Chicago’s “sub-minimum wage” for tipped workers is a “direct legacy of slavery” that has disproportionately impacted African Americans in general and black women in particular, according to a new study.
Tipped workers in the Chicago area — now paid $6.40-an-hour, plus tips — have twice the poverty rate of the rest of the regional workforce. And 63% of them are “workers of color” in casual restaurants, where tips are meager, the study shows.
Black tipped workers in Chicago have three times the poverty rate of the rest of the U.S. workforce — and the disparity rises to 3.5 times for African-American women.
That’s the biggest differential between tipped workers who are white and those of color of any comparably sized region in the United States.
And it’s a direct result of what the study calls Chicago’s “severe segregation,” which relegates black and Hispanic tipped workers to casual restaurants and lower-tipping positions, like busing tables, instead of higher-tipping jobs, including server and bartender.
The results underscore the urgency of including tipped workers in an ordinance raising Chicago’s minimum wage to $15 an hour by 2021, four years sooner than mandated by state law, said Saru Jayaraman, director of the University of California at Berkeley’s Food Labor Research Center.
The study was conducted by the center in partnership with One Fair Wage and Restaurant Opportunities Centers United.
“It results in this extreme disparity we have not seen anywhere else. It results in … a third of black tipped women experiencing poverty and one-half of black tipped women in Chicago having to live on food stamps,” Jayaraman told a City Hall news conference Thursday.
“That is an appalling statistic. … The women who put food on our tables in most restaurants in Chicago can’t afford to put food on their own families’ tables.”
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Lightfoot threw a bone to progressives disappointed by her proposed 2020 budget by promising to raise Chicago’s minimum wage to $15 an hour by 2021 because “working families can’t wait until 2025.”
But she told the Sun-Times last month she was dead-set against including tipped workers in the $15-an-hour minimum wage because of the impact it could have on the restaurant industry.
“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,” the mayor said then.
“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.”
Since then, Ald. Carlos Ramirez-Rosa (35th) said the mayor’s legislative liaison Samantha Fields has met with the City Council’s Progressive Caucus and told aldermen Lightfoot’s position has “moved,” and the mayor is now “open to eliminating the sub-minimum wage.”
Fields Thursday would say only that negotiations on the tipped wage issue continue.
The mayor has an incentive to change her tune, Ramirez-Rosa said.
“We are gonna fight to remove it from the budget if it does not include the sub-minimum wage,” Ramirez-Rosa said.
Ald. Sophia King (4th), chief sponsor of the $15-an-hour minimum, said she’s talking to the mayor’s office about a six-year phase-in for tipped workers; annual increases would be $1.25, $1.50 or more.
“I appreciate the mayor’s continued willingness to talk about this and I appreciate that dialogue,” King said.
In a statement, the mayor’s office said Lightfoot is “committed to ensuring we responsibly raise the minimum wage in…Chicago to $15 by 2021. We are continuing to work closely with advocates and stakeholders to address concerns and proposals around the tipped wage.”