|By Greg Bishop | Illinois News Network|
|Legislation to incrementally increase the state’s minimum wage to $15 an hour by 2025 is on its way to Gov. J.B. Pritzker’s desk. Despite objections from all Republicans and many in the business community, Pritzker is expected to sign it.|
In additional to increasing the minimum wage, the measure is expected to increase taxpayer costs by hundreds of millions, if not a billion dollars in the coming years.
The Senate last week passed Senate Bill 1 on a party line vote. Pritzker said he’d sign the bill and urged the House to also pass it with no amendments. The House passed SB1 Thursday without amendments, 69 to 47 along mostly partisan lines.
House sponsor, state Rep. Will Guzzardi, D-Chicago, said there had been ample negotiations leading to a compromise bill, pointing to tax credits for small businesses and a sub-minimum wage for seasonal employees under 18 years old to $13 an hour by 2025.
“It will provide substantive economic relief to 1.4 million Illinoisans,” Guzzardi said, pointing to a study about Chicago’s minimum wage increase being positive.
Guzzardi acknowledged the increased taxpayer cost of the bill in the coming fiscal year, when the increase will jump from $8.25 to $9.25 on Jan. 1, 2020.
“In the coming fiscal year, there will be a roughly an additional $60 million in new appropriations that’ll be required,” Guzzardi said.
Pritzker has said he will work in the added cost into his budget address.
But that additional cost will only be for the last six months of the 2020 fiscal year. State Rep. Tom Demmer, R-Dixon, said it’s expected to cost taxpayers hundreds of millions more, if not a billion dollars more, by the time $15 wage is implemented by 2025.
State Rep. Mark Batinick, R-Plainfield, said the answer to getting Illinois on the right fiscal path isn’t to increase government costs on taxpayers, but to make the state more business friendly.
“It’s about work comp costs, it’s about the regulatory environment, it’s about the political environment,” Batinick said. “Those are the things you need to do to bring good jobs and increase wages in the city and downstate.”
Batinick said the study Guzzardi uses to back up his claims of positive impact are based off two years worth of data that ended in 2016 and doesn’t include a nearly doubling in the minimum wage.
“You’re extrapolating on something that raised the wage to $10.50 and then extrapolating that into a downstate city like Oakland, Illinois, that everything is going to be fine if they go from $8.25 to $15,” Batinick said. “That’s not evidence.”
Batinick said there have been claims the higher wage will help grow Illinois and help women, minorities, and underserved communities, but that there’s no long term studies to show that.
“What you’re doing down state is forcing a quick 82 percent increase in the minimum wage potentially during a recession,” Batinick said. “Have you ever looked at the impacts of an 82 percent increase in rural communities? Has that even happened before?”
As to regionalization, where business groups and Republicans were pushing for a different minimum wage for Chicago than the rest of the state, Guzzardi said regardless of where in Illinois, $8.25 an hour is a “poverty wage” and refused to amend the bill.
Tyree Johnson carpooled to Springfield from Chicago Wednesday to push for the bill. He said after working for more than 27 years at a fast food restaurant, he’s still making minimum wage and in Chicago that’s already $12 an hour.
“But I’m still not satisfied with what I make. I’m way behind. I need $15,” Johnson said. “Not $13, not $12, not $11. I need $15.”
Karen Conn owns several businesses in central Illinois and told a House committee Wednesday the increase will be just one added cost on top of others that she’s worried about not being able to afford.
“But it will also be with my product vendors, my insurance companies, my taxes, my utilities, and my insurance rates will continue in the coming years,” Conn said.
Conn said with a $15 minimum wage, she may have no choice but to eliminate entry level positions altogether.
The Central Illinois Regional Chamber Legislative Effort surveyed 550 businesses about the minimum wage hike. Half said they’d lay workers off. Nearly two-thirds said they’d slow down the hiring of new employees. A quarter said they’d consider automation.
Various state representatives and senators also have said they’ve heard from local governments like park districts, community colleges, public universities and K-12 school districts that will also be impacted by the increased costs.
They say the difference between businesses and taxing bodies is business will either shut down, move out of state, limit jobs offerings, automate or increase prices on consumers while governments like school districts will either decrease program offerings or raise property taxes.
Opponents of the measure said it’s a political bill because of the speed it passed through both chambers as a way to give the freshman governor and Democratic supermajorities a win before Pritzker delivers his budget address next week.