Tipped minimum wage set to go up in Chicago July 1, and some restaurateurs aren't pleased
Some of Chicago's restaurant workers are about to get a raise — and not everyone is happy about it.
On Tuesday, July 1, the city's minimum wage will go up, along with wages for tipped workers, as part of Chicago's One Fair Wage Ordinance.
At a celebration of the ordinance on Monday, the people who lobbied for it at City Hall called it "a total success."
The ordinance, approved in 2023, said workers in the service industry whose hourly rate including tips is below the city's minimum wage will eventually be brought up to the same minimum wage as the rest of the workers in the city.
"My administration will remain steadfast in the passage of the One Fair Wage Ordinance — not only because it was a promise that I made, but because we know that it was the right thing to do for the people of Chicago," said Mayor Brandon Johnson.
Right now, the minimum wage for non-tipped workers in Chicago is $16.20 per hour. For tipped workers, it is $11.02.
Starting Tuesday, July 1, those figures go up to $16.60 and $12.62.
The tipped workers' minimum wage will continue to increase 8% each year until it reaches the city's minimum wage for non-tipped workers in 2028.
"Too many workers across Illinois are left behind — stuck on subminimum wages," said Richard Rodriguez, national policy director for One Fair Wage. "Immigrants, women, and people of color are the backbone of the service industry, and they deserve better."
Restaurant owners are required to compensate workers whose wages with tips are less than the minimum wage for non-tipped workers.
Proponents of the ordinance said not everyone was doing that. However, the head of the state's restaurant lobby claims workers are already making the minimum wage.
"You need to make sure that all people that wait tables or bartenders are making $16.20," said Sam Toia, chief executive officer of the Illinois Restaurant Association. "If they're not, then employers need to make that up, so nobody makes less than minimum wage.
Some members of the Illinois Restaurant Association said the wage increases have forced some restaurants to shut down, while others have raised prices or cut hours or staff to tighten their finances.
Eric Williams is one of them.
"You have to make changes. Either you'll have to raise prices, you're going to have to cut servers, or cut down service, or both," said Williams, "and that's what we have done."
At Bronzeville Winery, Williams said there has always been a 20% service charge to take care of employees. He said the new wage increases have added $30,000 to his annual expenses
"I think this idea of servers not making money is just, it is a false narrative," said Williams. "From the beginning, the very idea of what they were trying to do was not true — not rooted in any truth."
The folks at Fair Wage said they hope to expand the policy statewide. Meanwhile, Toia said he is heading to speak to restaurateurs in Springfield about how this could also impact them.
A similar initiative was passed in Washington, D.C. in 2022 to much fanfare. But Mayor Muriel Bowser has now called for its repeal, saying the method is failing employees and small businesses.
