Chicago Approves Minimum Wage Hike, Hospitality Industry Reacts

Chicagos lakefront

The Windy City just got a lot windier for the hospitality industry, as the Chicago City Council yesterday passed a new ordinance that will raise the minimum wage for Chicago workers to $10 per hour within seven months, $11 per hour by 2017, and, finally, $13 per hour by 2019.

Sponsored by Mayor Rahm Emanuel, the measure is projected to increase the earnings for approximately 410,000 Chicago workers, inject $860 million into the local economy, and lift 70,000 workers out of poverty.

"A higher minimum wage ensures that nobody who works in the City of Chicago will ever struggle to reach the middle class or be forced to raise their child in poverty," Emanuel said in a statement. "Today, Chicago has shown that our city is behind a fair working wage."

The hospitality industry, which opposes the measure, isn't so certain of its merits.

"A $13-an-hour starting wage may be well-intentioned but it would harm Chicago's vibrant hospitality industry, including its restaurant, tourism, and convention business," said Scott DeFife, executive vice president of policy and government affairs for the National Restaurant Association (NRA).

This week, the NRA co-published a study with the American Hotel & Lodging Association (AH&LA), showing that a $13 minimum wage would eliminate more than 11,600 jobs.

"Study after study has shown the negative effects of increasing the minimum wage too high and too fast," said Brian Crawford, vice president of government and political affairs for AH&LA. "Ultimately, these wage increases hurt those who they are intended to help. As an industry, our sector has been the bright spot in the economy, but these kinds of wage increases will hamper our industry's ability to offer good jobs with benefits to those seeking an opportunity and a path to a lifelong career."

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