New tipped minimum wage draws mixed predictions

Chicago's minimum wage for tipped workers jumps today from $9.48 to $11.02 per hour.

Why it matters: It's the first tangible benefit of the One Fair Wage ordinance, which was passed last year to close the pay gap between tipped and non-tipped workers.

• The regular minimum wage jumps to $16.20.

Yes, but: The new rule is causing concern among some restaurant owners and confusion among consumers.

How it works: Each year the city's tipped minimum wage will grow by 8% until it matches the regular minimum wage in five years.

• Currently if workers' wages plus tips don't bring them to the regular minimum wage of $16.20 their employer must make up the difference.

What they're saying: "This is fantastic," One Fair Wage campaign president Saru Jayaraman tells Axios.

• "Square [payroll system] data shows that over 60% of Chicago restaurants have actually already moved to paying the full minimum wage and they're doing fine," she said.

The other side: Illinois Restaurant Association CEO Sam Toia tells Axios he's concerned the move will lead some diners to tip less and "lower the take-home pay for hardworking employees."

• He says local restaurateurs worry the wage hike will force them to "increase the costs on consumers," and possibly "put thousands of workers at risk of losing their jobs."

Zoom out: Roughly a year after a similar wage-boosting policy kicked off in Washington, D.C., the district has lost 925 full-service restaurant jobs, federal data shows .

• Yes but: D.C. restaurants gained 540 jobs from April to May this year.

The upshot: As the new wage rules come into effect, consumers may be left wondering how they should now tip.

• "We encourage customers to continue tipping based on the quality of service from skilled professionals," OFW says.
• And the restaurant association agrees with them.

What's next: State Rep. Lisa Hernandez (D-Cicero) says she will tweak and reintroduce a bill that failed in the last session to raise the tipped minimum wage to $15 across the entire state.