O’FALLON – A minimum wage increase to $15 is now a reality for Illinoisans, as Governor J.B. Pritzker signed it into law on Tuesday — meanwhile, local business owners fear for their livelihood.
Josh Martie, owner of Creative Landscapes in Fairview Heights, said the reality of the minimum wage increase could mean a potential shut down for his business.
“The reality of the $15 per hour increase would mean we would have to raise our labor pricing dramatically or shut down,” Martie said. “I believe our material costs would have to increase as well to compensate for the increase my suppliers would take on with the increase of their labor force.”
Martie said over the last couple of years, he has done research and planning for what he thought was the potential of a minimum wage increase. He said his business can try to adapt to the new law but the reality of the minimum wage increase “would affect everything.”
“Employees who now make $15 per hour are going to want a pay raise so they are not making minimum-wage,” he said.
Martie said about the tax credit offered to small businesses to compensate for the increase in labor costs: “I don’t think that will be enough”
“If the state would visit our workers’ compensation insurance costs maybe it would allow a small landscaping business take on this labor increase,” Martie said. “We already pay the highest workers’ compensation insurance in the country.”
“If minimum-wage goes up work compensation goes up. My payroll will double. It might work fine in the Chicago area but it won’t work for Southern Illinois. I don’t believe people realize how expensive things will get. We will no longer be able to compete with the box stores and the guy in a truck,” Martie continued.
Scott Federhofer, owner of Homeworx Pro in O’Fallon, said about the minimum wage increase: “It’s horrible for me.”
While Federhofer doesn’t employ minimum wage workers except for occasionally during busy months, his workers that are paid $20 to $25 an hour may feel “disgruntled” if their pay isn’t raised.
“Inevitably, what’s going to happen are prices are going to go up,” he said. “All of our goods and materials.”
Homeworx Pro, a veteran owned construction business, offers home repair, renovation and remodeling services. Federhofer also takes care of a property management company with more than 1,200 properties.
“I’m a growing business, I’ve been doing this myself on the side for 25 years and I quit my job over a year ago to start my own company – and here I am.”
Federhofer said the minimum wage “was never designed to be a living wage.”
“Let’s be honest, I’ve had minimum wage people working for me before – they don’t stay long,” he said. “They are moving on to bigger and better things and making more money somewhere else and that’s great.”
“If they want to stay with me, they are going to make X amount dollars until they develop the skills – then I can I give them more money and make them more useful,” he said. “Truly, when I hire minimum wage people, they have more of a negative impact on my business than they do a positive one,” Federhofer continued.