City Council introduces ordinance on fair wages for tipped workers
CHICAGO (CBS) -- The push is on to raise the minimum wage for Chicago restaurant workers who receive tips.
A group of Chicago alderpeople introduced a measure to do so in the City Council on Tuesday. It would give restaurants two years to have all tipped workers increased to Chicago's minimum wage, which is $15.80 an hour, plus any tips they earn.
They currently make $9 dollars an hour plus tips, but employers are required to make up the difference if the combined amount of hourly pay and tips does not equal the full minimum wage.
The plan would be to phase out the sub-minimum wage over two years once the ordinance is passed.
The alderpeople who want to get rid of the sub-minimum wage say it is needed for many reasons – including ensuring that restaurant workers make a livable wage. They say considering so many women – especially women of color – and young people work as restaurant services, this raise would help them better care for themselves and their families and keep restaurants staffed.
"The data shows that when you raise restaurant workers' wages, the economy as a whole does better," said Ald. Carlos Ramirez-Rosa (35th).
"Clearly, when you pay your people an actual minimum wage with tips on top, you do better," said Saru Jayaraman, President of One Fair Wage.
But Nick Thanas, owner of Lou Mitchell's at 565 W. Jackson Blvd., believes the ordinance will be damaging to restaurants.
"It's going to impact them dramatically – their expansion, the amount of employees they can hire. It may reduce the number of people working in a restaurant, because it's going to be a financial strain ultimately on the business," Thanas said.
He emphasized that labor costs add up for restarurants.
"At a small business like ours, or individual standalones, it's a big impact - a huge impact," Thanas said. "The small amount that we have – maybe 15, 18 tipped employees – it could impact us by six figures."
Thanas said the ordinance will put many restaurants out of business – and force others to reduce staff or get rid of servers altogether.
"You will not have the quality of service" Thanas said. "You're going to have an iPad in front of you."
But proponents say if other cities and states have done it, Chicago can too.
Mayor Brandon Johnson is firmly in favor of the ordinance.
"We have to do this, because these type of investments is a type of economic investment that has to take place in order to revive and to restore our communities. People who we ultimately provide better wages for are the very families that will be able to feed their families, or eat at the very restaurants that they work in. These are the families that will have the ability to pay their rent or their mortgages," Johnson said. "Make no mistake about it. This is about investing in people – Black women, Brown women, heads of household – because by investing in people, we strengthen the backbone of our economy, and again this is how we embrace the soul of Chicago."
As to the issue of the costs to small businesses that Thanas is concerned about, the mayor said: "We're working together. All stakeholders will play a part in coming up with the best pathway forward."
Johnson said he looks forward to discussing the issue with all critical stakeholders – including both workers and hospitality industry representatives, "to find the best pathway forward to eliminate this tipped wage structure that ultimately has worked against the economic viability of the city of Chicago."
Again, the plan would be to phase out the sub-minimum wage over two years – but that is still being negotiated.
Right now, the ordinance has been moved to the Rules Committee – so it is not clear when or if the full City Council will vote on it.
