Retailers Disappointed as Lawmakers Pass Job-Killing Minimum Wage Hike

Catie Sheehan, 217-220-1717

Rob Karr testifying before Senate Executive Committee against the minimum wage.
Rob Karr, President & CEO, testifying before the Senate Executive Committee against the minimum wage.

Retailers Disappointed as Lawmakers Pass Job-Killing Minimum Wage Hike

Senate passes bill that will raise Illinois’ minimum wage to $11

SPRINGFIELD—February 5, 2015— Despite Illinois having a significantly higher minimum wage than all of its neighboring states, SB 11, introduced by Senator Kimberly Lightford (D-Westchester), passed the Illinois Senate with a vote of 35-18, with one member voting present. The legislation will increase Illinois’ minimum wage to $11.00 per hour. With a minimum wage $1.00 higher than the federal minimum wage and $0.60-$1.00 higher than all neighboring states, Illinois businesses will be forced to reconsider staying in the state.

“The goal of the proponents is laudable, but we know that raising incomes begins with sound public policy decisions that are focused on creating jobs and encouraging employers to stay, expand and locate in Illinois,” said Rob Karr, president/CEO, Illinois Retail Merchants Association. “If we raise the minimum wage, increasing employers largest cost line-item by 25 percent, employers are going to be forced to make cuts, which will start with jobs. No employer’s sales are increasing by 25 percent, particularly in the retail sector, so they have no other choice. This does nothing to change Illinois’ economic reputation, and it further economically disenfranchises Illinois citizens – particularly those who are low-skilled and inexperienced.”

SB11 seeks to increase the minimum wage from $8.25 to $9.00 beginning July 1, 2015, and increase it by $0.50 each July until July 1, 2019. Across the country, cities and states with an increased minimum wage are feeling the effects. In San Francisco, a long standing bookstore and advocate for the minimum wage increase when San Francisco adopted it several years ago, is closing after realizing the increased minimum wage made continuing operations impossible. During a time when the economic recovery in Illinois is slow, the state simply cannot afford to run businesses across the border or force them out of business altogether.

Facts about the minimum wage increase:

  • Illinois’ minimum wage is already highest in the Midwest. The Illinois minimum wage is currently $0.60 – $1.00 per hour higher than all of our neighboring states. A minimum wage increase will only put Illinois in an even higher economic disadvantage.
  • Raising the minimum wage will continue to keep people, especially teens, out of jobs. The number of teens with a job in Illinois has fallen consistently over the last 10 years leaving only about a quarter employed now. Increasing the minimum wage will only keep teens further out of jobs.
  • Minimum wage salaries are a floor, not a ceiling. The National Restaurant Association notes, “9 out of 10 salaried restaurant workers, including owners and managers, started as hourly workers.”
  • Employers are already bracing for the uncertain effects of federal health care implementation in Illinois.  To comply with the Patient Protection and Affordable Care Act, analysts estimate approximately $3,000 in extra costs per employee. Adding a minimum wage increase on top of the extra healthcare costs will kill Illinois employers.

“The fact of the matter is, increasing the minimum wage to $11.00 per hour is a job-killing proposal that will drive businesses out of the state taking much needed jobs with them,” said Karr. “We need to work together to pass legislation that seeks to strengthen our economy and keep jobs in our state, especially for those who need them the most.”

About The Illinois Retail Merchants Association (IRMA)

One of the largest state retail organizations in the United States, IRMA serves as the voice of retailing and the business community in state government. Founded in 1957,IRMA represents more than 23,000 stores of all sizes and merchandise lines. From the nation’s largest retailers to independent businesses in every corner of the state, merchants count on IRMA to fight for the best possible environment in which to do business in Illinois.