Ed Lazere. Photo by Darrow Montgomery.

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At Monroe Street Market, the specter of the tipped minimum wage haunts Ed Lazere

On an overcast Saturday morning at the corner of 8th and Monroe streets Northeast, not far from his longtime home, Lazere is surrounded by supporters with only good things to say about him. “His heart is in the right place” is one common refrain. “He knows the budget like the back of his hand” is another.  

These fervent fans cite Lazere’s decades of fighting for racial and economic equality in D.C. and insist he’ll strengthen the Council’s progressive bloc. He’ll champion working families, wants to end homelessness, and improve the schools, and build more affordable housing. What more could a progressive voter want when they fill out their ballot?

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Lazere is one of the 24 candidates on the ballot seeking an at-large seat on the D.C. Council. But on this day, as the morning fades into the afternoon and the volunteers begin to scatter, one of his supporters, Ra Amin, wants to introduce Lazere to a natural antagonist.

At the outdoor market on Arts Walk Plaza, Thor Cheston, a co-founder of Right Proper Brewing Company, is minding his tent. Cheston opposed Initiative 77, a measure that would have eliminated D.C.’s two-tier wage system that allows restaurants and bars to pay servers and bartenders a lower base wage (currently $5 an hour). If employees don’t make enough in tips to equal the standard minimum wage (currently $15 an hour), employers must make up the difference. More than 55 percent of D.C. voters approved the measure in June 2018. But the D.C. Council overturned the initiative months after voters approved it. Lazere supported I-77 in 2018 and still believes D.C. should eliminate the tipped minimum wage.

Amin thinks Lazere and Cheston should talk. Maybe Cheston will agree to serve beer at a campaign event. Wages are a touchy issue for Cheston. His employees make good money—more than he does in a year, he claims—and the tipped minimum wage he’s able to pay them allows him to stay in business.

Lazere respects Cheston’s position, but, he tells the brewer, research shows that when the minimum wage increases “employers do find a way to adjust.”

“They just find efficiencies,” Lazere tells him. “They adopt more energy efficient light bulbs. Whatever, they just find a whole bunch of efficiencies. There’s creativity. Entrepreneurs are creative.”

Cheston calls eliminating the tipped wage a “death knell.” Lazere claims the fears of I-77 opponents—increased menu prices, lay offs, closures—aren’t borne out in other jurisdictions that eliminated the tipped wage. (A 2017 study from Harvard Business School shows that minimum wage hikes most impact less popular restaurants and those teetering on the edge of closure.)

In a follow-up phone call, Cheston tells LL that he appreciated Lazere’s willingness to talk, but the conversation did nothing to change his mind about eliminating the tipped wage.

“His answer is ‘well, small business owners are creative,’” Cheston says. “That doesn’t cut it. I know I’m creative. I don’t need someone to tell me I’m creative. … I felt that was a little patronizing, and I did not appreciate that.”

I-77 was a campaign issue two years ago, the last time Lazere ran for a seat on the Council and lost big to Chairman Phil Mendelson, who led the I-77 repeal effort. Last year, the House of Representatives passed a minimum wage bill that would phase out the tip credit, and the polarizing issue still remains a topic of debate locally. 

Christina Henderson, one of Lazere’s current opponents, who recently secured the Washington Post’s endorsement, believes the tipped minimum wage should be eliminated. At-Large Councilmember Robert White, the Democratic nominee seeking a second term, does not. Vincent Orange, another at-large candidate and a former councilmember who lost to White in 2016, rejects the idea of a two-tier wage system entirely. He says all D.C. employees are legally owed $15 per hour directly from their employer regardless of where they work.

Lazere argues the tipped-wage for restaurant workers is inherently unfair and creates volatility in their wages. And while he acknowledges that reviving the fight for it in the middle of a global pandemic, when restaurants are already struggling to survive, is not realistic, he still believes eventually it’s the right thing to do.

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Lazere wants voters to know he’s super progressive. He has earned endorsements from several left-leaning groups including Jews United for Justice, DC for Democracy, Sunrise Movement DC, and the Working Families Party; from labor unions; and from current At-Large Councilmember Elissa Silverman, his former employee at the DC Fiscal Policy Institute, and Ward 1 Councilmember Brianne Nadeau.

For the past two decades, Lazere led the left-leaning DCFPI and in that role, pushed for policies he believed would address racial and economic inequality. He’s testified before the Council dozens of times, lobbied its members, and commissioned polls that support his policies.

His campaign contributions are another indicator of grassroots support. His campaign has more individual donors than any other at-large campaign and is on track to raise close to half a million dollars with the help of D.C.’s publicly funded campaign program. The program restricts candidates from taking money from corporations and limits maximum contributions to $100.

If elected, Lazere would join Janeese Lewis George, the Democratic nominee for the Ward 4 seat as the other democratic socialist on the Council. George faces only nominal competition in the general election. 

Lazere points to a recent budget vote to show the impact he and George would have on the Council. In July, the Council rejected Ward 6 Councilmember Charles Allen’s amendment to the budget that would have raised income taxes on people making more than $250,000 by a vote of 5 to 8. Ward 4 Councilmember Brandon Todd and At-Large Councilmember David Grosso, whose seat Lazere would fill if he wins, voted with the majority.

