Chicago’s minimum wage would rise to $15-an-hour by 2021 — four years sooner than the state — but tipped workers would only be guaranteed 60 percent of that, under a mayoral compromise floated Wednesday that did not appease progressive aldermen.
Under the mayor’s plan, Chicago’s $13-an-hour minimum wage would rise to $14 on July 1, 2020 and $15-an-hour the following year. After that, minimum wage workers would be guaranteed an annual increase capped at 2.5 percent tied to the consumer price index.
The increase would apply to city workers and other agencies of local government under the mayor’s control. The cost to taxpayers was not immediately known.
Employees under the age of 18 would also get to a $15 hourly wage, but more gradually. They would start at $10 in 2020 and reach $15 by 2024. In 2025, Chicago would abolish its minimum wage exemption for teen workers.
The guaranteed hourly wage for tipped workers — many black and Hispanic women working at the lowest levels of the restaurant industry — is now $6.40. Next year, it would rise to $8.40, which is 60 percent of the $15 minimum wage taking effect the year after that.
Businesses with 20 or fewer employees would have an extended timeline. Their minimum hourly wage would rise by 50 cents next year, reaching $15 by 2023. Businesses with fewer than four employees would be exempt altogether.
That’s not good enough for Ald. Carlos Ramirez-Rosa (35th), dean of the City Council’s socialist caucus, who pointed to a study released last week.
Tipped workers in the Chicago area — now paid $6.40 an hour, plus tips — have twice the poverty rate of the rest of the regional workforce and 63 percent of them are “workers of color in casual restaurants where tips are meager, that study shows.
That’s the biggest differential between “white and people of color tipped workers of any region of comparable size in the nation.”
“It continues to harm the restaurant workers who need the raise the most, which are black and Latina servers who are subjected to sexual harassment and poverty wages as a result of the sub-minimum wage for tipped employees,” Ramirez Rosa said.
“Chicago has a lot of catching up to do to make sure that black and Latina women that work in the restaurant industry have economic justice. This proposal robs them of that economic justice because it fails to get them to parity when it comes to the minimum wage,” the alderman said.
Arguing that the “sub-minimum wage for tipped employees is the critical piece to get this right,” Ramirez-Rosa said, “The mayor has said she’s committed to eradicating poverty [and] making sure Chicagoans have social and economic justice. This minimum wage proposal she’s put forth fails to do that because it leaves black and Latino women in the service industry behind.”
Dan Lurie, Lightfoot’s policy chief, countered that “going from $6.40-to-$15 [an-hour] effectively overnight would be too much of a shock to the system” for the restaurant industry.
Lightfoot wants to get to $15 for tipped workers, “but we want to build out a ramp here and a schedule that allowed for restaurants, many of whom are very small, to be able to pull this off,” Lurie said.
Lurie called the mayor’s proposal a “win for business and workers” and a powerful part of Lightfoot’s anti-poverty strategy. But restaurants need a “chance to adjust,” he argued.
“The mayor is not unaware of the fact that the tipped wage economy is a very problematic economy. It’s mostly women, mostly women of color and one where there is demonstrated clear evidence of exploitation and other problems,” he said.
“We feel like this is a very promising first step in that direction [of economic justice]. But we didn’t feel like we could make sure a dramatic shift right now.”
Lightfoot told the Sun-Times last month she was dead-set against including tipped workers in the $15 minimum wage because of the impact it could have on the restaurant industry.
“There’s a lot we can do to really uplift the quality of life through raising the minimum wage and getting there faster than the state. But we have to do that in a way that is respectful to realities of how industries work. It’s not one size fits all. And the restaurant industry — from the workers to management — have said pretty resoundingly that the tipped wage is something that should be preserved,” she said then.
