As Chicago considers a proposal to raise the minimum wage to $15 an hour by 2021, a new study shows that black female workers in tipped positions in the city struggle to make ends meet.
One Fair Wage, a New York-based nonprofit that advocates for ending the subminimum wage, the lower wage that tipped workers collect, released a report on Thursday that found more than 27% of black workers in Chicago’s dining industry were living in poverty, compared to about 18% of white workers in the same occupation.
One Fair Wage commissioned the report, which was conducted with University of California, Berkeley and the Restaurant Opportunities Centers United, a nonprofit organization that works to improve wages and working conditions for restaurant workers.
Saru Jayaraman, president of One Fair Wage and a professor at Berkeley’s Goldman School of Public Policy, said people of color in Chicago are disproportionately affected by the subminimum wage. Workers aren’t able to pay for expenses due to the unreliability of tips and are pushed to use food stamps, Jayaraman said.
Over the summer, South Side Ald. Sophia King proposed an ordinance that would increase the minimum wage to $15 by 2021. The legislation also calls for eliminating the subminimum wage.
Currently, tipped workers collect a minimum wage of $6.40 an hour, plus additional gratuity they receive.
Jayaraman said Chicago has more tipped workers living in poverty than in other cities she has studied like New York, Los Angeles and Houston.
Jayaraman, who led the research, said more than half of Chicago’s tipped workers are women who are servers and bartenders.
The One Fair Wage study also found that black women in Chicago who are tipped workers accounted for about 49% of all tipped workers accessing Supplemental Nutrition Assistance Program, the federal nutrition program formerly known as food stamps.
A majority of Chicago’s tipped female workers, many of whom are mothers, have jobs in casual restaurants, which often don’t pay as much as fine dining establishments, Jayaraman said.
King said she’s negotiating with the mayor’s office over the subminimum wage provision. She said she does not have a date for when the proposal would be put up for a vote.
Several business trade associations oppose the bill, saying that getting rid of the subminimum wage would change the restaurant industry, which relies heavily on tipped workers.
“The (Illinois Restaurant Association) respects the voices of all sides in the conversation about minimum wage. We continue to oppose an ordinance that will force a 144 percent labor cost increase on employers with tipped employees. As restaurant profit margins are typically 3 to 5 percent, the city of Chicago needs a minimum wage that protects jobs and employees’ hard-earned tips, while keeping costs and prices reasonable for restaurants and diners,” Sam Toia, association president and CEO, said in a statement.
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