These Chicago Chefs Support Raising Prices If the Minimum Wage Increases

Over the last week, there’s been increased chatter within Chicago’s restaurant industry about how an increased minimum wage would affect business. Congressional Democrats have introduced legislation that would raise the federal hourly minimum wage to $15 — more than double the current limit — and eliminate the lower tipped minimum wage that many restaurant and bar workers earn in Illinois and other states by 2027.

For instance, Ursula Siker of modern Jewish deli Jeff & Judes in Ukrainian Village stirred the pot with an Instagram post attempting to explain why it’s disheartening to hear complaints from patrons about costs. Siker writes that Jeff & Judes’ 10 employees are paid $15 to $17 an hour and they make nearly everything on the menu on site, from curing and smoking the pastrami and corned beef to simmering stock overnight to baking naturally leavened bread.

“We have been told that our sandwiches are too expensive as a matter of principle rather than quality. Let me be frank; to say this is to directly imply that you do not believe the people making your food deserve a stable life,” Siker writes.

Siker’s post garnered more than 2,300 reactions on Instagram and a flood of comments from customers and other independent restaurant owners, many of whom wrote that they appreciated her forthright tone. She has not responded to a request for further comment.

The battle to raise hourly salaries for tipped workers has long raged in the city, led in large part by Fight for $15, a coalition of fast-food workers who support a higher minimum wage and improved employee benefits. Chicago alderman eventually compromised in November 2019 and agreed to increase the “sub-minimum” hourly wage by $2 — from $6.40 to $8.40 per hour — by 2021. The city council also raised Chicago’s $13 per hour minimum wage to $14 per hour in July 2020 and to $15 in July 2021.

Full-service restaurants would see a more dramatic increase in costs than counter-service spots or other types of establishments, as their labor force is generally larger. Chicago’s hotly-debated tip credit — when restaurant owners use servers’ tips to make up the difference between base pay and the standard minimum wage, thus saving money — remains in place.

A higher federal minimum wage is a controversial subject among restaurant owners, many of whom point to marked increases in prices for customers as a consequence of the change fearing sticker shock will drive diners to lower-priced competitors who don’t spend as much on labor. The bill, called the Raise the Wage Act, faces Republican opposition, but could ultimately prevail through a process called budget reconciliation, according to Roll Call.

Part of the problem for independent owners is a gap in understanding between diners and restaurants about what goes into sourcing and producing each item that arrives on their plate. For chef Brian Bruns (Spiaggia, Tru), co-owner of Alpine-inspired spot Flat and Point in Logan Square, burgers illustrate the issue. Flat and Point’s, made with beef from Slagel Farm, should cost $22, Bruns says, but it’s listed at $18, “because people know they can get a burger for 99 cents at McDonald’s.” Bo Fowler, chef and owner of Owen & Engine in Logan Square, shares Bruns’ philosophy when it comes to her famed burger, made with a special blend of short rib, chuck, and brisket with a British-style potato bap. She’s even poked fun at fast food chains like Burger King with a black bun burger reminiscent of the chain’s infamous “Kuro Burger.”

Communication with customers is also a problem, as diners often aren’t aware of operational costs and the complexities sourcing ingredients. Produce grown near Chicago, for example, is more expensive because there’s less land to grow on in the area, according to Bruns. That’s a component that people outside the industry may not consider.

In Bruns’ view, the restaurant industry’s habit of hiding “how the sausage is made” from diners contributes to the information gap. The pandemic and possible federal wage increase present a chance to alter that approach.

“The silver lining of COVID is that it’s going to empower restaurants to be more transparent and lay a foundation of how to rebuild the expectations of customers,” he says.

Palita Sriratana, who previously ran Thai restaurant Pink Salt out of the now-shuttered Fulton Galley food hall in Fulton Market, supports the increase, but says: “it’s going to hit a lot of restaurant owners very hard.”

“It’s going to make their payroll so, so heavy, and they’re going to have to put it on the menu,” she says. “But the customer has to understand — they have a part in paying the people who make their food a living wage.”

Sriratana has also had to deal with racist stereotypes surrounding international food. She attributes the reaction in part to her Thai-American identity as a BIPOC (Black, Indigenous, and people of color) chef making food from her own ethnic background — a phenomenon that Korean-American celebrity chef David Chang has called “some type of ethnic price ceiling.” It’s among the reasons she’s founded Hi Palita, a recipe blog that shows diners how much labor goes into Thai food.

That’s an issue Siker has also faced, as Eastern European-style Jewish delis are very costly to operate — a fiscal reality has felled innumerable delis in Chicago and across the country. Jeff & Judes has also encountered an upward battle among some area residents who have discussed their opinions of the deli’s prices at length in neighborhood Facebook groups.

Complaints also increased after Sriratana added an optional four-percent charge to fund healthcare coverage for her employee, inspired by Honey Butter Fried Chicken in Avondale. “You’d be surprised at how many people said ‘I don’t want to pay that,” she says. “We have to set the standard of having some empathy for industry workers... why wouldn’t you want health care for the people preparing your food?”

Honey Butter, which eliminated tipping several years ago, has received pushback in the local industry: when ownership explained its tipping policy and highlighted a connection between tipping and systemic racism on Instagram last June, some commenters asked for evidence of the “living wage” espoused in the posts. Others dismissed the move as performative, invoking their own alleged experiences as former employees making $13 an hour.

Andrew Barbera, co-owner of burger and pie spot Beard & Belly in Edgewater, says he came across Siker’s post when a friend shared it in her Instagram Stories and it struck a chord with him. He commented, expressing appreciation for her statement.

Though most of his customers don’t quibble over prices, the occasional diner turns up with a query about the cost of his pies, which are made by hand from start to finish.

Barbera says he’s seen a lot more honesty about the industry’s struggles during the pandemic, especially on social media, which he attributes to frustration with a lack of support from officials as the virus has ravaged the industry.

“We’re all working with slightly different [business] models, but in end we’re all recognizing that the way our industry pays itself has been unfair for a long time,” he says. “Now seems like the right opportunity to say we’re going to change it.”