labor Chicago Is About To End the Subminimum Wage
Eighty-five years after it was codified, the subminimum wage for tipped workers is one step closer to being eliminated in one of the very places the practice first began — and providing a progressive mayor and elected socialists a major victory at the municipal level.
Chicago mayor Brandon Johnson’s One Fair Wage ordinance cleared the City Council’s workforce committee in a 9-3 vote this past Wednesday, the culmination of years of organizing by low-wage workers and activists, and of months of wheeling and dealing by the mayor and his socialist allies in the city council. If approved by the city council on October 4, as it’s expected to be, the ordinance will scrap the city’s two-tier wage system that leaves tipped workers laboring for a minimum wage five dollars lower than nontipped counterparts, with a uniform $15 minimum wage phased in for all workers by 2028.
The measure has been framed as the first major test of Johnson’s progressive agenda, and it’s clear the mayor and his allies see it similarly.
“This is the first major redistributive policy we’re passing,” said Alderman Carlos Ramirez Rosa, the first socialist elected to the city council back in 2015, and who now serves as the mayor’s floor leader. Johnson’s spokesperson called it “a huge step forward in delivering a fair wage for workers, many of whom are Black and Brown women who are heads of households.”
“It is the right moment for the city of Chicago,” says Alderman Jessie Fuentes, who introduced the ordinance.
Elated One Fair Wage organizers stood shoulder to shoulder with progressive alderpeople in Chicago’s City Hall as they celebrated a victory that started all the way back during the Rahm Emanuel administration. But tipped workers were stiffed again and again: Emmanuel showed no interest in eliminating the tipped wage, angering workers with a paltry raise instead, while Lori Lightfoot obstructed a proposal for a uniform wage that was pushed by progressives and socialists in the council.
“It makes such a difference when a true progressive and an organizer is in power,” said Saru Jayaraman, president of One Fair Wage, an organizing group working to eliminate the subminimum wage for tipped workers nationwide. Johnson is the first Chicago mayor in decades with a labor background, having worked as an organizer for the Chicago Teachers Union, which donated heavily to his campaign and with which his administration continues to have close ties.
Under the ordinance, which would go into effect next July, tipped workers’ pay would rise 8 percent each year until reaching parity in 2028, part of a compromise struck with the restaurant industry. The original version of the ordinance filed back in May had mandated a much shorter two-year phase-in, but after the Johnson administration negotiated with the restaurant industry that timeline went up to five. As a result, the Illinois Restaurant Association (IRA) wound up reluctantly backing the ordinance, even as the National Restaurant Association vocally criticized and lobbied against it. Having the IRA’s support was viewed as crucial to maintaining backing from more centrist members of the city council, many of whom take money from the restaurant industry and were sure to get an earful from local small businesses about the measure.
For Johnson, the win will be a vindication of a deliberative approach that has seen the mayor reach out to those sectors most likely to oppose his agenda, and for which he has been criticized at times, with some charging that the administration hasn’t moved quickly or aggressively enough on its priorities during the first hundred days. For the mayor’s allies, the win is the direct result of intense groundwork laid during that period — and one that will hopefully spur momentum for the rest of his agenda.
A Hard-Fought Victory
It’s been a long road for the ordinance, with some surprises up to the day of the committee vote.
Eyebrows were raised that morning when IRA president and CEO Sam Toia switched from serving as an expert witness in favor of the ordinance to merely giving a short public statement in support. Later in the day, at least one presumed “yes” vote switched to a “no.” At one point the ordinance’s opponents referred it to the rules committee, which has a reputation, according to Fuentes, as the place “ordinances go to die.”
In fact, right up until the end, the IRA backed alternative proposals to the ordinance, including one that would have kept the lower tipped wage while raising Chicago’s minimum wage to the highest in the country, and another that would have levied stiffer fines on businesses that did not make up the gap between tipped workers’ wages and the minimum wage. Under Chicago’s current law, businesses are legally required to pay out the difference if tipped workers’ wages don’t, in practice, meet the minimum wage everyone else is getting.
In reality, many businesses simply avoid this requirement. Rosa, who says he spoke with dozens of tipped workers as the ordinance was winding its way through the council, said many had no idea there was such a provision, while some who did were too intimidated to bring it up. He recounted the story of one tipped worker who demanded her employer pay her what she was legally owed, only for him to question whether she had documentation to be in the country and demand that she present it to him — something she was able to do, but which many low-wage workers in Chicago cannot.
