Youth and tipped worker wages going up, too
By CARL GREEN
Springfield, IL – Workers throughout Illinois cheered recently when Governor J.B. Pritzker signed the first increase in the state’s minimum wage since 2010.
The rate will increase gradually to $15 on Jan. 1, 2025, spreading the increase out over six years. Republicans said they wanted to debate and participate in the legislation, but in the end, they wouldn’t vote for any increases for workers, leaving it to the majority Democrats to pass the bill. Not a single Republican voted for the bill in the Senate on Feb. 7 or the House on Feb. 14.
After the signing, Chicago Federation of Labor President Bob Reiter was among those speaking for workers.
“Raising the minimum wage will help lift up hundreds of thousands of workers, giving families the middle-class lifestyle that all workers deserve,” he said.
“These are workers in the retail and fast food industries, those who work with mental health, health care, and youth services, among others. They contribute to the greater good, and now they will be compensated for their important contribution.
“All workers deserve to share in the prosperity that their work produces. This new bill will increase the purchasing power of workers, which in turn will create jobs and give our economy a much-needed boost.”
YEAR BY YEAR
Here’s how the increase will play out.
- 2020 – On Jan. 1, the first raise will be applied, of $1 an hour, followed by a 75-cent increase on July 1 for a total of $10 an hour.
- 2021 – Another dollar on Jan. 1, making the new rate $11.
- 2022 – A dollar on Jan. 1, pushing the rate to $12.
- 2023 – The next dollar on Jan. 1, a rate of $13.
- 2024 – A dollar on Jan. 1, a rate of $14.
- 2025 – The last dollar on Jan. 1 for a rate of $15
Illinois has a three-tier minimum wage, with one rate for workers 18 years of age and older and a lower rate for workers under 18.
Tipped workers must be paid the state’s minimum wage, but employers can take up to a 40 percent credit for tips out of the employee’s wages.
For all the talk about raising the minimum wage, young workers and tipped workers may have been wondering whether there was anything under the tree for them.
Under the new law, the minimum for tipped workers is going up to $9 by 2025, and the minimum for workers under 18 is going up to $13.
For tipped workers, here is the progression.
Jan. 1, 2020 – On this date, the minimum wage for tipped workers will rise from $4.95 to $5.55, followed by a 45-cent raise on July 1, 2020 to a total $1.05 increase. The rate will then increase yearly as follows:
- Jan. 1, 2021 – $6.60.
- Jan. 1, 2022 – $7.20.
- Jan. 1, 2023 – $7.80.
- Jan. 1, 2024 – $8.40.
- Jan. 1, 2025 – $9.
In total, tipped workers will receive a 55 percent increase from today to 2025, the same as the increase in the regular minimum wage.
WORKERS UNDER 18
Workers under 18 will see an increase of about 60 percent through 2025, as follows:
- Jan. 1, 2020 – The minimum wage for younger workers will rise from $7.75 to $8 an hour.
- Jan. 1, 2021 – $8.50.
- Jan. 1, 2022 – $9.25.
- Jan. 1, 2023 – $10.50.
- Jan. 1, 2024 – $12.
- Jan. 1, 2025 – $13.
FIRST INCREASE IN A DECADE
Opponents of raising the minimum wage have warned the increase may be too much all at once – too close to doubling the current rate.
But since the minimum wage has not been increased in Illinois for the past 10 years. Calculating the six-year phase-in with the 10 years workers went without a raise’s 16 years.
Spread out over 16 years, the increase from $8.25 per hour to $15 an hour would amount to 3.4 percent a year – or a good contract settlement’s worth.
THE PATH TO THE INCREASE
Opponents of the wage increases argued that the Democratic majority Legislature and Pritzker should have provided more time for negotiating sessions and consideration of compromises, such as the regional, tiered system presented by business interests.
In a report on the increase, the Illinois AFL-CIO notes, plenty of negotiating went into the bill. Three separate meetings were held in January and February for both parties to discuss the bill, and much of what the bill includes was taken from last year’s minimum wage bill (SB81), which was passed but vetoed by former Governor Bruce Rauner.
In signing the bill, Pritzker noted that Chicago had already decided to raise its own minimum wage to $13 in July, saying the raise is needed statewide.
“The right to a fair wage does not end at Chicago’s border,” Pritzker said. “Workers in East St. Louis, Peoria and Springfield deserve the same fair pay.
“Today is a resounding victory for the 1.4 million Illinoisans who will get a hard-earned and well-deserved raise,” Pritzker added. “After nearly a decade of delay, I applaud the House and Senate for passing a living wage with the fierce urgency this moment requires.
“Phasing in the minimum wage over the next six years will put $6,300 a year into the pockets of nearly a quarter of our state’s workforce and billions of dollars into local economies in every corner of our state.
“Whether you’re a home healthcare provider in McLeansboro or a janitor in Rockford, hardworking men and women across Illinois deserve a raise and will get one.”