People mostly choose restaurants based on obvious factors, like the quality of the food, the quality of the service and the prices. As restaurant owners, we see this firsthand every day. Atmosphere, location and parking availability may be lesser factors, but the price and the quality of the food and service matter most.
As the Chicago City Council considers eliminating the law allowing tip-based businesses to factor tips into overall wages, let’s keep these things in mind. If Chicago makes the wrong move, restaurants will close, worker earnings will significantly decline and the quality of service will suffer. Restaurant and bar owners, workers, customers and the city will all lose.
Restaurant industry economics are notoriously fragile. While the small percentage of high-end restaurants have higher margins, most restaurants are like ours: small, family-owned operations with single-digit margins. We support families and a few dozen employees: teenagers getting their first job, 20-somethings serving beers and mixing drinks, and plenty of moms and dads who are also supporting loved ones.
Today in Illinois, the median wage of a bartender or server is about $28 per hour with tips. In our restaurants, servers often earn $45 to $50 an hour. Even the lowest earners in the restaurant business get at least the $15 minimum wage because the law requires owners to make up the difference if tips fall short.
Eliminating tipped wages means the guaranteed, hourly wage for restaurant...
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