Chicago’s City Council is set to increase the minimum wage to $15 by 2021.
The “sub-minimum” wage is set to increase by $2 to hit $8.40 per hour, while the minimum wage will rise to $14 an hour in 2020, then see another $1 increase the following year.
The sub-minimum wage has been the cause of much debate over the previous months within Chicago’s hospitality industry. While it was first encouraged to lift the wage from $6.40 hourly straight to $13, the proposal was rejected and tip credit has been preserved for those who work on the restaurant floor rather than the kitchens.
A hearing held in September considered raising the wage to make up for the $6.60 pay gap in tips, with the Restaurant Opportunities Center and lobbyists from the Illinois Restaurant Association gathered at City Hall to listen to the debate.
It was decided that restaurant owners would be able to continue making up the difference between their staff’s base pay and standard minimum wage through the tips workers receive.
While the largest eateries celebrated the announcement of the Banchet nominees for 2019, smaller restaurant owners worried over escalating workforce costs thanks to the threat of new wage rules. The jump to $15 was considered to be too high for smaller establishments who would have had no choice but to adhere to the new rules, while fast-food chains would have been in a better financial position to adapt more quickly.
The new plan, approved last week, will ensure the sub-minimum wage rises at 60% of the standard minimum wage, which is the state’s current threshold. The sub-minimum wage is also set to rise annually alongside the rate of inflation, squashing arguments that workers were struggling to keep up with the cost of living.
The minimum wage will most likely hit $15 in 2025, meaning the minimum wage for tipped workers will be $4.65 an hour.
Washington DC passed the DC initiative 77 back in June 2018 which raised the city’s minimum wage to $15 an hour and phased out the sub-minimum wage for workers. Springfield lawmakers also agreed to the rise but will phase it out until 2025.
Most recently, Denver lawmakers approved a measure to increase the minimum wage to $15.87 by 2021. California’s minimum wage will hit $15 by January 2022.
The Federal minimum wage of $7.25 an hour hasn’t changed since 2009 despite the huge increase in living costs across the US. A person working full time on the wage would currently make around $15,000 a year, leaving a family of two or more with no additional income well below the federal poverty level of $16,910.
Finally, in July 2019, the U.S House of Representatives passed a bill that would gradually raise the federal minimum from $7.25 to $15 per hour by 2025.
However, the nonpartisan Congressional Budget Office estimated that 1.3 million Americans could lose their jobs if a wage hike were enacted, despite moving 1.3 million Americans above the poverty line.
Others disagree and have the studies to prove it. As quoted by Yahoo Finance, Anna Godoey, an author of a 2019 study by UC Berkeley’s Center on Wage and Employment Dynamics, said, “The results of our research show that we can raise pay to $15, even in low-cost states.”
“The data show that the minimum wage has positive effects,” she continued, “especially in areas where the highest proportion of workers received minimum wage increases. We also found reduced household and child poverty in such counties.”