CHICAGO (CN) — Service employees in the Windy City scored a win on Friday when the City Council voted overwhelmingly to phase out sub-minimum wage pay for tipped workers.
"These are heads of households and anchors of communities who are finally receiving a bit more of the respect and dignity they deserve," Mayor Brandon Johnson said at a press conference following the vote.
Chicago's current minimum wage for non-tipped workers is $15.80 per hour for businesses with more than 20 employees and $15 per hour for businesses with 20 or fewer employees. Tipped workers at large businesses, by contrast, make $9.48 per hour, and those at smaller businesses only make $9 per hour.
Friday's passage of the so-called One Fair Wage Ordinance ensures that won't be the case for very long.
“The One Fair Wage win demonstrates that Chicago values the labor of our workers. We have declared that their work is dignified and worthy of a fair wage,” 26th Ward Alderperson Jessie Fuentes, the ordinance's primary sponsor, said in a prepared statement. “This vote will lead to a stronger economy and a safer city, especially for our Black and Brown families."
The 36-10 vote is also a major victory for Johnson himself, his left-leaning allies on the council and the One Fair Wage Coalition, a group that advocates eliminating sub-minimum wage pay nationwide. The new ordinance fulfills a policy goal Chicago's socialist and progressive factions have pursued for years, as well as a campaign promise the former public school teacher made during the mayoral race last winter.
Members of the One Fair Wage Coalition, dressed in pink as they attended the vote in city hall, said they hoped the ordinance's success would inspire the passage of similar laws across the country.
"We work... very hard for the money and to support our families and to be able to afford rent in the areas that we work in. And that's not possible in the city that we live in today, and that's not fair," 32-year-old One Fair Wage Coalition member James Rodriguez, who claims to have worked in the restaurant industry since he was 13, years old, told the council prior to the vote.
"That needs to change today. We need to make history today and change that."
Rodriguez and others' pay raise will not be immediate. Per the terms of the newly-approved ordinance, tipped workers in the city will receive an 8% annual pay increase beginning in July 2024 and continuing through July 2028, when they will make full municipal minimum wage.
The five year on-ramp is a compromise reached last month between Johnson's administration, the 25 left-leaning city councilors who sponsored the ordinance and the city's restaurant industry, represented most vocally by the Illinois Restaurant Association.
The association balked at the initial version of the ordinance, which sponsors introduced in July, as it proposed only a two-year transition to full minimum wage. Johnson's allies on the council rejected in turn a proposal the restaurant association put forward last month, via its own city council supporters, for a $20.54 per hour minimum wage for tipped employees working at restaurants that made more than $3 million each year.
In late September the Illinois Restaurant Association made it clear that it only supported the amended, five year on-ramp plan through gritted teeth.
"While we wholeheartedly disagree with the city’s decision to move forward with the elimination of the tip credit, we do believe the amended 5-year phase-in plan agreed to by the city council and our association’s board of directors is the best possible compromise possible between our members and the city," the association said in a statement. "It will help give the restaurant industry time to adjust to the new financial reality that operators will endure once the tip credit is fully eliminated."
More conservative city council members also voiced their opposition to the ordinance before Friday's vote.
Several of the ten alders who voted no, including 42nd Ward Alderman Brendan Reilly, represent wealthy areas of the city with politics that are more business-friendly in general than Johnson and his allies' own. Others, like 11th Ward Alderwoman Nicole Lee, represent areas of the city with large restaurant scenes.
"In my community... between Bridgeport and Chinatown, we have over 150 restaurants, 90 of them in Chinatown alone. It is the lifeblood of our community and it brings a lot of tax revenue to the city as well," Lee said before the vote. "My constituents there feel that this is going to hurt more than its going to help our local economy."
One Fair Wage Coalition President Saru Jayaraman, however, offered the perspective that Friday's vote was a move forward for the city as a whole, and compared it to another landmark in Chicago's labor history: the Pullman railroad strike.
“Nearly one hundred years after the Pullman car porters won One Fair Wage in Chicago, the Black women who are the majority of tipped workers in Chicago are finally about to win a full, livable wage plus tips," Jayaraman said in a prepared statement.
"This incredible victory is not only going to improve the lives of hundreds of thousands of Chicagoans and help small businesses by bringing workers back into the restaurant industry; it's also going to kick off a series of wins for low-wage service workers in cities and states across the country that will raise wages for millions nationwide.”
Chicago is the largest city in America to abolish sub-minimum wage for tipped workers independent of changes to state law. However, Alaska, California, Guam, Minnesota, Montana, Nevada, Oregon and Washington have already enacted similar state and territory laws.
Current Illinois minimum wage is $13 per hour for non-tipped workers and $7.80 for tipped workers.
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