Mayor Brandon Johnson on Friday scored the biggest legislative win yet for his progressive agenda as the City Council approved a measure that phases in the elimination of the subminimum wage for restaurant servers, bartenders and other tipped workers.
By a 36-10 vote, Council members served up the ordinance that supporters say will level the economic playing field for waitstaff in Chicago’s world-class culinary scene, but that industry leaders argue will saddle neighborhood restaurants with untenable labor costs.
Opponents at the Illinois Restaurant Association acquiesced, however, thanks to a compromise Johnson struck to phase in the base pay hike from the current $9.48 per hour to the citywide minimum wage of $15.80 over five years.
That comes out to 8% yearly raises starting July 1, 2024, through 2028. The minimum wage also is adjusted annually based on the cost of living.
Pink-clad supporters broke out in chants of “one fair wage” as Johnson walked into Council chambers before the vote. The vote originally was expected Wednesday, but City Clerk Anna Valencia’s office failed to post public notice 48 hours in advance of that meeting, prompting Johnson to call Friday’s special meeting.
Former restaurant worker James Rodriguez, 32, led a chorus of public speakers who spoke in favor of the ordinance before the vote.
“I can’t work and afford to live in the restaurant industry at the current wage,” he said. “I have contemplated getting back into the industry, but the only way to do that is if we can all afford to take care of our children and pay rent.”
Ald. Jessie Fuentes (26th), who introduced the ordinance, followed numerous Johnson allies who celebrated the increase before the vote, which she likened to the hospitality wage hike that unionized Pullman porters won in the early 20th century.
“This ramp-up will allow us to give our workers a raise every year, and for employers to do it in a way that makes sense for their finances,” Fuentes said. “Our restaurants ain’t going anywhere. We’re gonna make sure our restaurants can get it done. We’re gonna make sure our restaurants can make a profit, and we’re gonna make sure our workers are part of that.”
Ald. Nicole Lee (11th) was among the measure’s opponents, saying she “struggled” coming to a decision against the ordinance.
“My constituents feel that this is going to hurt more than it can help our local economy,” she said, reporting concerns from business owners in Bridgeport and Chinatown.
Another opponent, Ald. Nicholas Sposato (38th) said he “was 100% for the $15-an-hour minimum wage,” but said the city should “educate people on how to tip” rather than give businesses in suburbs like those bordering his Northwest Side ward a leg up over city restaurants.
“I believe we’re gonna get destroyed with this,” he said. “I appreciate the five-year ramp, but it’s still going to be a killer. Restaurants have a very slim profit margins. Restaurants are gonna be cutting jobs. They’re gonna be raising prices. They’re gonna be adding service charges.”
Lee and Sposato were among only a handful of voices speaking against the measure’s approval, which was scarcely in doubt two weeks after the Council’s Committee on Workforce Development voted 9-3 to advance it.
Restaurants already are required to make up the difference whenever tipped workers don’t make enough in tips to reach the minimum hourly wage paid to other Chicago workers. Proponents of the hike argued that many women of color and undocumented workers have no recourse against managers who don’t make up the pay difference.
“Yes, we have to raise the minimum wage, but we also have to enforce against the folks who are not following the rules,” Ald. Angela Clay (46th) said. “[Business owners] need to understand that if you’re not holding up your end of the bargain, you will be fined.”
A University of Illinois Urbana-Champaign study conducted last summer found that the base pay rate for 77% of tipped workers in Chicago fell between $9.24 and $15.40 per hour — the subminimum and citywide minimum for 2022 — while about 16% reported less than $9.24 per hour and fewer than 7% made more than $15.40.
The researchers also found that over half of the more than 1,200 workers they talked to were required to illegally “tip out,” or share their tips with managers.
“For anyone who’s worked in a restaurant, bar or cafe, you have a pretty good idea of how the practice of tipping can lead to discriminatory practices — and how it oftentimes has much less to do with your ability to actually do your job well than your ability to withstand certain types of abusive behavior from customers,” Alison Dickson, the study’s lead author, said in a statement.
Restaurateurs say the new ordinance adds up to a 66% increase in labor costs in an industry with already notoriously thin profit margins. They’ve also argued it would discourage customers from tipping, potentially even lowering some workers’ take-home pay.
In a statement, Illinois Restaurant Association president Sam Toia said “while we wholeheartedly disagree” with the ordinance, the five-year phase-in “represents a middle ground between what our members want and the City’s legislative priorities.”
“Change is always difficult, and we have fought such proposals for years,” Toia said. “However, negotiations require concessions by both sides to come to a resolution, and this ordinance is the result of an open dialogue between our organization, the Mayor’s office and members of the Chicago City Council.”
Ordinance opponent Ald. Anthony Napolitano (41st) said his Northwest Side “ward has seen an astronomical number of business shuttered. What I’m afraid of here is we’re treating these restaurants as if they’re the enemy … even though they’re trying to make a living, too.”
Ald. Jeanette Taylor (20th) dismissed those concerns, telling restaurant industry leaders: “You got bailed out. We bailed you out during COVID. We bailed out these corporations, but we refused to bail out the people. This is an easy lift if you care about the people. … We’ve got to get to a place where the people are the priority.”
Ald. Daniel La Spata (1st), who said he used to work for $2.35 an hour at a Red Lobster, said he’s “not so desperate for a cheaper chicken sandwich that I need to balance my bill on the backs of your workers.”
He pointed to other progressive measures passed in recent years, including the $15 minimum wage in the city and an ordinance requiring employers to provide paid sick leave.
“The sky keeps on not falling. Somehow, I have a feeling the sky is not going to fall here,” La Spata said.
