The Battle Over Tipped Minimum Wage Heats Up in Chicago

Mayor Brandon Johnson wasn’t subtle in July when he donned a One Fair Wage apron supporting the abolition of the subminimum wage which enables restaurants to depend on tips to make up the difference between an $8 to $10 hourly wage and the standard minimum of $15.80 in Chicago.

Ridding the city of tipped wages has been a progressive goal for years and it was one of Johnson’s campaign promises. So four months into his term, it’s not a surprise he’s poised to make good on that goal.

Last month, Johnson and 25 alderpeople introduced an ordinance that was referred to the rules committee. Supporters were ready for public comment: “With the pandemic, tips went down and harassment went up, so we all started leaving the industry,” a woman told the council during a July meeting. “We are not coming back without one fair wage.”

The comment echoed what One Fair Wage President and co-founder Saru Jayaraman has told other news outlets: “Clearly when you pay your people an actual minimum wage with tips on top, you do better,” she told CBS Chicago.

However, local discussion of the effort — until this week — has been minimal in public. Josh Kulp, the co-owner of popular Avondale fast-casual restaurant Honey Butter Fried Chicken, has long been a champion of workers' rights, chiming in on the wellbeing of refugees and the racist and sexist history behind tipping. But this time around, Kulp says he hasn’t heard much buzz about abolishing the tipped minimum. Still, Kulp and company remain supporters of the movement: “If people are making more money, we believe that’s a good thing,” he says.

Last month at Cozy Corner, a bustling diner at the corner of Milwaukee and California avenues in Logan Square, an upbeat server was unequivocal in her perspective on tipping. She says her employers already pay the standard $15.80 minimum wage with tips on top and she’s seen the significant difference it’s made in her paychecks — especially when business is slow due to factors out of her control, like bad weather and big events in other parts of the city. “It can be so detrimental to work all day and end up with a very low check because of lulls and unpredictable tipping,” she says. “I think everyone should get paid a livable amount for the work they do.”

Now, the discussion appears to be firing up. Next week at 2 p.m. on Wednesday, August 16 at Takito Street in Lincoln Park, service industry workers are invited to what’s billed as a “non-company, sponsored or endorsed informational meeting with servers from other markets that have already abolished the tip credit like California, to learn about the efforts happening in Chicago. Interestingly, Takito Street is part of a chain owned by Illinois Restaurant Association member Mario Ponce. Publicly, the restaurant association has come out against the ordinance. While the association’s name wasn’t mentioned, Ponce and fellow member TJ Callahan of Farm Bar co-authored a column published Wednesday in the Tribune that objected to the abolition of tipped wages: “If Chicago makes the wrong move, restaurants will close, worker earnings will significantly decline and the quality of service will suffer,” the column reads. “Restaurant and bar owners, workers, customers, and the city will all lose.”

The Trib attempted to balance those words by running a piece that contained the worker perspective from Raeghn Draper, a hospitality worker and co-founder of the Chicago Hospitality Accountable Advocacy Database (CHAAD), a mutual aid organization active on social media that educates workers on social justice issues. Draper’s commentary contained nuance, going over the fraught histories of tipping and describing the effort to rid Chicago of tipped wages as “essential.” While Draper writes that abolishing tipped wages by itself is just a first step, they argue that the standard minimum wage isn’t sustainable for workers in a city as expensive as Chicago: “Due to borderline-unlivable working conditions for a large number of its workers, the hospitality industry suffers from extremely high turnover rates compared with other sectors of the U.S. economy.”

Draper also acknowledges speed bumps. Some workers at high-end restaurants “make a significant portion of their income through tips and fear the elimination of the tipped minimum wage,” they write.

A statement from CHAAD sent to Eater last month tackled the inequalities suffered by BIPOC women in the industry:

“Ending the tipped wage won’t automatically solve the issues we tackle, but it is a step in the right direction, in short. It would begin to ameliorate the uneven power dynamics between customer and worker, which currently lead to 76 percent of tipped workers reporting sexual harassment. It would also allow more financial stability for currently tipped workers, who by and large are women.”

Meanwhile, Ponce and Callahan argue in their piece that a one-size-fits-all approach will hurt independent restaurants. Fast-food chains and large companies are better equipped to deal with change. Prices will increase. Customers could see more service fees.

One restaurant owner, who didn’t want his name published for fear workers would call him out of touch, tells Eater that raising the tipped minimum wage would make sense in a place like, say Birmingham, Alabama, where the standard minimum wage is $2.13 per hour. However, they say it makes less sense in Chicago without an economy buoyed by culinary tourists who make it possible for servers at top-tier restaurants in West Loop or River North to make a career out of serving and in some cases take home six-figure incomes. Of course, the cost of living in Chicago is higher than Birmingham’s, which only requires the federal minimum of $7.25, so the comparison isn’t perfect.

Last month Johnson’s allies introduced an ordinance to the city council that would phase out the tipped wage in two years, but that’s still being negotiated. A revised ordinance will eventually make it to the council. Johnson has said, according to CBS Chicago that he’s determined, “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.”