New tipped wage draws mixed predictions
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Tip jar at Chicago cafe. Photo: Monica Eng/Axios
Chicago's minimum wage for tipped workers jumps today from $9.48 to $11.02 per hour.
Why it matters: It's the first tangible benefit of the One Fair Wage ordinance, which was passed last year to close the pay gap between tipped and non-tipped workers.
- The regular minimum wage jumps to $16.20.
Yes, but: The new rule is causing concern among some restaurant owners and confusion among consumers.
How it works: Each year the city's tipped minimum wage will grow by 8% until it matches the regular minimum wage in five years.
- Currently if workers' wages plus tips don't bring them to the regular minimum wage of $16.20 their employer must make up the difference.
What they're saying: "This is fantastic," One Fair Wage campaign president Saru Jayaraman tells Axios.
- "Square [payroll system] data shows that over 60% of Chicago restaurants have actually already moved to paying the full minimum wage and they're doing fine," she said.
The other side: Illinois Restaurant Association CEO Sam Toia tells Axios he's concerned the move will lead some diners to tip less and "lower the take-home pay for hardworking employees."
- He says local restaurateurs worry the wage hike will force them to "increase the costs on consumers," and possibly "put thousands of workers at risk of losing their jobs."
Zoom out: Roughly a year after a similar wage-boosting policy kicked off in Washington, D.C., the district has lost 925 full-service restaurant jobs, federal data shows.
- Yes but: D.C. restaurants gained 540 jobs from April to May this year.
The upshot: As the new wage rules come into effect, consumers may be left wondering how they should now tip.
- "We encourage customers to continue tipping based on the quality of service from skilled professionals," OFW says.
- And the restaurant association agrees with them.
What's next: State Rep. Lisa Hernandez (D-Cicero) says she will tweak and reintroduce a bill that failed in the last session to raise the tipped minimum wage to $15 across the entire state.