Minimum wage in Illinois would help economic recovery, report says

Organizers and economists in Chicago are arguing for a grassroots stimulus plan that would increase consumer spending and close the wage gap--by raising wages.

The Economic Policy Institute argues in a new report that gradually increasing the minimum wage in the next four years from the current $8.25 an hour to $10.65 by 2015 would end up raising the wages of more than 1.1 million workers in Illinois. That, the Washington D.C.-based nonprofit argues, would both help individual workers and give the state's overall economy a boost.

“Increasing the minimum wage would provide a much-needed raise to many Illinois workers and would generate economic activity and new jobs to a sluggish economy,” said Mary Gable who co-authored the report. “In fact, it is one of the few budget-neutral strategies available to state governments that would actually provide a job boost in the coming years.”

Exactly who are these low-wage workers? In Illinois, most minimum wage workers are at least 20 years old, the Economic Policy Institute reports, and have family incomes of less than $45,000. More than 25 percent are supporting at least one child.

People receiving minimum wage are also a diverse group--women comprising "47.4 percent of the workforce, but 55.9 percent of affected workers, and racial and ethnic minorities, who comprise 33.1 percent of the total workforce but 41.3 percent of affected workers,” the nonprofit reports.

The report came out on the one-year anniversary of the introduction of state Senate Bill 1565, which is currently stuck in the Senate's Executive Committee.

A coalition of minimum-wage activists, dubbed Raise Illinois, has been taking trips to Springfield in the past year to lobby for the passage of the bill. Today, more than 68 faith leaders and fellow members of Raise Illinois headed to Springfield to generate additional support.

“We believe that God calls us to share a vision of economic equality. This vision includes a wage rate that acknowledges the dignity of the workers … We recognize that some might say, ‘Now is not the time. This will stifle economic growth for the Illinois. This will increase our unemployment rate,’” said the group’s petition, with the signatures of more than 200 faith leaders.

“Indeed, these are troubled economic times, making this precisely the right time to raise the minimum wage. Low-income families will spend that additional income on basic necessities in their local communities, thereby stimulating the economy, creating more jobs, and assisting in the overall economic recovery.”

The debate around whether raising the minimum wage helps or hurts economic growth has long played out, but the stories of people living on minimum wage often fall to the wayside.

In a section called My Life on Minimum Wage, Raise Illinois chronicles the stories of minimum wage workers across Illinois to help remind people of how much a $2.45 an hour increase would help real families.

Jophanie W., in Alton, Ill., works in a warehouse and makes $8.25 an hour.

“I have a two year old son, and it is a struggle to raise a child, work full-time and go to school. Even though I work full-time, I have to use government programs like food stamps and a medical card to get by. This assistance helps, but it is still really difficult for me to pay my rent and bills on a minimum wage salary,” says Jophanie. “My son and I have to live with two other adults in a two bedroom apartment because we can’t afford to live on our own. If there was a raise in the minimum wage, my son and I would have a chance at a better future.

© Community Renewal Society 2012

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  • This is an argument that has long played out, agreed.

    The higher the minimum wage the higher the unemployment rate of unskilled and part time workers.

    If this is a successful strategy, why not raise the minimum wage to $25 pre hour? Or $50? Think of the additional money in wages? Trouble is, wages and other costs to businesses do not play out in a vacuum. Just because Uncle Sam comes along and says it should be so, dose not make it possible to achieve.

    Higher minimum wages lead to more automation, which our president does not like (as in the form of ATM's or automated travel bookings, but not as in windmills and non-marketable green start-ups and trains that go slower than planes). Why install a kid when a vending machine is much more less expensive?

    It is insulting to think that the government can assign a value to a person's labor to the low end. It also causes a business to pay that much and no more.

    Very faulty thinking here, but nice utopian dreams.

  • Absolutely correct. As a business owner in Illinois, my business has held payroll thru the increases in minimum wages by using fewer employees to get the job done. Paying 2 very good employees $15.00/hr each is more cost effective than 4 fair to good employees $8.25/hr

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