As is typical when it comes to the minimum wage, Democrats in Chicago have managed to create new problems while trying to solve a problem that did not exist.
Chicago has a “restaurant crisis,” according to a Chicago Tribune editorial. The city is in the process of eliminating its tipped minimum wage for restaurant workers and raising their minimum wage to match the rest of the city. The tipped minimum wage just jumped again from $11 an hour to just under $13, and will continue to rise through 2028 until it hits the city’s minimum wage, which just jumped again to $16.60 an hour.
This is adding rising labor costs to Chicago restaurants already dealing with high food costs. Servers, who generally prefer the previous system because they make more in tips than under set wages, are seeing their hours cut. According to the Chicago Tribune, “Most servers of our acquaintance have no interest in being paid a flat hourly wage that discourages tipping; they know that will hurt their earnings.” The paper also noted, “Only restaurants funded by chains and private equity groups are growing in Chicago. For independents, it’s an existential crisis.”
It isn’t a surprise. Other Democratic cities and states have already faced similar reckonings. Massachusetts voters overwhelmingly voted down a ballot initiative last year that would eliminate the tipped minimum wage and require restaurants to pay all employees $15 an hour by 2029. That ballot initiative was also opposed by the state’s Democratic governor and lieutenant governor, as well as state and city leaders who recognized that this would cause most restaurant workers to make less money than they do now.
JOSH HAWLEY’S MINIMUM WAGE MISFIRE
Just last month, the Washington Post had its own editorial detailing how “Eliminating the tipped minimum wage has been a disaster” in Washington, D.C. The city paused its tipped minimum wage hikes after it resulted in restaurants “closing, laying off workers or warning that they are on the verge of financial ruin.” The reality was that it wasn’t making things better for servers either, who the Washington Post notes “now complain that the initiative has resulted in them making less money because many customers now pay less in tips” if they are even eating out in the district anymore at all.
Anyone could have told you that artificially interfering in the labor market would have terrible side effects. Servers, who make more than the minimum wage (sometimes substantially more) through tips, could have told you that this was an unnecessary change. And yet, Democrats in Chicago will continue to push it forward in the coming years.