Chicago’s One Fair Wage Ordinance and Its Impact on Sustainable Development Goals
Introduction
On July 1, 2025, Chicago implemented an increase in the minimum wage for restaurant workers, including tipped employees, as part of the One Fair Wage Ordinance. This policy aims to phase out the subminimum wage for tipped workers by 2028, aligning their pay with the city’s standard minimum wage. The ordinance reflects a commitment to social equity and economic justice, aligning with several Sustainable Development Goals (SDGs), particularly SDG 1 (No Poverty), SDG 5 (Gender Equality), and SDG 8 (Decent Work and Economic Growth).
Details of the Wage Increase
- Current minimum wage for non-tipped workers: $16.20 per hour
- Current minimum wage for tipped workers: $11.02 per hour
- New minimum wage effective July 1, 2025:
- Non-tipped workers: $16.60 per hour
- Tipped workers: $12.62 per hour
- Annual 8% increase for tipped workers until 2028, when wages will equalize with non-tipped workers
Significance to Sustainable Development Goals
- SDG 1 – No Poverty: By raising wages for tipped workers, the ordinance aims to reduce poverty levels among service industry employees who often earn below living wages.
- SDG 5 – Gender Equality: The policy supports women and marginalized groups, who constitute a significant portion of the service workforce, by ensuring fair pay and economic empowerment.
- SDG 8 – Decent Work and Economic Growth: The ordinance promotes decent work conditions and fair remuneration, fostering inclusive economic growth within Chicago’s hospitality sector.
Stakeholder Perspectives
Supporters
- Mayor Brandon Johnson emphasized the administration’s commitment to the ordinance as a fulfillment of promises and a moral imperative for Chicago’s residents.
- Richard Rodriguez, National Policy Director for One Fair Wage, highlighted the ordinance’s role in addressing wage disparities affecting immigrants, women, and people of color.
- Advocates argue that some employers previously failed to compensate workers adequately when tips did not meet minimum wage standards.
Opposition and Challenges
- Illinois Restaurant Association CEO Sam Toia contends that tipped workers already earn the minimum wage, with employers making up any shortfall.
- Some restaurant owners report financial strain due to wage increases, leading to price hikes, reduced staff hours, or layoffs.
- Eric Williams of Bronzeville Winery cited an additional $30,000 annual expense due to the wage changes, necessitating operational adjustments such as service charge implementation and staff reductions.
- Concerns have been raised about the potential negative impact on small businesses and service quality.
Broader Context and Future Outlook
- The One Fair Wage movement aims to expand the ordinance statewide to promote equitable wages across Illinois.
- Similar policies have been enacted elsewhere, such as Washington, D.C., though some local leaders have called for repeal due to challenges faced by employees and small businesses.
- Dialogue continues between policymakers, business owners, and workers to balance fair wages with economic sustainability.
Conclusion
Chicago’s One Fair Wage Ordinance represents a significant step toward achieving multiple Sustainable Development Goals by promoting fair wages, reducing poverty, and supporting marginalized workers in the service industry. While the policy faces opposition and operational challenges, it underscores the city’s commitment to inclusive economic growth and social equity.
1. Sustainable Development Goals (SDGs) Addressed or Connected
- SDG 1: No Poverty – The article discusses raising the minimum wage for tipped workers, which directly relates to reducing poverty by increasing income for low-wage workers.
- SDG 5: Gender Equality – The article highlights that immigrants, women, and people of color are the backbone of the service industry and deserve better wages, linking to gender equality and empowerment.
- SDG 8: Decent Work and Economic Growth – The focus on fair wages, labor rights, and improving working conditions for service industry workers aligns with promoting sustained, inclusive economic growth and decent work for all.
- SDG 10: Reduced Inequalities – Addressing wage disparities and ensuring fair compensation for marginalized groups supports reducing inequalities within society.
2. Specific Targets Under Those SDGs Identified
- SDG 1 – Target 1.2: By 2030, reduce at least by half the proportion of men, women and children living in poverty in all its dimensions according to national definitions. The wage increase aims to lift low-income workers above poverty thresholds.
- SDG 5 – Target 5.5: Ensure women’s full and effective participation and equal opportunities for leadership at all levels of decision-making in political, economic and public life. The article’s emphasis on women workers receiving fair wages relates to economic empowerment.
- SDG 8 – Target 8.5: By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value. The ordinance’s goal to phase out subminimum wages for tipped workers aligns directly with this target.
- SDG 10 – Target 10.2: By 2030, empower and promote the social, economic and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, religion or economic or other status. The focus on immigrants, women, and people of color supports this target.
3. Indicators Mentioned or Implied to Measure Progress
- Indicator for SDG 1.2: Proportion of population living below the national poverty line, by sex and age. The article implies measuring the impact of wage increases on poverty reduction among service workers.
- Indicator for SDG 5.5: Proportion of women in managerial positions or receiving equal pay. While not explicitly mentioned, the focus on women workers’ wages suggests monitoring wage equality.
- Indicator for SDG 8.5.1: Employment rate by sex, age and persons with disabilities. The article discusses employment conditions and wage levels for tipped workers, implying tracking employment quality and wage levels.
- Indicator for SDG 10.2.1: Proportion of people living below 50% of median income, by age, sex and persons with disabilities. The wage increase aims to reduce income inequality, which can be measured by this indicator.
- Additional implied indicator: Minimum wage levels for tipped vs. non-tipped workers and compliance rates by employers. The article mentions wage levels and employer compensation obligations, suggesting monitoring wage compliance as a progress metric.
4. Table: SDGs, Targets and Indicators
| SDGs | Targets | Indicators |
|---|---|---|
| SDG 1: No Poverty | Target 1.2: Reduce proportion of population living in poverty | Proportion of population below national poverty line, by sex and age |
| SDG 5: Gender Equality | Target 5.5: Ensure women’s full participation and equal economic opportunities | Proportion of women in managerial positions; wage equality metrics |
| SDG 8: Decent Work and Economic Growth | Target 8.5: Achieve full and productive employment and decent work, equal pay | Employment rate by sex and age; minimum wage compliance rates |
| SDG 10: Reduced Inequalities | Target 10.2: Promote social, economic and political inclusion of all | Proportion of people below 50% median income by sex and age |
Source: cbsnews.com
