O’FALLON – A vote to raise the minimum wage to $15 per hour has moved to the Illinois House of Representatives after passing in the Senate on Thursday, Feb. 7, and the director of one of the city’s largest departments is worried about the consequences.
The current proposal would phase- in the increase over six years, starting with an increase from $8.25 to $9.25 an hour on Jan. 1, 2020 before increasing to $10 an hour on July 1, 2020 and $11 an hour on Jan. 1, 2021. After that, it would increase by $1 every year until it hits $15 in 2025.
The last minimum wage increase in Illinois took place in 2006, raising the minimum wage to $8.25 by 2010. Senator Kimberly Lightford has been working to increase it further since 2011.
The current Illinois minimum wage of $8.25 per hour amounts to $16,500 per year for full time employees. At $15 per hour, full time employees would make approximately $31,200 per year.
The minimum wage proposal passed in the Senate in a 39-18 vote and will now move to the House, where Democrats have a super majority.
Mary Jeanne Hutchison, O’Fallon Parks and Recreation Director, said the O’Fallon organization will be severely affected by the proposed $15 minimum wage.
As Parks and Recreation employs mostly teens and young adults, Hutchison said the wage increase would impact nearly the entire workforce, except for a small percent that are under 18 and work less than 650 hours per year.
“Most of our teens work more than 650 hours. I will estimate we have to raise prices 68 to 78 percent over the next six years,” she said. “That is without including the cost of equipment, overhead costs and other amenities.”
If the measure passes, Hutchison said that she would have to break everything down over the next year to prepare for the increase.
This fiscal year, ending April 30, 2019, Hutchison said it’s projected that she will use the equivalent of 31 full-time employees for seasonal labor, which equals 64,480 hours.
Some employees are paid more than minimum wage depending on their position and qualification. Seasonal Parks and Recreation employees include lifeguards, water safety instructors, crew leaders for park maintenance, camp leaders and more.
Hutchison said that most Parks and Recreation programs “recover all direct cost.”
“What that means is we build a menu of costs associated with each program. That is how we develop the price. This means the parents — the adult program users — will be choosing if they participate in as many programs or any,” she said.
“It will affect maintenance of our parks, and horticulture areas, it will affect our camp, pool, park maintenance, all the way down to the splash pad monitor. It will affect everything.”
Hutchison said that the Parks and Recreation Department receives utility tax and property tax to maintain the parks and facilities.
“New park development is funded by hotel and communication tax. A large amount of our funding comes from direct program fees or facility usage fees.”
Hutchison said under the minimum wage proposal, prices would have to increase in order to afford increased labor costs.
“We will cut some programs, we will raise prices and adjust levels of service unless another funding source is available,” she said.
Hutchison said sporting tournaments utilizing Parks and Recreation facilities bring in around $5 million in economic impact each year.
“I anticipate we will have to raise our field rental and tournament prices to cover the cost of field prep, trash pickup and concession clerks,” she said. “So this could reduce our tournaments if we price ourselves out of the midwest market.”
“This will impact every full-time staff person as well. All the full-time staff salaries will have to be adjusted as this process develops,” Hutchison said. “The compression of salaries becomes an issue when you have an entry level seasonal position making a few dollars less than a five to ten year experience employee with a degree plus a Master degree.”