Gale Street Inn, a long-standing Jefferson Park restaurant, closed its doors for the last time in late June after 62 years of operation.
This closure has ignited a heated discussion among critics of Mayor Brandon Johnson, who argue that the city’s move to eliminate the tipped minimum wage will have detrimental effects on the restaurant industry.
In coverage by the Tribune, Sam Toia, CEO of the Illinois Restaurant Association, echoed concerns about rising operational costs contributing to more restaurant closures.
Following this, the Tribune’s editorial board published an article titled, “Why Chicago Has a Restaurant Crisis,” warning that many more establishments may face similar fates.
A piece in the Sun-Times also highlighted fears of an impending restaurant crisis, coinciding with One Fair Wage’s efforts in the state legislature to abolish the tipped minimum wage throughout Illinois.
One Fair Wage co-founder Saru Jayaraman remains steadfast in her commitment to abolishing tipped wages, viewing the current situation as part of a broader inequity issue in the restaurant world.
According to Jayaraman, if the tipped minimum wage is phased out in New York, momentum could spark similar changes throughout the Northeast.
In Chicago, the City Council agreed in 2023 to phase out the tipped minimum wage over five years, with annual increases of 8 percent set to commence every July until 2028.
This year’s adjustments raised the tipped minimum wage for employers with four or more employees to $12.62 per hour, while the standard minimum wage increased to $16.60 per hour.
Yet the situation remains contentious, with critics questioning whether the changes will actually benefit tipped workers.
As inflation rises, some argue that it could result in lower tips from customers, prompting discussions around alternative compensation methods such as service fees.
This ongoing discourse raises anxieties for independent restaurant owners, who often operate without the backing of wealthy investors.
Notably, even Thattu, which has been recognized for its no-tipping policy, has opted to reinstate tipping to sustain its workforce.
The struggles of independent restaurants resonate nationwide, prompting political figures like New York mayoral candidate Zohran Mamdani to pledge support for small businesses.
The uncertainty permeates the restaurant sector, with many workers and owners confused about the legalities surrounding tip pooling and sharing among staff.
Neela Caicedo-Rosario from One Fair Wage clarified that sharing tips among front and back of house staff is legally permissible.
As both the restaurant lobby and One Fair Wage provide data to support their positions, Chicago residents have witnessed a flood of information and statistics.
The restaurant association and One Fair Wage have both monitored developments in Washington, D.C., where a similar phased elimination of the tipped minimum wage was introduced, yet has since encountered setbacks.
A Washington Post editorial labeled the move in D.C. a “disaster,” paralleling the concerns voiced by the Tribune in Chicago.
Mayor Johnson, who prioritized the elimination of the tipped minimum wage during his campaign, aims to empower workers through this ordinance.
While proponents assert that approximately 10,000 jobs were created after the ordinance went into effect in July 2024, the restaurant lobby points to a loss of 5,200 jobs between July and December 2024.
Discrepancies also exist around the number of restaurant openings and closures, as well as the impact on the city’s sales tax revenue.
During a recent press conference alongside One Fair Wage, Johnson praised the ordinance stating, “There is no place for an antiquated system such as this, particularly in a great global city.
And so the One Fair Wage became a matter of justice, economic justice.”
Ald. Jesse Fuentes, an ally of Johnson’s, played a pivotal role in mediating between the mayor’s office and the Illinois Restaurant Association, facilitating discussions with various stakeholders.
“Some individuals are going to do the minimum wage and keep tips, some individuals are going to do the minimum wage and have a service charge, so the service charge goes to the front of the house and the back of the house,” Fuentes explained, emphasizing the variety of models in the industry.
As Chicago approaches the second year of the wage increase ordinance, debates surrounding the future of the restaurant industry are expected to become a recurring theme each summer.
“We are a diverse city with many different forms of business models,” Fuentes stated.
“No restaurant is the same — it’s not a monolithic industry, right?
And so that means there’s going to be different challenges depending on the business model, and we have to target one sort of restaurant at a time.”
image source from：chicago
