King pushes to include tipped workers in $15 minimum wage despite Mayor’s opposition

NOVEMBER 7, 2019

Ald. Sophia King (4th) continues her push to eliminate a sub-minimum wage for tipped workers, a component of her plan to raise the raise the city’s minimum wage to $15 an hour, though Mayor Lori Lightfoot opposes including them.

Lightfoot supported raising the minimum wage to $15 during the mayoral election. It is among the many issues under consideration as the City Council and mayor work towards passing a budget.

At a City Hall press conference, King said restaurant industry growth in the seven states without a minimum wage exemption for tipped workers — California, Minnesota, Oregon, Washington, Nevada, Montana and Alaska — is because “if you pay someone a minimum wage, it increases their ability to be a key component in our economy.”

King said the mayor and other aldermen are working “towards a solution that will assure we lift these workers, most of whom are Black and Brown and women, out of poverty.” She said doing this while supporting a thriving restaurant industry, which has grown 13% over the past decade to 19,017 establishments, are not mutually exclusive, but rather are beneficial.

In her Oct. 23 budget address, Lightfoot said the $15 minimum wage will arrive by 2021 “through ongoing work with the City Council, business, labor and community groups who have been at the table.”

But in an Oct. 18 interview with the Sun-Times, Lightfoot said, “There are a lot of employees I’ve heard from. I’ve heard from restaurant owners (who) like the tipped wage. They’ve benefited from it. I’m gonna be responsive to those needs.

“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.”

Asked about the mayor’s position, King said Lightfoot is continuing to “learn and educate herself” about the issue.

“I appreciate the mayor’s continued willingness to talk about this, and I appreciate that dialogue,” King said. “We’ve always talked about a gradual phase in, as they’ve done throughout the country.”

“What we really want to do … is, we want to make sure that people who are the most impacted from a financial standpoint — the most vulnerable people — have dignity, have a living wage to take home,” King said, adding that their salaries have not kept up with inflation while the restaurant industry continues its rise.

Asked how the minimum wage would be phased in — it’s due to rise to $15 statewide by 2025 — King that the timetable is under review but currently 6 years with “a gradual increase of the sub-minimum wage over that period of time.” She did not say what the gradient would be, though she said it would be done “carefully and gradually.”

Ald. Carlos Ramirez-Rosa (35th) of Logan Square, who spoke at the press conference with King, has said he would vote against a minimum wage bill that did not include tipped workers.

King and Alds. Leslie Hairston (5th) and Jeanette Taylor (20th), both of whom were at City Hall for the Budget Committee meeting, all said they want the minimum wage increase to be voted on separately from a budget.

“I have no idea what will be in the final budget,” King said, “but I do think they should be separated, because I think I would not want this to be held hostage by the budget or vice versa. I think this merits an up-or-down vote on its own, and so does the budget.” She said having separate votes “is where we’ve been heading the whole time,” though she cautioned she could not speak for the administration.

Hairston agreed that the minimum wage increase “should stand alone, unless it’s a ploy to try to get people to vote for a budget.”

“The problem with that, if that is the strategy, is that I am not going to be forced to vote for higher property taxes for my residents,” she said. “At this point, I will not, because there are other sources where we can go. I am tired of the city going to the same well all of the time, treating our taxpayers as if they are a piggy bank and us not seeing the investment.”

“I don’t feel like it’s fair: I feel like it’s pushing us to choose between a budget that we don’t agree with but also making sure that people make a living wage,” Taylor said. “I think it’s going to be used against us to vote for a budget that we don’t agree with. I don’t agree with giving the police more money. I’m totally against a lot of these budgets, because I don’t feel like they don’t put people first, which is something we all promised to do.”

Nevertheless, King said she is “very optimistic about the essence of the ordinance and where the mayor is on it.”

At the press conference, Saru Jayaraman, a professor at the Goldman School of Public Policy at the University of California, Berkeley, and president of the One Fair Wage restaurant worker advocacy group, said some of the tipped workers in Chicago make wages below the city’s $12 minimum because their employers do not pay them the difference between their $6.40 hourly tipped wage and additional tips.

Jayaraman released a data analysis that found serious racial disparities among tipped Chicago workers: among Black women, a third live in poverty, half participate in the Supplemental Nutrition Assistance Program (SNAP, commonly known as food stamps), 3.5 times the rate of all other workers and 45% are on Medicaid.

“While all tipped workers have 2 times the rate of poverty as the rest of the workforce, Black tipped workers have 3 times the poverty rate of the rest of the U.S. workforce, and black workers in particular have 3.5 times the poverty rate as the rest of the workforce,” Jayaraman said, calling it the greatest racial disparity “of any region of comparable size in the United States,” blaming it on industrial segregation in Chicago, where workers of color commonly work at lower-tipping restaurants and positions.

Research also shows that Black restaurant workers are tipped less than their White counterparts.

Jayaraman said tipping originated as an expression of gratitude on top of regular wages, but employers utilized tipping as an excuse to not pay African Americans after the emancipation. Tipped workers were not included in the Fair Labor Standards Act of 1938, which enacted the federal minimum wage.

She added that the states that include tipped workers in a single minimum wage policy have higher per capita restaurant sales, industry job growth, overall tipping rates and 50% lower rates of sexual harassment. Poverty rates among restaurant workers of color declined by a fifth, and the poverty rate among Black workers declined by a third.

Jayaraman said that Patricia Smith, the Solicitor of the U.S. Department of Labor from 2010 to 2017, found an 84% violation rate of the law requiring employers to pay their workers the minimum wage if tips do not add up to it.

“What we’ve seen anecdotally across the city and across the country is that employers are stepping into that lack of enforcement and basically declaring many workers sub-minimum wage workers who weren’t sub-minimum wage workers before and not at all caring whether they’re making enough money in tips to bring them to the full minimum wage,” Jayaraman said. “We’ve seen coffeeshops reduce their workers’ wages from the full minimum wage to the sub-minimum wage because there’s so little enforcement anymore.”