LINCOLN PARK — A number of neighborhood restaurant owners say the upcoming minimum wage hike that was approved Tuesday could result in higher prices and a switch in their business models.
Ald. Michele Smith (43rd) was one of five aldermen who voted against the wage hike Tuesday, a decision she said was based on feedback from small businesses and restaurants.
"The restaurants and small retail are the lifeblood of the 43rd ward, and when they tell me that their livelihoods are truly threatened, I have to listen," Smith said.
Mason Green, the owner of Bourgeois Pig Cafe, 736 W. Fullerton Ave., said the raising minimum wage comes at a time when his restaurant and coffee house already is struggling since the closure of Children's Memorial Hospital.
"I'm already charging $9 for a sandwich. I can’t be charging $11, $12 for a sandwich," Green said. "No one's going to pay that.”
Green said he is considering switching from counter service to a full-service restaurant so employees would be eligible for the lower minimum wage paid to waitstaff and rely on tips.
Green said most of his 25 employees make $8.25 an hour and the highest-paid employee earns $13 an hour plus a small amount of tips left in the jar at the counter.
He is also considering extending hours and applying for a liquor license to close the gap.
Business at the cafe, which has been open since 1993, has dropped 30 percent over the past three years after the closure of the hospital, Green said.
"I don't know what I am going to do," he said. "I'm talking to other restaurant owners and they say the same thing."
The City Council's vote will gradually raise the minimum wage to $13 an hour over the next five years.
The first jump will come in July, when the minimum wage will become $10 an hour. In July 2015, the raise will become $10.50 and $11 in 2016. In 2017 and 2018 the wage will increase by $1 annually until reaching $13 in July 2019.
The measure, led by Mayor Rahm Emanuel and Ald. Will Burns (4th), was considered to be a compromise between a proposal from Ald. Tom Tunney (44th) to raise the wage to $10.65 and one from the Progressive Reform Caucus to raise it to $15.
Smith laid out her reasoning for voting against the increase in an email to constituents, citing the disparity between Chicago's wage and those of collar counties as one of the main reasons for opposing the increase.
Smith, who is a member of the Committee on Workforce Development, said she wished the city waited to vote until a statewide increase was voted on.
The alderman said she supports a "reasonable increase," such as $10, but said $13 or even $15 was "completely unsustainable" for neighborhood businesses.
Emanuel's administration estimated that the wage hike will affect 400,000 workers, lift 70,000 out of poverty and add $860 million into the local economy.
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