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Editors note: This story is part of continuing coverage of Initiative 77. City Paper found it newsworthy to report about the existence of the fact checking website as it relates to the ongoing battle over this ballot question. While we specified the host website’s political leanings and standpoint against minimum wage increases, it should also be noted that Employment Policies Institute is footed by Rick Berman, a known advocate for corporate interests.
“I want a bumper sticker for why ROC is B.S.,” says Michael Saltsman, the managing director of the Employment Policies Institute (EPI) and Forbes contributor. This morning the D.C.-based think tank launched a “ROC Fact Check” website that chews away at claims made by Restaurant Opportunities Center United (ROC).
ROC is the New York-based group with a D.C. office that successfully netted enough signatures to get Initiative 77 on the ballot on June 19. A “yes” vote on 77 is a vote to eliminate the city’s two-tiered wage system based off a tip credit.
A tip credit allows restaurant operators to keep their payroll costs down by paying tipped workers like servers, bartenders, and bussers a lower base wage of at least $3.33 an hour, thus asking customers to make up the difference with tips. When tips don’t carry a worker over the standard minimum wage (currently $12.50 an hour), the employer is obligated to make up the difference so that take-home pay is a minimum of $12.50, not $3.33.
If voters pass Initiative 77 on June 19, the tipped minimum wage would go up in eight increments until it reaches $15 in 2025, shifting greater payroll costs to restaurant operators, who in turn say they would have to raise prices significantly and cut staff. From 2026 going forward, there would be what ROC calls, “One Fair Wage” tied to inflation. ROC leaders add that tipping and a two-tier wage system disadvantages women and people of color and is a prime cause of sexual harassment in restaurants.
ROC has nonprofit status but is sometimes criticized for acting too much like a labor union. ROC receives funding from a bevy of foundations. According to tax documents, the Ford Foundation donated more than $5.5 million from 2008-2015. ROC-DC Director Diana Ramirez says there are 1,200 local members.
Saltsman has long been skeptical of ROC’s data. “If you go to the website for ROC they have tons of reports on there,” he explains. “For the casual observer, you’d say there’s a lot of data to back up their points.” Look closer, he says, and you’ll see ROC has a habit of citing its own reports.
“When you get into a conversation with people where you’re trying to say, ‘Look at the footnotes,’ you tend to lose people.” That’s why he and EPI decided to launch the fact check site. “Here’s why it’s wrong and here are sources for going deeper to check what I said.”
Like ROC, EPI cites some of its own reports on the ROC fact check site. Saltsman describes his think tank as focused on issues in the entry-level labor market, especially in the service industry. It tends to be skeptical of the benefits of higher minimum wages, believing there are unintended consequences in terms of job reduction opportunities especially for people who are younger, according to Saltsman. The institute’s landing page currently says that businesses are closing as a result of the fight for a $15 minimum wage.
“EPI has been identified as a right-of-center, business-supported think tank on these issues,” he says. “There’s no free lunch when you talk about adding new benefit mandates in an industry where profit margins are in the low single digits.”
The first “myth” the new website addresses is ROC’s frequent claim that sexual harassment is cut in half in states without a tip credit (all but seven states have one). California, Oregon, and Washington State are among those that don’t. ROC leaders and local members use this statistic often in the media and at events.
“ROC has shifted a little bit in its strategy,” Saltsman says. “They’ve taken advantage of the reckoning that’s been due for men in power in Hollywood and other societal changes.” Saltasman doesn’t deny that sexual harassment exists in restaurants, but he believes there isn’t a correlation between sexual harassment and the tip credit.
Another myth the site hopes to clear up is that “tips are better in states without a tip credit.” Saltsman points to ROC’s own data from its 2018 report “Restaurants Flourish with One Fair Wage.” Table four shows 9.8 percent of tipped workers are below the poverty line in D.C. compared to 12.1 percent in San Francisco where there isn’t a tip credit.
The site currently addresses six myths about ROC, but Saltsman says they will continue to add to it. “It’s intended as a resource for D.C., but also markets around the country right now like Michigan, Massachusetts, New York, and Rhode Island where the same set of ROC talking points crop up again and again,” Saltsman says. “This is a resource for anywhere ROC pops its head up so people know what ROC is peddling isn’t true.”
Saltman recognizes that he’s not an unbiased source. “Be skeptical about the fact that EPI receives support from businesses, but look at what ROC says and the sources we cite, not what I say,” he says. “What people should be listening to is the employees and the majority of democratic legislators that are against this … I hope what comes out of D.C., New York, and Michigan is a reckoning for ROC and the public writing checks to ROC. Tipped employees want nothing to do with what ROC is selling.”
For more on Initiative 77:
A previous version of this story identified the think tank as the Employment Policy Center instead of the Employment Policies Center.