policies Institute, wrote to the Council of the District of Columbia on June 18. Lost wages came to $11.8 million, she added.

Tips are down in the city, Paxton told Michigan Capitol Confidential in a phone interview. Many workers, she said, showed up to the D.C. council earlier this year to testify that their wages have been cut in half because of the new law.

Michiganders would do well to consider this experience should they be asked whether to create a similar law in their state, Paxton said.

The Michigan Board of Canvassers on June 27 approved the summary language of a prospective ballot measure that would gradually increase the tipped minimum wage and make it equal to the minimum wage for most workers.

Proponents of the move, such as Voters to Stop Pay Cuts and One Fair Wage, can now gather the 223,009 signatures needed to add the measure to the November 2026 ballot. The latter group was behind efforts to do away with tipped wages in Washington, D.C.

The city lost a record-high 73 restaurants in 2024, Paxton told CapCon.

Roughly two out of every five restaurants in the city will close this year, according to a survey conducted by the Restaurant Association of Metropolitan Washington. The association cited the end of the tipped wage as one cause. It projected more restaurants will close if wages increase as called for in current law.

Michigan’s current law guarantees that waitstaff and others will earn at least the minimum wage, Eater.com wrote. “If a worker does not reach the standard minimum wage with tips during any given shift, employers are required to pay the difference or face fines of up to $2,500,” it wrote of Michigan’s law. “However, the tipped minimum wage also allows workers to potentially earn more than the standard hourly minimum if they receive substantial tips."

One Fair Wage did not respond to a request for comment.