As Chicago’s city council moved Thursday, September 14 to propose an ordinance abolishing the tipped minimum wage, in a last-ditch alternative, a new ordinance, backed by the Illinois Restaurant Association, was introduced that would make Chicago’s minimum wage the highest in the country — at least for restaurants that use the tip credit. Fast-food restaurants wouldn’t be impacted.
The proposal comes as One Fair Wage — the progressive organization that’s pushing Mayor Brandon Johnson’s effort in Chicago and in other cities — hoped hearings would be wrapped up quickly so a final vote could happen on October 4. Now, 26th Ward Ald. Jessie Fuentes tells WTTW that October 17 is the revised target for a vote. Fuentes and her allies appear to have enough votes to rid the city of the tipped minimum wage. The ordinance wouldn’t go into effect until 2025. The workforce development committee, which received the proposal to eliminate tipped credit in the state, will now schedule hearings to listen to testimony from those who support and oppose the measure. Meanwhile, the council moved the counter proposalto committee.
The Illinois Restaurant Association has been offering counters to the measure, as some of its members feel many restaurants will close without the tip credit and increased wages. The feeling is higher prices will also shun customers. One restaurant owner tells Eater that they believe those higher prices will particularly deter Black and Brown customers from dining at more expensive downtown restaurants, making dining rooms more homogeneous than ever. Some of those concerns were shared on Thursday during a meeting between association members and the council’s Black Caucus. Studies show that Black and Brown workers are disproportionately impacted by the tipped minimum wage system.
The fear of the unknown is natural, and despite having the votes to pass the ordinance, supporters — to a degree — empathize with some owners, and Fuentes has said her colleagues are willing to talk with Illinois Restaurant Association president Sam Toia.
Toia is still hoping to appease One Fair Wage with alternatives. The Illinois Restaurant Association’s data claims the median full-service tipped restaurant worker in the state makes $28 per hour. On Thursday, 44th Ward Ald. Bennett Lawson introduced an ordinance that would increase Chicago’s minimum wage to the highest in America at $20.54, which is 30 percent more than the $15.80 standard. Washington state has the highest minimum wage in the U.S. at $15.74.
Lawson’s ordinance would require any restaurant that uses the tip credit and clears $3 million in annual revenue to raise its hourly minimum wage to 30 percent more than Chicago’s standard minimum wage. No matter how the minimum wage would increase, Toia says tipped workers would be guaranteed 30 percent more.
“It’s very important that we take care of our workers,” Toia says, pointing out that the association supported raising the minimum wage to $15. “You go to the restaurants for the food, you go back for the hospitality. If you don’t have happy workers, you’re not going to succeed.”
The current minimum wage falls under the “living wage,” a metric calculated by MIT that determines what a person needs depending on the market. In Illinois, combining rural and urban areas, that number is $18.72 per hour for a one-person household. For a household with two children and two adults, the living wage jumps to $40.01 per hour.
The new ordinance would also increase fines for employers who ilegally withhold tips from employees. Fines would jump from $500 to $1,500 for first offenses and $1,500 or $3,000 for repeat offenses, with new fines administered daily.
Toia says it’s important to beef up enforcement of these violations the same way the city quickly addresses food inspections or noise complaints.