Chicago Restaurant Industry Lost 2,100 Jobs in 2025

Chicago Restaurant Industry Lost 2,100 Jobs in 2025  

Declines in industry employment come as efforts to protect restaurant workers and operators are blocked


CHICAGO – New data released by the U.S. Bureau of Labor Statistics shows that Chicago’s full-service restaurants lost another 2,100 jobs in the past 12 months, underscoring the ongoing challenges facing Chicago’s restaurant industry.

 

As of January 2026, Chicago’s full-service restaurant industry remains nearly 10,000 jobs below pre-pandemic levels, reflecting a troubling trend of stalled growth and renewed job losses. This resulted in more than $405 million in lost income for restaurant workers. After a brief period of recovery in 2023, job growth slowed dramatically in July 2024 when the phaseout of the tip credit began and has since continued on a downward trend. In the first half of 2025 alone, 496 Chicago restaurants closed.

 

The new report comes as Chicago’s restaurant industry faces increased uncertainty following Mayor Brandon Johnson’s veto of an ordinance that would have paused the phaseout of the city’s tip credit. The ordinance, which passed 30-18, would have frozen the city’s tip credit at 24 percent of Chicago’s minimum wage and provided needed stability for restaurant workers and operators facing rising costs and economic uncertainty.

 

“This data is not surprising. Chicago’s restaurant industry is struggling. Tipped workers and restaurant operators have been sounding the alarm that phasing out the tip credit is costing jobs and causing lasting damage to our city’s independent restaurants. We need to freeze the tip credit to give these businesses and the workers they employ a fighting chance,” said Sam Toia, President and CEO, Illinois Restaurant Association.

 

Chicago’s restaurant industry continues to face mounting economic pressure, with operators citing rising costs across food, rent, utilities, insurance, and labor. Industry leaders have long warned that rapid increases in labor costs are forcing difficult decisions, including reducing hours, scaling back hiring, or cutting jobs altogether, which is reflected in the recent employment data.

 

Restaurant operators are expecting to have to make even more dramatic changes to their staffing if the phaseout of the tip credit continues. In a March 2026 survey, an overwhelming majority of restaurant operators reported that they would be forced to cut employee hours, reduce staffing levels, and postpone plans for new hiring if the phaseout of the tip credit were to continue. The next increase is scheduled to take effect July 1, 2026.

 

Claims that tipped workers earn below minimum wage are simply misinformation. By law, every worker in Chicago earns at least the minimum wage, and many earn well above it with tips. The tip credit works because it supports higher earning potential for workers while helping restaurants manage already thin margins.

 

More information on this data can be found here at: https://files.constantcontact.com/5500f869001/a6e60f46-331e-4bd8-9f4b-d2452f373286.pdf

 

Latest Stories

Latest Podcast

The National Block Club University-Syron Smith