(The Center Square) – As the calls for raising the tipped minimum wage grow louder in Illinois, a new study reveals raising the tipped minimum wage has a significant negative impact on state tip percentages in full-service restaurants.
A new proposal would give restaurants two years to have all tipped workers increased to Chicago’s minimum wage, which is $15.80 an hour, plus any tips they earn. Tipped workers currently make $9 an hour plus tips, but employers are required to make up the difference if the combined amount of hourly pay and tips does not equal the full minimum wage.
Chicago Mayor Brandon Johnson has endorsed the One Fair Wage movement, saying workers who earn the so-called tipped minimum wage are more vulnerable to sexual harassment and abuse than other employees.
“This is about investing in people, Black women, brown women, heads of households, because by investing in people we strengthen the backbone of our economy,” Johnson said.
Rebekah Paxton, director of research at the nonprofit Employment Policies Institute, said one-flat-wage states see lower tips and some workers will most likely lose their jobs.
“American economists across the board agree that if you raise the minimum wage, jobs suffer, because obviously that raises labor costs for any business,” Paxton said.
The Illinois Restaurant Association has gone on record opposing the idea, saying it will reduce the workforce in bars and restaurants.
Paxton said there has been pushback from tipped restaurant employees, including servers and bartenders, who say it would result in lower tip income.
“They don’t want this to be changed because essentially it turns it into a flat wage job,” said Paxton. “A lot of people are attracted to the hospitality and restaurant industry because they can make tips and interact with customers, so a lot of servers are pretty opposed to this.”
The research shows that six out of seven states that have eliminated their tip credit are in the bottom half of all state tipping percentages.
The statewide minimum wage in Illinois increased to $13 on Jan. 1, and will increase to $14 Jan. 1, 2024. Tipped workers get 60% of the state’s minimum wage or $7.80 per hour for workers age 18 and older. A proposal to bring a minimum wage for tipped workers statewide never advanced at the Illinois Statehouse.
