10 states increase their minimum wage, but not Illinois

10 states increase their minimum wage, but not Illinois

If you live in Colorado, Montana, Ohio, Oregon, Washington, Arizona, Florida, Missouri, Nevada or Vermont and work a minimum wage job, you'll get a little extra in your paycheck come 2012. Illinois workers won't be so lucky.

Those ten states will all increase their minimum wages, either through a direct hike or an inflation adjustment come next year. A similar effort was put forth in our state this year - SB 1565 -- which would have pushed Illinois' lowest wage, currently $8.25, up by 50 cents a year plus inflation. If it had passed, workers now would be making a minimum of $8.90 an hour, and next year, $9.50. Adjusted for inflation, the minimum wage would have reached approximately $10.65 by 2014, labor activists estimate.

Even though the bill didn't pass this year, the fight isn't over. A coalition of advocacy groups, Raise Illinois, is trying again to get that bill passed during the upcoming legislative session. Next week, a group of minimum wage workers are traveling to Springfield to talk to their legislators about what it's like to earn the minimum wage and how their lives would change if they earned more.

The bill would also continue to index the minimum wage with inflation, saving legislators from having to pass a bill every time they want to boost wages. That's what five of the 10 states that are upping their minimum wage next year already have in place.

I worked a few minimum wage jobs when I was interning in newsrooms in the city. I remember one of my employers commenting on how I would make $8.25 an hour, what she thought was outrageous, considering she remembered minimum wage being something like $3 an hour. It does seem like a huge difference if you're not considering inflation adjustment. According to Princeton economist Paul Krugman, the federal minimum wage of $7.25 an hour is lower than what it was in 1968, if you adjust for inflation.

Still, there are lot of arguments against raising the minimum wage, especially in times of economic peril. Aren't businesses struggling enough without having to pay their workers more? And the Employment Policies Institute says minimum wage hikes could end up hurting the most vulnerable communities, creating "unintended consequences that are particularly harmful to less-educated and minority groups.”

Other studies suggest that boosting the minimum wage doesn't hurt business and actually helps the economy. A 2010 study of minimum wage increases(pdf) in 500 countries showed that wage hikes didn't lead to job losses, according to the Review of Economics and Statistics. A 2011 study in the April issue of  Industrial Relations found that minimum wage increases didn't hurt the job market even when unemployment was high.

Raising the minimum wage could also help state government by raising more revenue. Jen Kern, director of the campaign to raise the minimum wage at the National Employment Labor Project, explained it to me this way: if the state pays some workers the minimum wage, then it's going to cost the state some to push up wages. But it also will likely bring in more money through minimum wage workers spending more with their earnings, possibly paying more income tax and those same workers not needing social service programs, which cost the state money.

"There is a cost to the taxpayers for keeping people poor," said Kern. "You either pay people through a paycheck so they can earn a decent living, or you end up paying in other ways."

With the state recently raising its corporate income tax to 7 percent, don't companies already have enough incentive to leave Illinois without us piling on wage hikes? I asked Adam Kader, labor organizer at Arise Chicago, a member of the Raise Illinois coalition. He reminded me that most minimum wage workers are employed by companies that aren't going anywhere - fast food restaurants, convenience stores, laundromats, car washes, etc. Raising the minimum wage won't make McDonalds give up selling BigMacs.

"A lot of those places are not in a position to move," said Kader. "Their customer base is here. All the fast food chains, which all start out at the minimum wage or maybe a dime more, they can't move to Indiana."

And Kader put forth another point. Not only were corporate income taxes raised, but so was the individual tax rate.

"The income tax for workers is also higher," said Kader. "Since now we're paying more as well, we should be earning more to compensate."

In the era of Occupy Wall Street et al., it'll be interesting to see whether bills like SB 1565 have more public and legislative support. Will the 99 percent support raising the wages for the bottom 20 percent? We'll have to wait and see.

Photo credit: Bart Everson

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  • Hey Megan, it isn't going to do any good to raise the minimum wage, when Illinois is driving private employers out of the state, especially if it is already above the federal. It still is "we have to give the CME group a tax break or they will move." I'm sure its employees will gladly take your $9.25 minimum wage compared to what they are making now. What is that going to do to tax receipts?

    Instead of asking Kader, why don't you ask some businessperson? Restaurants may not be moving anywhere, but a whole bunch have closed. The shuttered Denny's and I Hops in my area are paying nobody $8.25.

