By CARL GREEN
It is said that Henry Ford raised his workers’ wages to $5 a day in part so they could afford to buy the very cars they were making.
The same principle still applies. If workers make a little more money than it takes to survive, they will surely spend it, and the whole economy will get a boost.
Illinois is moving toward raising its minimum wage in the general direction of $15 an hour, although probably not all at once and possibly on different schedules in parts of the state.
With Democrats in full control of the Legislature and the governor’s office, it is more a matter of when and how than whether the minimum wage will be increased. Possible plans were being discussed recently in the Senate Labor Committee, and Governor J.B. Pritzker says he wants a bill passed before his Feb. 20 budget address.
“Working men and women deserve to have a governor and a Department of Labor that will enforce laws protecting workers’ wages and workers’ rights,” Pritzker said in his inaugural speech. “And they deserve a $15 minimum wage. It’s good for the working families of Illinois and good for our economy.”
STATE MINIMUM WAGE IS CURRENTLY $8.25
Currently, the state minimum wage is $8.25 an hour, where it has been stuck since 2010, lower than over half of all states. Most participants in the debate were talking about a new top rate of $15, even business interests who were also seeking a long, slow phase-in for the increase and regional differences.
Senator Kimberly Lightford (D-Maywood), an assistant majority leader, was taking the lead, saying she would introduce a bill. She has filed four previous bills, and the last one passed the Legislature in 2017 but could not overcome former Governor Bruce Rauner’s veto.
That bill would have raised the wage to $9 on Jan. 1, 2018, to $10 on this past Jan. 1, to $11.25 on Jan. 1, 2020, to $13 on Jan. 1, 2021, and $15 on Jan. 1, 2022. It would apply to workers 18 and older, with lower rates topping out at $12 for those under 18 unless they work 650 or more hours in a year, when they would get the full rate. To ease the new costs, it also included a tax credit for employers of 50 or fewer employees.
Lightford’s bill passed the House 61-53 on May 30, 2017 and the Senate 30-23 the next day – majorities that were substantial but not enough to override the veto.
A GRADUAL INCREASE
In recent weeks, the break-in period was a major topic. Lightford said it would take until 2025 for the minimum wage to reach $15. Among business groups, the Illinois Restaurant Association proposed a seven-year rollout.
Service Employees International staffer Greg Kelly urged a quicker transition, citing the effect on the economy it will have. “Folks who make less than $15 per hour cover the gamut of workers in this state, and raising their wage would have a tremendous impact on millions of workers,” he said.
A regional approach was suggested by Mark Grant, Illinois director for the National Foundation of Independent Business, who described similar plans in New York and Oregon. In New York, the minimum wage is higher in New York City, and those with 10 or more employees pay more. In Oregon, the rate is higher in the Portland area. The Illinois Retail Merchants Association and Illinois Chamber of Commerce supported this idea.
“We believe the market should determine wages,” said Todd Maisch, president of the Chamber. “For example, $15 an hour in the Chicago market may make sense, while $15 an hour in Cairo, Illinois, does not.”
Illinois is moving in this direction anyway because Chicago has approved its own $13 minimum wage, to go into effect this year. Legislators were doubtful that a tiered minimum wage would meet state constitutional requirements.
Rob Karr, president of the Retail Merchants Association, said Chicago makes a regional approach worth considering. “The City of Chicago or any city core has a much different economic dynamic than perhaps the suburbs or even a downstate area,” he said. “So you might look at a different rate for the City of Chicago versus the six collar counties surrounding it, and yet another rate downstate.”
IMPACT ON JOBS
Grant also delivered the oft-heard argument against a higher minimum wage – that it will put people out of work. He predicted upwards of 100,000 jobs would disappear in Illinois. Democrats countered that this effect has not been substantiated with data.
Said Lightford: “The businesses that told me they would leave in 2003 were the same businesses that told me in 2006 that they would leave, who were the same businesses in 2010 who told me that they would leave. I have not been given any data at any point that told me that businesses shut down because of having a statewide minimum wage increase.”
Finally, representatives of community groups and social agencies – major employers of minimum-wage workers – said they can’t handle an increase without more financial support from the state, potentially another issue for Pritzker and the Legislature to consider.
“Providers want to pay their workforce better, they just need the means to do so,” said Chris Boyster of the Illinois Collaboration on Youth. The Health Care Council of Illinois and the Illinois Association of Park Districts joined in that opinion.
The legislation will also have to address tipped workers, who now have their own minimum wage of $4.95 – 60 percent of the full minimum – on the assumption that tips will make up the difference.
Another sign that a new governor is in town was the announcement that state employees will be placed at their correct pay scale levels beginning April 1 after a four-year freeze imposed by Rauner on the “step increases” that reward years of longevity.
The measure has been long sought by AFSCME Council 31, which represents state employees throughout the state.
“AFSCME stopped Bruce Rauner’s illegal step freeze in the courts and voters rejected him at the ballot box,” said its executive director, Roberta Lynch. “Now Illinois can begin cleaning up the mess Rauner left behind, and for more than 20,000 state workers, that means ensuring everyone is placed on their proper step and paid what they are owed.”
(Information from Capital News Illinois, the Associated Press, NPR-Illinois and Capital Fax.)