The City Council’s vote last Friday to increase the base pay for restaurant servers, bartenders and other tipped employees to Chicago’s minimum wage could help thousands of those workers avoid poverty, according to a WBEZ analysis of census data.
The move calls for gradually increasing, over the next five years, the current $9.48 per hour base pay for tipped workers in the city to the citywide minimum wage of $15.80 an hour. Essentially, it amounts to 8% annual raises in base pay taking effect on July 1 each year from 2024 through 2028. In addition, the citywide minimum wage also is adjusted annually based on the cost of living.
To gain a snapshot of some of the region’s tipped workers and to get a sense of how the measure might impact those among them who work in the city, WBEZ analyzed data on wages and other variables from the U.S. Census Bureau 2021 American Community Survey prepared by the University of Minnesota. The numbers are the most recent data we could find that allows us to zoom in close enough to get a glance at tipped workers.
We focused the analysis on two occupations that routinely get tips: bartenders and wait staff. We analyzed the data to determine how much they earned and how often they worked. We also reviewed data to learn other details, including their age, gender, race, ethnicity, education and health insurance coverage.
The data show that earning at least $15 an hour dramatically improved their chances of staying above the federal poverty line, which in 2021 was an annual income of about $13,000 for an individual or $26,500 for a family of four.
More than half of the estimated 85,000 bartenders, waiters and waitresses in metro Chicago earned less than $15 an hour before tips, according to the analysis. The poverty rate for those workers was 24%, compared to just 10% for bartenders and wait staff who earned $15 an hour or more in base pay.
Working longer hours also helped them avoid poverty. Even among those who earned less than $15 an hour, the rate of poverty was significantly less for individuals who worked at least 40 hours a week than it was for those who worked less than 40 hours weekly — about 16% and roughly 27%, respectively. However, just 23% of bartenders, waiters and waitresses reported working at least 40 hours a week, according to the analysis.
More than 70% of the tipped workers we examined were women. Overall, men and women working as bartenders or wait staff were experiencing poverty at similar rates, about 21%. However, poverty rates were much higher for women householders, particularly those with children. About a third of female householders without children were in poverty, and the poverty rate was more than 40% for women leading households with children, the analysis shows.
Bartenders and wait staff were not the only workers in bars and restaurants struggling to earn a living wage or to work enough hours to help make ends meet.
In the data we examined, bartenders, waiters and waitresses were just a few of the jobs classified as food preparation and serving occupations. The group also included chefs, cooks, dishwashers, food prep workers, hosts, hostesses and others.
Collectively, food preparation and serving workers were the most likely of all occupation groups to earn less than $15 an hour or to work fewer than 40 hours a week, according to the WBEZ analysis.
Among an estimated 300,000 food preparation and serving workers in metro Chicago, about 65% earned less than $15 an hour and 69% worked less than 40 hours per week.
Alden Loury is the data projects editor for WBEZ. Follow him at @AldenLoury.