The hourly pay of Chicago’s tipped workers would be frozen at 76% of the minimum wage for the next two years for large restaurants and the next four years for smaller establishments, thanks to a compromise advanced Tuesday without Mayor Brandon Johnson’s involvement.
Nearly two months after Johnson used his third veto to preserve one of the the key items on his progressive to-do-list, the Committee on Workforce Development snatched that political victory away from the embattled mayor.
Johnson was emphatic about snuffing out what he called a “well-organized, corporate-funded effort to blame rising costs on Black and Brown workers while seeking to take hard-fought raises away from the very same workers.”
Rookie Ald. Walter R. Burnett (27th) was equally determined to find middle ground — and so were his colleagues. They came up with a compromise that pleases no one, but is accepted by both sides.
After initially proposing a one-year freeze, Burnett convinced the Illinois Restaurant Association and the One Fair Wage Coalition to swallow a two-year freeze of the subminimum wage phase-out, but only for larger restaurants and bars. Establishments with three to 21 employees would be free to continue paying the subminimum wage for the next four years.
Burnett said his colleagues from across the city were particularly concerned about protecting small restaurants that are the lifeblood of their communities.
“This is a compromise from the progressive side in order to try to support those small businesses to give them more time to deal with increases” that amounted to “a higher percent of their total costs,” Burnett said.
Burnett acknowledged having gone around the mayor who appointed him to replace his father, retired City Council dean and former Zoning Chair Walter Burnett Jr.
“I haven’t had a chance to talk to the mayor about this, but I imagine he’s pretty steadfast on his stance” that Black and Brown women who hold a large share of jobs in the restaurant industry deserve an immediate pay hike, Burnett said.
“This is something that’s been negotiated with the alders and the coalition, and I hope it’s something that we can get a majority rule on so it doesn’t have to be in the mayor’s hands,” Burnett said.
Illinois Restaurant Association President Sam Toia agreed to the revised compromise, even though he offered an alternative that would have guaranteed tipped workers “24% more than the regular minimum wage.”
“We continue to believe that was the better policy. It preserved the tipping model while also guaranteeing a premium outcome for workers. If tips were strong, the worker would have benefited. If tips were low, the employer had to make up the difference,” he said.
Toia said he reluctantly agreed to a compromise that is “not the ideal outcome for our industry” because it’s “more workable and less harmful” to restaurants fighting for survival, particularly in wards that border surrounding suburbs.
“That additional time matters. Restaurants are facing increased costs for labor, food, rent insurance, utilities, taxes and fees. Operators need time to adjust so they can keep their doors open and their staff employed,” Toia said. “Predictability matters for workers, too. Abrupt changes can lead to reduced hours, fewer shifts, higher menu prices, more service charges and fewer opportunities for tipped employees.”
Toia wasn’t the only one who found the compromise tough to digest.
Saru Jayaraman of the One Fair Wage Coalition was also reluctant to go along with a plan to authorize a multi-year wage freeze for what she called the “lowest-wage workforce in Chicago in the midst of the greatest cost of living increase in United States history.”
“If we are going to agree to this substitute, which we said we can live with, this has to be the end of the conversation. We should not have to continuously re-litigate something that the city has already agreed is the right thing to do, which is paying this lowest-wage workforce a full minimum wage with tips on top, like every other workforce in the city of Chicago,” Jayaraman said.
The compromise comes up for a vote before the full City Council next week.
Without the freeze, tipped workers now paid $12.62 an hour would receive a raise to 16% of Chicago’s minimum wage. That amount is reset every July 1 to match the cost of living. With the freeze, they would still receive a raise, but it would be capped at 76% of whatever the minimum hourly wage turns out to be.
Restaurants are mandated by law to make up the difference for servers whose hourly pay and tips do not equal the minimum wage.