It was a sometimes-raucous hearing on Wednesday, as both camps whooped, cheered, and chanted for the speakers they had brought out to make their case. On the One Fair Wage side, the assembled coalition included SEIU, UNITE HERE, Fight for $15, and Our Revolution. On the opposition side, the cities’ major developers and restaurant owners appeared to have engineered a turnout of workers. “A lot of the folks who were at the Workforce Development Committee work for one entity owned by Sterling Bay,” says Fuentes.
There was a clear contrast between the workers who spoke on either side. The workers who testified in favor of keeping the subminimum wage said the current system had allowed them to put away savings to go back to school, to live in more expensive parts of the city, or even start a film production company, stressing that their tipped wage job was a part time one that allowed them to pursue other dreams and interests. One of the workers, an employee at the upscale Gene & Georgetti restaurant in Chicago’s River North, repeated much of what had already appeared that morning in a Chicago Sun-Times op-ed she’d authored, contrasting herself, a “tipped professional,” with a lowly cashier on minimum wage. “This is a system that’s worked for us for years,” she said.
But it was clear it does not work for everyone. For those backing the One Fair Wage proposal, overwhelmingly workers of color, the jobs were not a part-time gig, but rather a full-time occupation on which they were unable to survive, long a complaint of the low-wage workers who have campaigned for a uniform minimum wage. “I did struggle,” said One Fair Wage organizer Nataki Rhodes, who worked for fifteen years as a tipped worker. “My tips were never brought up to my wages.”
“They’ve been lied to,” Rhodes says of those workers who back the subminimum wage. Rhodes is thankful to the Johnson administration, she says, for finally passing what she and other low-wage workers have been fighting for since 2013, only to be treated as bargaining chips by successive administrations. “It’s the first time workers truly had a seat at the table,” she said.
As opponents painted an apocalyptic picture of a city riddled with boarded-up storefronts, of businesses fleeing en masse to the suburbs, and — most horrifying of all — back-of-house staff and other low-wage laborers seeing wage gains, too, supporters of the ordinance had arrayed a number of witnesses to push back on the idea that the sky would fall.
Some business owners spoke in favor of the measure. Representing Back of the Yards Coffee and the yet-to-open Lemon, these employers said they already paid their tipped workers a livable wage and complained about being undercut by low-wage restaurants.
Robin Wonsley, a socialist city council member in Minneapolis who hails from the south side of Chicago, attended the hearing as an expert witness, strenuously denying what she called doomsday predictions based on the experience of Minnesota. The state has been a One Fair Wage state since 1984.
“Every city should take this as a mandate to do the same,” she told those gathered at the press conference after the successful vote.
Wonsley, who explained that the Chicago One Fair Wage campaign consulted with those involved in Minneapolis’ victorious $15 minimum wage push (which finally became law in 2017), says the talking points mobilized against the ordinance were ripped straight from the misinformation campaigns against higher wages that she witnessed in the North Star State.
“It really felt like deja vu,” she says. “Y’all really use the same fear tactics that have already been debunked.”
In the end none of it was enough to derail the ordinance, which eventually sailed through the vote after alderperson after alderperson spoke out in support. “Some of those who take money from the restaurant industry voted with us,” says Rosa.
For the Johnson administration and its allies, the ordinance is not just viewed as a major redistributive policy and a potential signature accomplishment, but a stepping stone toward enacting the rest of the mayor’s ambitious agenda. The political capital accumulated during this victory, they hope, will roll over into the potentially far more contentious battle over the mayor’s Bring Chicago Home proposal, which seeks to pour $160 million a year into the fight against homelessness by raising taxes on real estate sales worth more than $1 million, while slashing them on sales that go for less.
Ending the Subminimum Wage
Though thought of today as an immutable and uniquely American practice, tipping didn’t originate in the United States, nor has it always been uncontroversial.
Emerging during Reconstruction as employers in the hospitality sector sought to underpay former slaves, tipping was widely criticized at the time as un-American and anti-egalitarian. Chicago was central to this history: It was the Pullman Company that became the poster child for the exploitative nature of the tipped wage, paying black porters and dining car workers a pittance and forcing them to earn most of their income from passenger tips.
The practice was first codified in 1938 through the New Deal’s minimum wage legislation, which set a wage floor for workers, but excluded restaurant, hospitality, and other tipped employees. Though a tipped minimum wage was created in 1966, it has stayed at a measly $2.13 for the past thirty-two years, a wage rate that sixteen states still maintain, with another thirteen at less than $5 an hour.
“The thing that started in Chicago is about to end here,” she declared at Wednesday’s press conference.
Branko Marcetic is a Jacobin staff writer and the author of Yesterday’s Man: The Case Against Joe Biden. He lives in Chicago, Illinois.
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