Higher minimum wage hikes pay for workers

The forecast for Illinois workers is strong, as study finds states that hiked their minimum wage saw higher pay overall

A new study finds a higher minimum wage hikes pay across the board for low-wage workers, most of whom are women. (Shutterstock)

By Ted Cox

The forecast is strong for Illinois low-wage workers.

A new study released this month by the Economic Policy Institute found that states that hiked their minimum wage saw pay levels rise for all low-wage workers. Illinois, of course, just moved to hike its minimum wage this year in the first major policy initiative under new Gov. J.B. Pritzker.

An interactive map that complements the EPI study projects that — outside of Chicago and its collar counties in the northeast corner of the state — more than 35 percent of all Illinois workers will see their pay increase with a higher minimum wage, with only U.S. Rep. Darin LaHood’s 18th Congressional District seeing less than a third enjoying a pay hike, and even that area forecast at 31.1 percent of workers benefitting.

That echoes a study released earlier this year by the Illinois Economic Policy Institute which found that a higher state minimum wage would have the strongest impact outside of Chicago, which had already moved to increase its minimum wage to $13 an hour in a process set to conclude later this year. ILEPI found in a separate study last year that fears over Chicago’s minimum wage costing jobs were unfounded, with “little to no impact on employment or the number of private business establishments,” while encouraging salaries to rise overall.

The Illinois minimum wage stands at $8.25 an hour, a dollar more than the U.S. minimum, but rises to $9.25 next year, $10 the following July, and then in annual step increases to $15 an hour in 2025.

The data behind the EPI study were considerable, as from 2013 through 2018 most of the country — 26 states and the District of Columbia — hiked their minimum wages in some form, either through legislation or mandated cost-of-living increases. The study determined that “the association between states with at least one minimum-wage change and growth in wages for low-wage workers is quite strong.”

The study found that, for workers in the bottom 10 percent of wage earners, pay rose 13 percent over that five-year period in states that hiked their minimum wage, but just 8 percent in states where the minimum wage was stagnant (like Illinois, which hasn’t raised its minimum wage in a decade).

The study also pointed out that this had an unusually strong impact on women in the workforce, given their “greater likelihood of being in low-wage jobs and thus greater likelihood of being helped by minimum-wage increases.” Again, in the bottom 10 percent of wage earners, women saw their pay rise 13 percent in states where the minimum wage went up, but just 6 percent in states where it was stagnant. Men in the bottom 10 percent, by contrast, saw pay rise 12 percent in states that adopted a higher minimum wage, up 8.6 percent in states that did not.

“Raising the federal minimum wage to $15 by 2024 would disproportionately raise pay for women,” the study concluded. “Although men make up a slightly larger share of the overall U.S. workforce, the majority of workers who would be affected by a raise to the federal minimum wage (57.9 percent) are women.” The same impact was forecast for African-American workers, “because they are overrepresented among low-wage workers and are less likely to live in states or localities that have passed a minimum wage that is higher than the current federal minimum. As a result, increasing the minimum wage to $15 by 2024 would mean a pay increase for 38.1 percent of all black workers.”