Chicago Mayor Johnson vetoes pause to subminimum wage hike for tipped workers

CHICAGO - Mayor Brandon Johnson on Wednesday vetoed a City Council measure to reverse the phasing out of the subminimum wage for tipped workers.

Johnson's veto potentially sets up another contentious vote in City Council to override his move. The City Council needs at least a two-thirds majority, or 34 votes, to override a mayoral veto.

Last week's vote to keep the subminimum wage passed 30-18.

"The way I see it is, that they are opposing working people in Chicago, right?" Johnson said. "This is really about us keeping our commitment to working people and I’m gonna keep my commitment to them."

He added that the effort to stop the increase of wages for tipped workers is "not only tone-deaf and short sighted, I quite frankly would call it immoral, because that’s exactly what it is."

The backstory:

At last week’s City Council meeting, a majority of aldermen voted to essentially maintain the subminimum wage, which was in the process of being phased out by legislation passed back in 2023.

As of this year, tipped workers made an hourly wage that was 76% of the city’s standard hourly wage of $16.60, or about $12.62 per hour. That percentage was going to increase every year until it matched the standard hourly wage.

When the gradual increase was initially passed, the subminimum wage was only at 60% of the standard minimum wage. The 2023 ordinance called for a match of 100% of the regular minium wage on July 1, 2028.

Johnson and his progressive allies have argued against the move. 

Raise the Floor Alliance, a Chicago nonprofit that advocates for lower-wage workers, argued in a news release that keeping the subminimum wage "sets a dangerous precedent that when labor groups come to the table and make good-faith compromises with business groups—including a gradual phase-out plan—corporate interests will take advantage and renege on their word."

The mayor’s office has also pointed out that tipped workers are disproportionately women, Black, and Latino, so they would benefit from a higher minimum wage.

The other side:

But restaurant and bar owners and other advocates from the city’s business sector argued that increasing the subminimum wage was hurting their bottom lines and forcing them to raise prices and reduce hours for their workers to accommodate the added costs.

Sam Toia, president of the Illinois Restaurant Association, has argued that no tipped workers actually make less than the minimum wage by law. If a tipped worker does not make enough in tips to make the city’s hourly minimum wage, their employer is required to make up the difference.

Over the weekend, Toia told Fox Chicago that if the mayor vetoes the City Council’s change to the law, that will result in "less jobs and less opportunities" for businesses in Chicago.

Rebekah Paxton, the research director at the Employment Policies Institute, a Virginia-based nonprofit that studies public policy issues, argued that the mayor's veto ignores economic data that shows eliminating the tip credit actually hurts wages and leads to restaurant closures and layoffs.

"Mayor Johnson is doubling down on a policy that has been shown to backfire on workers and the local restaurants that they work for. Economic data in Chicago already shows this is hurting the city's restaurant industry less than two years in. It's time for the city to stand with local workers and businesses and scrap this disastrous policy," she said in a statement.

What's next:

The next full City Council meeting is scheduled for April 15.