Minimum wage at maximum speed?
Proposed legislation would increase Illinois’ minimum wage for the first time since 2008, to $15 an hour by 2025
Cristina Castro still vividly remembers the minimum wage job she held in high school that helped her family make ends meet.
A customer service associate at Factory Card Outlet, she was charged with inflating and assembling balloon bouquets.
“Mother’s Day and Valentine’s Day were awful,” she laughed, noting that on a number of holidays, “the place looked like it was ransacked.”
More than two decades later, Castro, a Democratic state senator from Elgin, is one of the lawmakers supporting new Gov. J.B. Pritzker’s push to increase Illinois’ minimum wage for the first time since 2008, to $15 an hour by 2025. That rate could place Illinois’ minimum wage among the highest in the nation, joining California, Massachusetts and New York on the path to $15. Like Illinois, New Jersey’s Democratic-led Legislature has also been considering an increase in recent days.
“Too many working families are struggling to get by,” Castro said, describing a district resident working two, eight-hour shifts a day to support her family. “No one who works full time should live in poverty.”
Pritzker, a Chicago Democrat, is hoping for swift approval of the plan—a phased-in increase that will begin next January—before his budget address later this month. The Senate on Thursday passed the measure by a 39 to 18 vote, along party lines. House Speaker Michael Madigan, a Democrat from Chicago, indicated on Friday he would support the bill.
According to a proposal outlined by the governor’s office, the state’s minimum wage would be first bumped to $9.25 from its current $8.25 next January. By 2021, it would stand at $11 and increase $1 each year until 2025. The proposed legislation provides for some tax credits for small businesses. It also allows tipped workers, such as baristas and waiters, and those younger than 18 to be paid a lower wage.
The move, however, is opposed by many Republicans and major business groups. The Illinois Retail Merchants Association and the Illinois Chamber of Commerce oppose the plan in its current form.
“We can in fact get to a neutral position and eventually to a supportive position depending what it looks like,” said Rob Karr of the Merchants Association. “But the proposal currently being talked about ignores a few things. It ignores that Illinois is economically diverse. It is entirely one thing to suggest that the city of Chicago can do a $15 minimum wage… versus the other parts of the states.”
State Sen. Jim Oberweis, a Republican from Sugar Grove, said the move is forcing his Oberweis Dairy chain to look at opening new stores in Missouri, Indiana and Wisconsin, instead of Illinois. “That’s really painful to me,” he said, noting he’s lived in the same house for four decades.
“Companies in the restaurant business are now doing more remote ordering, more ordering kiosks,” Oberweis said. “That’s only going to accelerate and cost jobs. ...This large of an increase, this fast, is going to hurt a lot of people.”
In late 2017, Gov. Bruce Rauner vetoed a similar measure passed by the Democratic-led legislature.
As the debate unfolds, the Center for Illinois Politics sought to put the increase into perspective, both within Illinois and nationally.
Cost of living varies by region
At an Illinois Senate committee hearing Wednesday, some lawmakers advocated for a regional rollout, where metropolitan areas would feature a higher minimum wage than those in more rural areas. Such a plan has been put into place in New York and Oregon, but state Sen. Kimberly Lightford, the Maywood Democrat sponsoring the minimum wage bill, argued that such an approach would “divide the state along economic lines.”
Rent Jungle, a site that compares rent trends, found the average cost of renting a two-bedroom apartment in Chicago was $2,251 in January 2019. In suburban Naperville, a two bedroom apartment averages $1,508, while in Springfield it’s $788. In Carbondale, that same sized apartment is $614.
Where other states stand
Illinois’ statewide minimum wage of $8.25 an hour (it’s $11 in Cook County and $12 in Chicago) is higher than many surrounding states but significantly lower than New York and California.
New York City has the highest current minimum wage at $15 per hour, or $13.50 an hour for employers of 10 or less. New York's statewide minimum wage is $11.10/hour.
Los Angeles is not far behind New York City, requiring employers of 26 or more to pay at least $14.25 an hour. Smaller employers in L.A. must pay at least $13.25 an hour. California's statewide minimum hourly wage is $12 for large employers (26 or more) and $11 for smaller employers.
Among Illinois' neighbors, Indiana, Iowa, Kentucky and Wisconsin share a statewide minimum wage of $7.25. Missouri is at $8.60 and Michigan has a minimum of $9.25, which is set to raise to $9.45 in March.
Employees who work for tips can legally be paid far below the standard minimum wage. In Illinois, the minimum for tipped workers is $4.95 an hour, or $5.10 in Cook County and $6.25 in Chicago. In the state of New York, the tipped minimum is $7.50, or $9.25 in New York City. Near Illinois, the lowest tipped minimum wage is $2.13 in Indiana and Kentucky, followed by $2.33 in Wisconsin, $3.52 in Michigan, $4.30 in Missouri and $4.35 in Iowa.
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Minimum wage puts full-time workers near poverty line
According to the United States Bureau of Labor Statistics, 1.8 million Americans earned at or below the federal minimum wage of $7.25 an hour in 2017. That includes 2.3 percent of hourly service workers in all industries and 13.5 percent of food preparation and service workers. Within Illinois, 2.5 percent of the state’s 3.15 million hourly workers make less than the federal minimum wage of $7.25, according to the Bureau.
A full time, 40 hour per week job at $8.25 an hour in Illinois translates into $330 per week and $17,160 per year before taxes. The national poverty line for a family consisting of two is $16,910 per year.
The legislation is Senate Bill 1.
Note: The Center for Illinois Politics is a nonprofit, nonpartisan organization dedicated to providing clear, fact-based information to encourage more Illinoisans to be active in politics. This article has been reviewed by a bipartisan panel of former lawmakers, political analysts and academics to ensure its nonpartisan nature.
Contact Kerry Lester at email@example.com
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