CHICAGO (WBBM NEWSRADIO) — Advocates have said they are getting closer in their efforts to get Chicago to eliminate the subminimum wage, which allows restaurant owners and other businesses to pay their employees who also earn tips less than the minimum wage.
Sam Toia, president of the Illinois Restaurant Association, said on WBBM’s “At Issue” program over the weekend that he’s not convinced this would be a good change for the industry. Toia argued that forcing restaurant owners to pay their waitstaff at least the full minimum wage, plus tips, would drive many smaller places out of business.
“Restaurants run on a very tight margin,” he said. “$0.95 – $0.97 of every dollar that comes into a restaurant, goes out for labor costs.”
But Saru Jayaraman, who leads the group One Fair Wage, said seven states have abolished the subminimum wage. She said the industry’s doing fine in those places.
“These states have, actually, higher restaurant sales per capita, higher job growth in the restaurant industry, higher small business restaurant growth rates than Illinois, higher tipping averages than Chicago and Illinois, and one-half the rate of sexual harassment in the restaurant industry because, as it turns out, when you pay a woman a full minimum wage, she doesn’t have to put up with as much from customers,” Jayaraman said.
When the total pay for a tipped worker doesn’t meet the minimum wage, Toia said restaurants are required by law to make up the difference so their employees get at least the minimum wage — though he admitted some might not.
Shortchanged workers, he said, should report their employers to Business Affairs and Consumer Protection. Even then, Toia acknowledged that some employees might be reluctant to report their employer for fear of losing the job they have.
“We don’t think it is a good idea to eliminate the tipped credit, but we are pragmatic — and we are listening,” he said.
Still, Jayaraman said the lack of compliance with credit tip law is only one reason why 1.2 million workers have left the industry since the pandemic:
“When they were asked to enforce COVID protocols on the same people from whom they had to get tips, they started leaving en masse,” she said. “Of those who remain … more than half say they’re leaving, and 80% say, ‘The only thing that would make me come back to this industry is a full, livable wage with tips on top.’”
Jayaraman said she believes the restaurant worker shortage will give them the leverage they need to finally get the pay increased.
The debate over the subminimum wage was the topic on this weekend’s “At Issue” program, which will air once more Sunday evening at 9:30.