$15 Minimum Wage Goes Into Effect In Chicago Thursday And Could Mean Price Hikes; Study On Tipped Wages Also Getting Under Way
CHICAGO (CBS) -- This could be a big story affecting your money, especially if you go out to eat.
Chicago's new minimum wage hike to $15 per hour officially goes into effect this coming Thursday, and it could mean higher prices at your favorite restaurants.
As CBS 2's Tara Molina reported Tuesday, even workers who earn tips will be making more too.
Chicago is four years ahead of the Illinois state mandate for a $15 minimum wage by 2025. And some restaurant owners are already ahead of the changes coming Thursday, with hopes for even more soon.
New Wage Information From The City Of Chicago
At Jeff & Judes Jewish deli, 1024 N. Western Ave., you'll get more than your basic pastrami sandwich. Every part and piece is cured, smoked, and baked in-house by people trained to put the very best on your plate.
"All of that is really like important methodical work," said deli owner Ursula Siker.
And that is why Siker already starts all of her staff at $15 an hour - ahead of the city's official minimum wage change.
"Something that I could control was making sure that my front-of-house and back-of-house were all making a living wage, and part of that is to give a higher pay across the board," Siker said.
Starting Thursday, the minimum wage in Chicago is $15 an hour and the minimum wage for workers who get tips is $9 – with the pay for overtime and youth workers going up too.
But coming off a pandemic that took a bite out of the hospitality industry - an industry still affected by staffing issues and food costs - owners in the city say Thursday could result in more changes for customers in the form of higher prices.
At Jeff & Judes, they have been forced to change their prices because of rising costs.
"We used to get a case of chicken thighs for $30, and it's now over $70," Siker said.
Siker said the need for a price hike is something Jeff & Judes is transparent about with its customers.
The more controversial conversation happening right now surrounds eliminating the tipped wage entirely. Some Chicago restaurants have already done away with tipping, with the city set to study the effect of tipped wages since 2019.
Siker told us for now, Jeff & Judes still relies on tips as an addition to their set wages, but she hopes that's the next change we see.
"Moving forward, how we can continue more of this legislation to go into effect where we can have no just a higher wage, but actually the benefits and the things that are taken out from our wages to really round out an easier, healthier lifestyle for people who work really hard every day," Siker said.
The city delayed its study on the economic impact of tipped wages because of the pandemic. Molina is told that study will start this Thursday too, and stay in place until next year. The order for the study from the Department of Business Affairs and Consumer Protection reads:
"The Commissioner of Business Affairs and Consumer Protection shall conduct a one-year study, covering the period from July 1, 2021, to July 1, 2022, that examines the economic impact of tipped wages and the effectiveness of current enforcement.
"The study will examine the economic impact of tipped wages (i.e. what is the ultimate take-home pay for tipped workers, how many tipped workers are there, what industries, how often do employers need to make up the difference) and the effectiveness of current enforcement."
BACP noted that this ordinance references the city's study of tipped wages and the changes dates for that study on page 22.
We asked the city about what changes could we see when that study wraps – including the possibility of whether we might eventually see the special wage for those who get tips go away. We were only told the goal is, again, to understand the impact and effectiveness of tipped wages here.
Right now, we are told if tips don't bring a workers pay to $15 an hour, the business needs to make up the difference.
