STATEMENT: Senate Proposal to Cost Illinois Thousands of Tipped Restaurant Jobs
Publication Date: February 2023
State senators have introduced SB 293, which would eliminate the state’s tip credit that allows restaurant service employees to count tips toward the minimum wage requirement. The tip credit system not only allows servers and bartenders to earn well above the standard minimum wage through their tips, but has been championed by employees themselves across the country. At the federal and state level, bipartisan coalitions of legislators have opposed harmful changes to the tipped minimum wage.
Analysis by economists at Miami and Trinity Universities shows SB 293 would cost thousands of tipped restaurant employees their jobs and millions in earnings. According to analysis by the Employment Policies Institute, the bill would:
Cost the state 7,730 tipped restaurant jobs.
Cost Illinois’ tipped workers $20.7 million in earnings in total, including roughly $1,815 in annual earnings losses for the lowest-earning decile of tipped workers in the state.
Most economists agree that tipped minimum wage hikes will reduce the number of tipped job opportunities available.
In addition to the analysis on Illinois’ proposal, EPI has released a detailed brief debunking common myths about the tipped wage.
Rebekah Paxton, Research Director at the Employment Policies Institute, released the following statement:
“Activists such as One Fair Wage claim to act on behalf of restaurant workers, but continue to push policies that damage workers’ livelihoods in a uniquely lucrative and flexible position. Economic research shows tip credit elimination would cost thousands of tipped restaurant jobs and reduce earnings for Illinois tipped workers by more than $20 million.”