Mendelson, one of the leading voices to speak against the tax increase, is especially concerned about Lazere’s campaign. The moderate Council chairman has lamented the body’s shift to what he calls the “far left.” In a recent phone call, Mendelson rattled off all the reasons he doesn’t like Lazere.

First, there are the financials. “I think of two things: tax and spend,” Mendelson says, suggesting that Lazere’s solutions to D.C.’s problems are raising taxes and spending more money. For decades, Lazere has pushed the Council to spend more of its reserve funds, which have helped keep the city afloat during the pandemic.

“We would not be able to get by as well as we have in this economic downturn if we had not built up our reserves and spent more carefully, which, every budget year, Ed Lazere has opposed,” Mendelson says.

Even after the pandemic reached D.C., Lazere testified in May that the Council should consider spending $700 million of its $1.4 billion in reserves over the next two years.

Lazere contends that his advocacy has also focused on closing tax loopholes, such as the benefit for high-tech companies, but acknowledges that raising some taxes may still be necessary. During the campaign, he’s repeatedly pointed out that the income tax rate for people making between $60,000 and $350,000 is less than half of a percentage lower than the tax rate for those making more than $1 million.

“If your income is over a million dollars it feels like it’s not unreasonable to say that ‘we need your help to support the city’s economy and the struggling residents during the pandemic,’” he said in his May testimony.

Another complaint from the chairman: Lazere’s alleged hypocrisy. “He’s real big on preaching equity, but if you look at the practices with DCFPI, the hiring, who got to testify, it’s not there,” Mendelson says.

Lazere acknowledges that DCFPI’s staff historically has not been diverse. But several years ago, after conversations with other advocacy organizations and funders, Lazere made an effort to diversify. Before he left the organization, about 50 percent of DCFPI’s staff were people of color, he says.

“It is factually correct that the staff was not always a majority Black staff, but it is now because that is important to me and I worked to make it happen,” he says.

Jacquelyn Lendsey, DCFPI’s interim director says she inherited a diverse staff that includes a majority of people of color when she took over for Lazere in March.

And one more swipe from the chairman: Lazere supported an affordable housing project that cost the city more money than it should have, Mendelson claims, evidence of Lazere’s alleged shortsightedness.

In order to fund the affordable housing units in the Wren apartment building at 965 Florida Ave. NW, D.C. agreed to sell the land to the developer at below market rate. Lazere supported the deal, reasoning that the discounted land is the cost of producing affordable units.

Mendelson believes the discount was too steep. The land’s full market value at the time was $27 million (and between $5.9  and $7.5 million when factoring in the affordable units), but the District sold it to the developer for $1.4 million. Of the Wren’s 433 units, 132 are considered affordable for people making up to 50 percent of the area median income.

Lazere celebrated the deal with a blog post on DCFPI’s website, while Mendelson criticized it in his committee report. The millions the District gave away to a private developer could have gone toward homeless services, education, or into the Housing Production Trust Fund, Mendelson argues.

For the chairman, Lazere’s support for the deal indicates a willingness to promote “certain ideological goals without looking at the whole picture. In this case, the greater value to the city and affordable housing would be to require the developer to pay fair market value reflecting the affordability, which then could be additional money for additional affordable housing,” he says.

Lazere says Mendelson is the one who is being shortsighted. He points to a 2013 law, which he and other housing advocates pushed, that says when the District sells its land to a developer to build housing, the project must include affordable units.

Lazere concedes the city may not have gotten it completely right. “Maybe they were off by a million or two … but I still believe nearly if not all subsidies to developers are justified to provide affordable housing,” he says.

Mendelson, who has not endorsed any candidate or said who he’s voting for in the at-large race, echoes many of the same concerns that Lazere’s opponents describe to LL. The differences between the two highlight the tension between the more moderate elected officials currently on the Council and the progressives seeking to systemically change it.

Lazere, for his part, argues that the kind of change he’s pushing for requires greater investment.

“Yes, I do want to spend more because addressing our inequities does require us to spend more,” he says. “Then the question is having someone who actually knows how the budget works [and can] find the money to fund those things, and there isn’t anybody else running who knows the budget as well as I do.”

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Back at the Monroe Street Market, Cheston has another issue to raise with Lazere. He says he spent more than $100,000 developing unusable city-owned property in front of Right Proper’s Brookland location. He turned the space into an outdoor patio, but now the city is charging him rent.

“Well that’s B.S.,” Lazere says. “I’d love to work with you on that.”

The two part ways and agree to disagree about the tipped wage.

In a follow-up, Cheston says he intended to grill Lazere during the campaign event Right Proper would sponsor. He wanted to know if the progressive policy wonk had an understanding of the cost of running a small business in D.C. The event was canceled, and Cheston says he’s voting for Marcus Goodwin and Alexander Padro. Both candidates “seem to be very intune with small businesses and the importance that they have to the economy and the city,” Cheston says.

Still, he appreciates that Lazere recognized his frustration paying the city rent for his patio.

“He seemed to side with me on that,” he says. “And that was helpful.”