Minimum-wage hike would thrive outside Chicago

Illinois Economic Policy Institute finds earnings would rise most in central Illinois, Rockford



By Ted Cox

A statewide hike in the minimum wage to $15 an hour would have the greatest impact on earnings outside Chicago, according to a new study released Tuesday.

In some ways, that’s not surprising, as Chicago has already moved to raise its minimum wage to $13 over a five-year span set to be completed this summer. But according to “The Regional Impacts of a $15 Minimum Wage in Illinois,” released Tuesday by the Illinois Economic Policy Institute, a $15 minimum wage would still raise annual earnings by $5,000 for low-income workers in the Chicago area, and would have an even greater impact on other metropolitan areas including central Illinois, Rockford, and the so-called Metro East area near St. Louis.

The study projects that a $15 minimum wage would hike annual earnings $8,000 in central Illinois around Springfield, and $7,000 in east-central Illinois including Champaign-Urbana and around Rockford. Wages would rise $6,000 in Metro East.

The study suggests: “These higher incomes … would boost consumer spending at local retail stores, restaurants, and small businesses — offsetting any initial drop in employment or hours.”

It cites how four states have already adopted a $15-an-hour minimum wage, including New Jersey just last week, while 19 states overall moved to increase their minimum wages in some way with the new year. Illinois residents already voted in a 2014 advisory referendum to support a hike in the minimum wage, with 83 of the state’s 102 counties voting in favor.

“Working-class families in Illinois are falling behind their peers in other states,” said study co-author and ILEPI Policy Director Frank Manzo IV. “A $15 minimum wage would boost earnings for more than 1.4 million adult workers across Illinois.

“There is broad public support in favor of raising the minimum wage in every region of Illinois,” he added. “A uniform $15 minimum wage would allow working-class families to maintain a decent standard of living and reduce poverty in every corner of the state.”

The minimum wage in Illinois has been set at $8.25 throughout the 2010s, and would most likely be hiked gradually over a set length of time. Gov. J.B. Pritzker has backed a $15 minimum wage, and state Rep. Will Guzzardi of Chicago and state Sen. Sen. Kimberly Lightford of Maywood are leading the effort to grant the new governor an early victory in the General Assembly. It passed a Senate committee Wednesday.

Not everyone is on board, however. Illinois Restaurant Association President Sam Toia has backed a statewide increase, but Rich Miller’s Capitol Fax reported on pockets of resistance this week. Illinois Retail Merchants Association President Rob Karr has pointed to how the cost of living varies across the state — especially in the Chicago area — and has proposed a $15 wage in Chicago, $13 in the collar counties, and $11 downstate.

Paul Rumler, president of the Quad Cities Chamber of Commerce, has raised the issue that border areas might face more risk of businesses moving out of state, and the lower impact the higher minimum wage would have in Metro East would seem to support that. Farmers have also raised concerns.

But the study projects that the higher minimum wage would raise earnings for 1.4 million Illinois workers by an average of more than $6,000 a year, lifting more than 200,000 out of poverty.