Earlier this week, anti-tip credit activists at One Fair Wage rallied with Chicago Mayor Brandon Johnson to claim the city’s tip credit elimination law has been nothing but positive for the Windy City.
Yet their claims – and report to match – use flawed and incomplete data to make that case.
In reality, the available data shows the implementation of the city’s tip credit elimination law in July 2024 has caused remarkable declines in the city’s restaurants and bars and their employees.
Chicago’s own licensing data debunks One Fair Wage’s claims about restaurant establishments
In its report calling Chicago’s tip credit elimination law “a success story,” One Fair Wage cites “information sent” by the city to claim the number of restaurants has increased under the law. It claims since there are hundreds of “retail food establishment licenses” issued and renewed after July 1, 2024, the industry must be growing.
This is a misleading statement for several reasons. Chicago’s Department of Business Affairs and Consumer Protection publishes business license data online, updated in real time.
Most importantly, the “retail food establishment” license can go to any establishment serving food, which includes university bookstores, convenience stores, fast food restaurants, gas stations, and other establishments that are not subject to the tip credit.
Additionally, Chicago’s data bureau issues a separate license for taverns that are subject to the city’s tip credit elimination law. One Fair Wage does not indicate it counted these in its report.
In the pre-tip credit elimination law period (July 2023 to June 2024), the data bureau shows 1,124 newly retail food and tavern licenses issued – dropping to 1,031 in the post-law period (July 2024 to June 2025). Contrary to the Mayor’s rosy claims, this represents a 8.3% drop in the post-tip credit elimination law period.
Even more concerning, the number of renewals also dropped. In the pre-tip credit elimination law period (July 2023 to June 2024), BACP shows 5,261 renewed retail food and tavern licenses issued – dropping to 5,237 in the post-law period (July 2024 to June 2025).
This is likely a conservative estimate of loss effect because the dataset includes a large share of businesses that are not subject to the tip credit elimination law.
Chicago restaurant and bar employment has fallen after tip credit elimination began
The only available employment data provided by the Bureau of Labor Statistics and Federal Reserve Bank of St. Louis shows that the Chicago-Naperville metropolitan area has lost jobs since the tip credit elimination law went into effect on July 1, 2024 through the end of the year. Meanwhile over the same time frame, statewide industry employment grew.
In the same period last year, before the law went into effect, Chicago’s restaurant and bar industry appeared more resilient than the industry statewide. This indicates the implementation of the tip credit elimination law caused a unique decline in the city.
Looking at monthly employment growth, the beginning of the tip credit elimination law in July 2024 marks Chicago’s declining restaurant and bar employment as a significant departure from statewide trends. Before the tip credit elimination law went into effect, Chicago restaurant and bar employment generally mirrored statewide trends. Yet following July 2024, Chicago’s restaurant and bar employment declined while the state’s industry employment grew.
One Fair Wage obscures the dismal tip credit elimination effects on DC
Washington DC, which One Fair Wage is using to prop up the “success” of their tip credit elimination platform, is currently moving forward on Mayor Muriel Bowser’s calls to repeal the city’s tip credit elimination law (Initiative 82) and has paused an upcoming July 1 tipped wage hike.
In her proposal to repeal the tip credit elimination law, the mayor cited losses for restaurants and tipped workers. Chicago lawmakers should measure the impacts of its tip credit elimination law on restaurants and employees actually affected by it, and heed the disaster currently playing out in the nation’s capital.