Arlington, VA – Your favorite haunt may be in danger after Chicago’s new minimum wage hikes on July 1. 

New data from the Bureau of Labor Statistics (BLS) provides a glimpse into the employment decline that will result from the July 1 wage hikes. 

Some background: last fall, the City Council passed an ordinance that would begin eliminating the city’s tip credit by 2028.

The effects are already starting to surface:

• Chicago lost 358 full-service restaurant employment jobs in the past two months, while Chicago’s total employment rose by nearly 8,500 jobs in the same period. 

• Since the passing of the tip credit elimination bill in October 2023, Chicago has seen a -0.23% decline in industry jobs. During the same period last year, Chicago restaurant employment rose by nearly 4%. 
• The restaurant industry’s employment growth rates have stagnated: while averaging 0.4% increases in monthly employment prior to last fall, since October 2023, average monthly employment growth is negative (-0.1%). 

Below is a quote from EPI’s research director, Rebekah Paxton, on the issue: 

“A storm is looming over the Windy City that will decimate Chicago’s restaurant industry. We are already seeing early signs of distress from the tip credit elimination bill that economists have warned about. Chicago lawmakers should be wary of these consequences before it’s too late.”

More background: A similar tip credit elimination bill passed in Washington, DC in 2022, the effects have been disastrous with workers seeing fewer tips, reduced hours or lost jobs, and many local restaurants shuttered completely. The effects in DC can be used as a cautionary tale as to what Chicago will see down the line. 

A full analysis on the industry’s job market from EPI is available here.