SB 68, introduced by Senator Kimberly Lightford (D-Westchester), seeks to increase Illinois’ minimum wage to $10.65 per hour. Illinois already has the highest minimum wage in the Midwest at $8.25 per hour. Another increase will force unemployment upward even further and result in consequences to our economy that outweigh the intended benefits. While some decry income inequality, we believe true income equality begins with the opportunity created by a job.
- Illinois’ minimum wage is already highest in the Midwest and is tied for sixth highest in the entire nation. The Illinois minimum wage is currently $.75 – $1.00 per hour higher than all of our neighboring states. If SB 68 is enacted, Illinois’ minimum wage will be $3.15 per hour higher than our neighboring states. These higher hourly wages are paid even though the cost of living in Illinois is lower than most other states in the country.
- Raising the minimum wage does not combat poverty. Over the last decade, the Illinois minimum wage has been increased over 50%, but poverty rates actually rose from 11% to over 15% during the same timeframe. Clearly, minimum wage is not an effective poverty fighting tool. If SB 68 is enacted, the Illinois minimum wage will soon stand at $10.65 per hour, which will force employers to make even further cuts hindering people from finding jobs. Doubling the minimum wage will not combat the state’s poverty issue.
- 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 ten years leaving only about a quarter employed now. According to the Chicago Urban League, urban areas fare even worse; less than one in ten African American teens in Chicago are employed. Chicago’s Hispanic and Caucasian teens also face difficulty finding work, but they are statistically more than twice as likely as the city’s African American teens to be receiving the experience of a paycheck. The result is a significant number of teens are not gaining the basic and valuable work experience to propel them up the economic ladder in the future. Increasing the minimum wage will keep young people out of jobs as employers will be forced to cut back.
- Illinois has been warned of the danger of falling back into recession. According to a 2013 Moody’s Analytics report and cited by the Illinois Commission on Government Forecasting and Accountability, “Illinois is one of just a handful nationally in danger of falling back into recession,” and that “Illinois has been among the Midwest’s weakest and is underperforming the nation in most economic gauges.”
- Minimum wage salaries are a floor, not a ceiling. The National Restaurant Association notes, “Nine out of ten salaried restaurant workers, including owners and managers, started as hourly workers.” Workers are not locked into minimum wage jobs, they have the ability to garner the necessary skills to advance and earn higher wages. A minimum wage is intended to be a starting wage.
- Research says jobs help combat violent crime. A recent University of Chicago study printed in the Chicago Sun-Times concluded that “youths in high-violence neighborhoods who were offered jobs and therapy through a 2012 city anti-violence initiative showed a 51 percent drop in arrests for violent crimes.” The study shows the significant positive impact jobs have on youth crime, but increasing the minimum wage will significantly decrease the amount of jobs available to youths across the state.
- 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. Given the enormous fiscal stress of the economic downturn, tepid recovery, and policy uncertainty on employee costs, businesses cannot bear an additional labor cost.
- Employers cannot bear the repercussions of a minimum wage hike, and jobs will be lost. While national unemployment has dropped to 6.7%, unemployment in Illinois continues to be problematic, now standing at 8.3%. The National Restaurant Associations says, “58 percent of restaurant operators increased menu prices and 41 percent reduced employee hours following the 2007 minimum wage increase.” Another minimum wage increase will only make hiring minimum wage workers increasingly selective.