Lightfoot floats minimum wage compromise

Chicago’s minimum wage would rise to $15-an-hour by 2021 — four years sooner than the state — but tipped workers would be guaranteed only 60 percent of that.

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Protesters seeking a higher minimum wage demonstrated in front of a McDonald’s restaurant in downtown Chicago in 2014.

Protesters seeking a higher minimum wage demonstrated in front of a McDonald’s restaurant in downtown Chicago in 2014.

Sun-Times file photo

Chicago’s minimum wage would rise to $15-an-hour by 2021 — four years sooner than the state — but tipped workers would only be guaranteed 60 percent of that, under a mayoral compromise floated Wednesday that did not appease progressive aldermen.

“This represents the single most important way my administration has addressed poverty in our city,” Lightfoot said.

“Minimum wage workers in Chicago are mostly women and mostly women of color. There’s more to come on my anti-poverty agenda. But I want to move forward now to address the chronic wage stagnation that’s prevented hundreds of thousands of people working in Chicago from getting a raise.”

Under the mayor’s plan, Chicago’s $13-an-hour minimum wage would rise to $14 on July 1, 2020 and $15-an-hour the following year. After that, minimum wage workers would be guaranteed an annual increase tied to the consumer price index, but capped at 2.5 percent.

The increase would apply to city workers and other agencies of local government under the mayor’s control. The cost to taxpayers was not immediately known.

Employees under the age of 18 would get to $15-an-hour, but more gradually. They would start at $10 in 2020 and reach $15 by 2024. In 2025, Chicago would abolish its minimum wage exemption for teen workers.

The guaranteed hourly wage for tipped workers is now $6.40. Next year, it would rise to $8.40, which is 60 percent of the $14 minimum wage proposed for that year.

Businesses with 20 or fewer employees would have an extended timeline. Their minimum hourly wage would rise by 50 cents next year, reaching $15 by 2023. Businesses with fewer than four employees would be exempt altogether.

The City Council’s Progressive Caucus was not satisfied with the mayor’s compromise.

They pointed to a study released last week that showed that tipped workers in the Chicago area have twice the poverty rate of the rest of the regional workforce and that 63 percent of them are “workers of color in casual restaurants” where tips are meager.

“Chicago has a lot of catching up to do to make sure that black and Latina women that work in the restaurant industry have economic justice. This proposal robs them of that economic justice because it fails to get them to parity when it comes to the minimum wage,” said Ald. Carlos Ramirez-Rosa (35th).

“It continues to harm the restaurant workers who need the raise the most, which are black and Latina servers who are subjected to sexual harassment and poverty wages as a result of the sub-minimum wage for tipped employees.”

Ald. Sophia King (4th), City Council champion for a $15-an-hour minimum wage, said eliminating the “sub-minimum wage” has been a “fundamental aspect” of her years-long campaign.

“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,” she said.

Ald. Susan Sadlowski Garza (10th), Lightfoot’s handpicked chairman of the City Council’s Committee on Workforce Development, added, “We have worked on this for over four years...Closing the gap between tipped and non-tipped employees is a critical piece of this effort.”

Dan Lurie, Lightfoot’s policy chief, countered that “going from $6.40-to-$15 [an-hour] effectively overnight would be too much of a shock to the system” for the restaurant industry.

“We want to build out a ramp here and a schedule that allows for restaurants, many of whom are very small, to be able to pull this off,” Lurie said.

Lurie acknowledged that the “tipped wage economy” is “very problematic” and that there is “clear evidence of exploitation and other problems.” But he argued that restaurants need a “chance to adjust” to higher wage costs.

“We feel like this is a very promising first step in that direction [of economic justice]. But we didn’t feel like we could make sure a dramatic shift right now,” he said.

Lightfoot told the Chicago Sun-Times last month she was dead-set against including tipped workers in the $15 minimum wage because of the impact it could have on the restaurant industry.

“There’s a lot we can do to really uplift the quality of life through raising the minimum wage and getting there faster than the state. But 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,” she said then.

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