CHICAGO (Nov 13, 2019)– The Lightfoot administration introduced an ordinance at Wednesday’s City Council meeting laying out the administration’s plan for raising the minimum wage, which included a sub-minimum wage for tipped workers.
The Chicago City Council Progressive Reform Caucus responded by calling on the administration to eliminate the sub-minimum wage for tipped workers, a key component of their plan to raise the city’s minimum wage to $15 an hour.
“From the outset, we have made elimination of the sub-minimum wage a fundamental aspect of this initiative,” said Ald. Sophia King (4), “Tipped workers experience twice the poverty rate of the Chicago workforce and the vast majority of these workers are women and women of color. We have to get this right—it’s about equity and fairness for all workers in Chicago. ”
The Chicago City Council Progressive Reform Caucus along with the Raise Chicago coalition have worked since 2014 to raising the minimum wage in Chicago to $15 an hour for all workers.
Last week, One Fair Wage, a New York-based nonprofit that advocates for ending the subminimum wage released a report that found more than 27% of black workers in Chicago’s dining industry were living in poverty, compared with about 18% of white workers in the same occupation.
“We have worked on this for over 4 years. Every step of the way we have been clear this initiative was about making sure that the most vulnerable workers in our city are treated with dignity and have a living wage to take home,” said Ald. Sue Sadlowski-Garza (10), “Closing the gap between tipped and non-tipped employees is a critical piece of this effort. We have to provide relief to the workers who need this most.”
The study by One Fair Wage showed that people of color in Chicago are disproportionately affected by the subminimum wage. According to the report, “Tipped workers in Chicago access healthcare through Medicaid at 1.8 times the rate, and access food stamps through the Supplemental Nutrition Assistance Program (SNAP) at 1.4 times the rate of the overall workforce… Black women are the hardest hit by Chicago’s subminimum wage. One-third live in poverty, one-half depend on food stamps to make ends meet, and forty- ve percent depend on Medicaid — all three to five time over times the rate of the general workforce.”
“It is a shame that while these workers serve us they aren’t able to put food on their own Family’s table,” said Ald. Jeanette Taylor (20), “This isn’t just about ensuring tipped workers are treated fairly, this is also about generating economic activity in the communities these workers go home to, most of which are on the south and west side.”
Previous studies by the Center for Popular Democracy have shown the potential effects of a minimum wage increase of $15 for Chicago corporations that made over $50 million and found that such an increase would generate $616 million in new economic activity, $45 million in new sales tax revenue and 5,350 new jobs.
Background: Chicago’s restaurant industry employs about 178,130 workers and tipped occupations account for nearly four percent of the city’s employment. In the entire state of Illinois, restaurant jobs are expected to increase by 7 percent through 2029.
Tipped workers in Chicago are paid a subminimum wage of only $6.40 an hour and are forced to rely on tips for the majority of their income. Chicago’s tipped workforce earns 49 percent of the city’s minimum wage of $13, a percentage that is lower than the state’s subminimum index. While Illinois has a tiered wage system, the state’s subminimum wage is indexed at 60 percent of the minimum wage. Low subminimum wages result in tipped occupations being amongst the lowest-paid occupations in the city, and Black tipped workers are the hardest hit.
The Progressive Reform Caucus of the Chicago City Council is dedicated to creating a more just and equal Chicago, combating all forms of discrimination, and advancing public policies that offer genuine opportunity to all Chicagoans, especially those who have been left out of our society’s prosperity.
The Progressive Reform Caucus includes Ald. Daniel LaSpata (1); Ald. Sophia King (4); Ald. Leslie Hairston (5); Ald. Roderick Sawyer (6); Ald. Susan Sadlowski-Garza (10); Ald. Stephanie Coleman (16); Ald. David Moore (17); Ald. Jeanette Taylor (20); Ald. Michael Rodriguez (22); Ald. Byron Sigcho-Lopez (25); Ald. Chris Taliaferro (29); Ald. Rossana Rodriguez (33); Ald. Carlos Ramirez-Rosa (35); Ald. Felix Cardona, Jr. (31); Ald. Scott Waguespack (32); Ald. Andre Vasquez (40); Ald. Matt Martin (47); Ald. Maria Hadden (49).