Stiffed again: Mayor’s minimum wage plan slights tipped workers

A special commission convened by Mayor Rahm Emanuel recommended raising Chicago's tipped minimum wage by one dollar over the state rate, which is currently $4.95 an hour. [Photo illustration by Irina Schmidt, Shutterstock]

A special commission convened by Mayor Rahm Emanuel recommended raising Chicago's tipped minimum wage by one dollar over the state rate, which is currently $4.95 an hour. [Photo illustration by Irina Schmidt, Shutterstock]

Fast food and retail workers — those who’ve campaigned for two years for a $15-an-hour minimum wage — weren’t the only ones expressing dissatisfaction with Mayor Emanuel’s proposed halfway measure on the issue.

Restaurant workers, a huge group in a fast-growing industry, say they and other tipped workers got an even worse deal.

Reacting to Emanuel’s endorsement of a mayoral commission’s recommendation to raise Chicago’s minimum wage to $13 an hour by 2018, Nazly Damasio of the Workers Organizing Committee of Chicago said, “Workers can’t wait four more years; they need a living wage now.”

The group plans to continue taking its demand directly to corporations. “We’re not going to wait any more for politicians to hand out these mediocre results,” she said.

By 2018, a fulltime $13-an-hour job will get you an annual income that’s just a couple hundred dollars above the federal poverty level, pointed out Aileen Kelleher of Action Now, an organizer of the Raise Chicago coalition.

She added that Emanuel’s proposal treats large corporations and small businesses identically. An ordinance introduced in May and backed by Raise Chicago would require corporations with annual revenues over $50 million to institute a $15 hourly wage within 14 months, while giving small businesses five years to ramp up their wages.

“It doesn’t seem that Emanuel and his commission are taking into account the billion-dollar profits these corporations are making while their workers are living in poverty,” she said.

The Emanuel commission’s proposal would raise the tipped minimum wage by one dollar over the state rate, which is currently $4.95 an hour. That’s not enough, said Astar Herndon, policy director of the Restaurant Opportunities Center of Chicago, which organizes restaurant workers.

ROC is advocating strenuously for eliminating the tipped minimum wage, she said. Seven states, including Minnesota, Washington, and California, have done so. Those states have seen above average growth in restaurant sales and employment, according to ROC.

Under the tipped minimum wage — which also covers workers in casinos, car washes, hair salons, and other businesses — employers are supposed to make up the difference if total income including tips falls short of the standard minimum wage. But that requirement is administered erratically and difficult to enforce, said Herndon.

A 2010 study by the Center for Urban Economic Development at UIC found that 15 percent of tipped workers reported they were not even paid the lower tipped minimum wage. Wage theft is particularly common in the car wash industry. Among restaurant and hotel workers, 22 percent reported minimum wage violations and 70 percent reported not being paid for overtime.

In any case, it defeats the purpose of the custom of leaving gratuities — which are supposed to be “something given voluntarily or beyond obligation,” according to the dictionary — if tips are counted against what an employer owes a worker. The system leaves restaurant workers — two-thirds of them women, one-third of them mothers — nearly three times as likely to live below the poverty level compared to other workers.

In Illinois, the median hourly income for waitstaff is just $9.06 an hour, or about $18,000 a year — in the unlikely event that a worker gets 40 hours a week all year. “That’s not enough to live on,” said Herndon. And it means half of restaurant servers make less than $9 an hour.

Waitstaff in high-end restaurants, which account for less than a quarter of the industry, make about $16 an hour, Herndon said — better, but still not what’s considered a living wage in Chicago.

Antonia Nikolova, a restaurant server for seven years and a ROC activist, said she has had many “slow days when I leave with $15 in my pocket after an eight-hour shift.” She recalled working one Christmas Eve when she made $5.

With “the personal investment of energy and effort” required by serving, the job should pay more than minimum wage, she said. In the tipped-minimum system, “the employer says you’re not worthy as an employee and I will pay you as little as I can.”

Worse than that, tip-based compensation fosters a work environment in which sexual harassment is endemic, she said.

“There have been many occasions where I gave my best service and haven’t gotten tips” because she wasn’t responsive to personal inquiries, including invitations on dates. “If I want to keep my personal boundaries, then I don’t get tips,” she said. “I would definitely define that as sexual harassment.”

Herndon said a few restaurants around the country have begun banning tips and paying servers significantly higher than the minimum wage — proving that a far less exploitative model can work in the business world. ROC lists 10 Illinois restaurants, most of them in Chicago, among a hundred nationally with “sustainable business practices” including living wages and employee benefits.

If local lawmakers won’t eliminate the tipped minimum wage, they should consider increasing it to 70 or 80 percent of the standard minimum. Under Emanuel’s proposal, however, the tipped minimum in the city could actually end up as a smaller proportion of the minimum wage than at the state level.

That means 65,000 tipped workers in Chicago restaurants — and many thousands more in other industries — would be left behind.

[Photo illustration by Irina Schmidt, Shutterstock]

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