    Megan, apparently they didn't teach you economics in journalism school, as well as anything about verifying sources. Also you were apparently willing to intern for nothing, which is less than the minimum wage. Why don't you tell us how you let some media outlet do that to you?

  • Jack, I'm always confused about your eagerness to read our blog everyday, despite the fact that we make you so angry.

    Actually, despite the lack of fine dining in your area, the restaurant industry is doing quite well, and profits are expected to continue to increase. Also, restaurant workers don't make $8.25. Their minimum wage is $4.20 an hour.

    Also, I have spoken to business people on this topic, including one who said it's "Un-American to pay people a wage they can't live on." However, this is a blog post on the movement to raise the minimum wage, not a 3000-word investigation on the topic.

    In case you're interested, I didn't study journalism in school. I studied political science and history, where I learned about many movements, like the push for the 8-hour work day, the minimum wage and the outlawing of both slave and child labor. In all those examples, business people said if regulations went into effect, they would be sunk. Oddly, businesses are still alive and kicking. I'll also remind you to look again at all the research showing that raising the minimum wage doesn't hurt job growth in the seventh paragraph.

    I interned because I gained valuable experience doing it, and it was a path to getting a job. It was an extension of my education. I doubt many people feel the same about flipping burgers.

    I'm sorry you're concerned about my verifying sources. I do promise you that all the people in this article do, indeed, exist, and the data does as well. While I think you find particular satisfaction out of writing comments directed to me, please know that every blog post is edited and fact-checked by our staff, so you are, in fact, insulting all of us. Not that we particularly mind, but I thought you might like to know.

  • In reply to MeganCottrell:

    Thanks for explaining that you didn't learn either economics nor journalism in college. It shows.

    What I meant by verifying sources (and I might not have been clear about it) is that you, in this case, took what an ideologue (Kader) said, especially about tax policy, at face value, instead of looking at both sides.

    If what he says is the case:

    --Why does Illinois still have a 10% unemployment rate, not to mention that the underemployed and those discouraged out of the labor market are not reported?

    --Why, after increasing income taxes 67%, Illinois can't still pay off its backlog with all that additional money?

    --Why do I see boarded up restaurants and 2 for 1 coupons (which, in many cases, don't bring in anyone other that the coupon holders) if the business is doing so well? I suppose that Charlie Trotter already pays more than minimum wage.

    Finally, you resort to the bloggers' and comment board posters' last line of defense--why do you read this just to get angry? No, the real reason is not to argue with you, but to expose your fallacies, which are numerous in this blog, including the point I made a couple of months ago that Chicago Muckrakers is not to rake muck, but to put faith in whatever study suits you at the moment. And, in Kader's case, he did not have any empirical proof to support his wild assumptions. If he did, you sure didn't link to it.

    Maybe you are like MarkSAllen, whose only point is his 40 years of agitating and self promotion, including a picture with President Obama (possibly Photoshopped)--but the condition of his constituents has not improved or you of the next generation would not be around to complain. Maybe that's the result of looking at things through the prism of race and poverty, instead of experience.

  • Wow. Jack. I'm bummed that you're bringing the tone of this blog down in such a big way. Can you not find a smart, kind way to express your disagreements with Megan's work? Were you too busy in school learning about economics and journalism? So busy that you missed the bits where adults admonished you to suppress your inner-asshat?

    As I ponder the strange approach you've taken here, I guess what I'm really trying to say is thank you. Thank you for pouring what I'm sure is no small amount of your daily zeal into searing (if sometimes a little senseless) comments on this blog. Otherwise, perhaps you would use that same energy to do tangible work in the world, and I think I can safely speak for most of us here when I say that we definitely don't want that.

    I'd say you're acting childish, but I feel strongly that this would disrespect children.

    All the best as you begin what I'm sure will be an arduous journey in learning to converse in more productive ways,

    Liz

  • Also, do you know where I can get a prism of race and poverty? This sounds like a stunning Christmas gift.

  • In reply to Liz J S:

    Thank you for your brilliant psychological analysis. I'll be sure to take it to heart. Not.

    Also, I guess you were too lazy to look at the "About" page, which says in part...

    "Chicago Muckrakers is a blog produced by the award-winning staff of The Chicago Reporter, an investigative news organization that also publishes a website and bimonthly magazine examining the political, economic and social issues of metro Chicago with a focus on race and poverty."

    So, I used prism instead of focus. Too bad.

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